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Dáil Éireann - Volume 40 - 06 November, 1931

Financial Resolution. - Income Tax.

[1122] (1) That income tax shall be charged for the year beginning on the 6th day of April, 1931, at the rate of three shillings and sixpence in the pound instead of the rate of three shillings mentioned in sub-section (1) of Section 1 of the Finance Act, 1931 (No. 31 of 1931), and that sub-section (3) of that section shall (subject to such amendments of the law as may be made in pursuance of the subsequent paragraphs of this Resolution) apply in relation to the said income tax to be charged as aforesaid in like manner as it applied in relation to the income tax charged under that section.

(2) That in consequence of the said increase in the rate of the income tax for the year beginning on the 6th day of April, 1931, such amendments shall be made in the Income Tax Acts as may be necessary to give effect to such increase and, in particular, as may be necessary to validate deductions made in respect of the income tax for the said year, to provide for making good, in the case of income chargeable under Schedule C of the Income Tax Act, 1918, or under Rule 6 or Rule 7 of the Miscellaneous Rules applicable to Schedule D of that Act or in the case of payments falling under Rule 21 of the General Rules applicable to the Schedules of that Act, any deficiency in deductions made in respect of the said income tax where such deficiency arises by reason of the said increase in the rate of the said tax, to modify Section 211 of the Income Tax Act, 1918, to meet circumstances arising by reason of the said increase, and to apply that section with respect to royalties and other sums and dividends from which deductions may be made under Paragraph 2 of Rule 19 or under Rule 20 (as the case may be) of the said General Rules.

Mr. de Valera: The Minister for Finance has told us that we may expect, at the close of the financial [1123] year, a deficit from tax revenue of close upon a million pounds. He tells us now that there are two ways of dealing with a situation like that. One is by way of retrenchment and the other is by way of extra taxation. He tells us that we are to consider the second method, that of increased taxation. I think there is hardly a Deputy in the House who will not admit that he would be in a much more satisfied frame of mind in considering the question of increased taxation if he were satisfied that the Minister had done everything he could to deal with the situation by means of the second method; that is, by way of retrenchment. Those of us who have been listening carefully to the concluding part of his statement must feel that that statement has been anything but convincing. The Minister tells us of fixed charges and of the variety of difficulties that confront you when you try to retrench.

He charged the Opposition Parties in the House with having been unwilling to face retrenchment. In view of all the speeches that have been made from these benches, principally, I would say, as regards retrenchment of a particular character, it requires a good deal of audacity to stand up and say that we have not been pressing for retrenchment on practically every occasion on which estimates have been brought to the House, except in cases where there were certain essential social services that we thought ought not to be retrenched. We pointed to extravagance in every direction as regards official salaries. We have been pointing, until everybody has begun almost to smile at it, at the extravagance in this country of paying £10,000 a year by way of salary to a Governor-General whose functions are such that one of the members of the Minister's own Party called him a rubber stamp. We are paying an extra £17,000 toward the upkeep of his establishment.

We have pointed to the unnecessary size of the Seanad. When the Seanad was being considered here in connection with certain amendments of the Constitution we pointed out that, if a Seanad were necessary at all, a Seanad [1124] of about thirty-five members at most would be able to do the work. We pointed out that the membership of the Dáil could very well be reduced, and reduced without any great loss from the representative point of view. We have pointed out that there are a number of civil servants who are getting what is really extravagant remuneration in this country. We pointed to a number of salaries over £1,000 a year and we showed where retrenchment could be effected in this respect. I daresay what the Minister has in mind is that we are not prepared to retrench just as he was in regard to old age pensions; that is probably what he was referring to.

Mr. Blythe: No.

Mr. de Valera: We are not prepared to retrench on what we regard as essential social services. We believe that human beings have a right to live. They have a right to be able to get the means of living, and, when they are past the time when they can support themselves, we believe that something like a living pension should be given them. We have complained all along the line that the policy of the Ministry was one which was bound to result in circumstances like these, throwing an unfair burden on a certain section of the community. We have complained that the very fact that we have not work for those able to work, that we have not production from sources that are capable of production, was going ultimately to mean that certain sections of the community would break down under the load, just as they have broken down clearly here, and the remaining sections of the country would be compelled to carry the additional burden.

That is precisely what is happening in the present case. The productive power of a section of the community has broken down to such an extent that that section is no longer able to bear any portion of the common burden and that common burden has to be transferred to another section. Would it not be better to put these people into production? I am not going to go into the wider aspect of the failure of the Government to do the things that any Government in the [1125] present circumstances would have done. This is something that the Government should not have waited for this hour to see. It was quite evident. One of the most unsatisfactory things one can notice is that we are at every step merely following something that has happened across the water. Instead of looking at our own conditions here, trying to deal with them and taking foresight in regard to them, we are simply compelled to follow step by step something that has been done across the water to meet a totally different set of conditions. I am not going to say that there would not be a certain reflection of these conditions here in anything like the present circumstances. I am quite willing to admit that. But the point is that we ought to have sufficient freedom now to consider matters for ourselves, to deal with our own conditions and to provide for them without having every reaction on the other side reflected here in almost similar reactions.

The Minister said that other countries have departed from the gold standard. He tried to explain why it is good policy not to retain the gold standard when England has gone off it. He said that other countries that were on the gold standard, but were not tied to sterling at all, had gone off it. Those countries were free to go on or off as they wished and to take whatever measures they considered wise in their own circumstances. They had freedom to do it and that is the freedom we think the Minister for Finance should have seen we would also have. The fact that you have your own system does not mean that you are so fixed to it, that you are rigidly bound to a certain set of conditions, that you are not able to change. Freedom implies the ability to change when change is advisable.

I had better, perhaps, keep to the immediate matter, which is retrenchment. We would all here be much happier if the Minister had told us what were the steps he had taken to effect retrenchment; what were the retrenchments he proposed before he took the second step of imposing extra taxation. I think extra taxation at the present time is not justifiable [1126] until it is clearly shown that there is no direction in which retrenchment can be effected, and the House should have been given an opportunity of indicating to the Minister directions in which retrenchment could be made before it is asked to impose this extra taxation.

As I have said, the real point is this: that a certain section of the community has fallen down under the burden, is no longer able to bear it, and the burden has to be transferred over to another section who are already fairly heavily burdened. Nobody is going to deny that the increase in income tax is going to put an extra burden on industry. I have indicated on more than one occasion that if extra taxation is to be raised I think it is better to raise it in that particular way than to raise it, as for instance, the Minister proposed to raise it recently, from the small farmers by a sugar tax or something of that kind, when he proposed to give a boon of five shillings to the small farmer and taxed him to the extent of ten shillings on the average to give him that five shillings benefit.

I agree that if there is to be extra taxation it is better that it should be, say, on income tax or on petrol than on sugar, tea or something of that kind. But what I think we ought to be shown before we are asked to vote any increased taxation is that every direction of fair retrenchment should be examined and that the proposition for this should be before the House before we are asked to pass this extra taxation. The Minister began, in my opinion, at the wrong end of it. It is typical of his attitude whenever we propose reductions in extravagant salaries. When we pointed out that from the official point of view this country was being run on a grand imperial scale, without any recognition of our own resources, we were met with scorn and derision by the Minister. It is typical of his attitude of mind that he should propose here that taxation should come first and when we have provided some £450,000 extra to meet the deficit for the coming year that we should be asked then to retrench so as to find the remaining half.

[1127] We do not know at the moment that the Minister is going to retrench in directions in which retrenchments are possible and I, for one, am going to oppose any increase of taxation until I am satisfied that every direction in which the Minister can retrench, where there is extravagance and not on the old age pensioners or some people like them, who have a right to live and who should be helped by the rest of the community, has been explored.

Mr. T.J. O'Connell: It is impossible not to have a certain amount of sympathy for members of the Government Party, especially those of them who go round from week to week making speeches telling what the Government have done for the country. We are told they brought peace to the country and last week or the week before we had a measure in this House during the discussion of which it was made quite clear that they had not brought peace to the country. Now the prosperity they have brought to the country is under the microscope. I do not know whether it will be possible to continue in view of the arguments we have heard, the statement that this Government has brought great prosperity to the country. The Minister in bringing his proposal before the House said that it was the custom in this House on all occasions to oppose all taxation and to demand the expenditure of more money. Now I think an examination of the line taken by this Party on many occasions will not show that his statement would apply to the members on these benches, because while we have advocated and do advocate an expenditure of money we have never refused suggestions from the Minister for the raising of that money so long as it was proposed to raise it from people who, in our opinion, were best able to pay it.

I think the Minister will remember that when he insisted some years ago —I think it was before the main Opposition Party came into the House—on making a sharp reduction on income tax there were protests from the Labour Benches to the effect that if relief was to be given it should not be [1128] given to the income tax-payer in preference to the old age pensioners and other poorer classes of the community. That in fact was what the Government did on that particular occasion. I think that was 1925 or 1926. It has never been proved conclusively that these reductions in income tax which were made on that occasion did in fact bring about the great stimulation to industry which it was claimed by the Government would be brought about by these reductions.

I am at one with Deputy de Valera that it would be well that the House could look at the proposals as a whole, not alone at the proposals for new and additional taxation, but the proposals for retrenchment which the Minister speaks of—at the picture as a whole—and judge as between increased taxation on the one hand and retrenchments on the other. From the figures which the Minister gave it is clear that he proposes to save approximately half a million pounds by economies. I do hope that when economies are being made he will find some other avenue for them than the social services. It was a remarkable thing that on a former occasion when the Minister was being pressed, possibly by the same influences that press him now—international financial influences—to make economies he made them at the expense of the social services, the old age pension, education, and services of that kind. I trust if and when he proposes to make economies on this occasion he will remember that drastic economies were made at the expense of the social services on previous occasions and at the expense of the lower paid public servants and that he will not look in that direction, but in other directions where undoubtedly economies might be made.

In this country we are paying a million and a half to keep up an army. I think there is no one in this country who is prepared to say that the country can afford to pay more than a million for the services of an army. Disarmament is in the air in every country in the world. We ought to be the first to set a good example in that direction, seeing that our army is not [1129] likely ever to be engaged in international conflict. There are very few who will say that anything more than a million should be paid for an army in this country. If I might make a suggestion, in that one service alone the Minister would be able to find the greater part of the sum he requires to balance his Budget. There are many other services in which economies could be made too. I trust that the Minister will not be tempted, merely because the cost of a social service is high and that by making a small percentage cut he will get a large amount of money, to take that line as the easiest line for him to adopt, as was the case on a former occasion.

The taxation which he proposes here, mainly an increase in the income tax, is undoubtedly preferable—an increase in petrol also—to any other of the taxes which we are accustomed to, like taxes on tea, sugar and things of that kind. In so far as that is concerned I would be prepared to support these particular taxes, but I should like to hear a great deal more from the Government as to what steps they propose to take, if they propose to take any, to break away from the net of international finance that this country is tied up in, as other countries in the world are. I could never see why this country should continue to burden itself with the economic system that prevails, say in Britain, America or any other countries. I cannot see why any country such as ours with only three millions of a population and with very great resources could not so organise its resources and credit that we should not continue to be the slaves of economic systems that prevail in other countries.

That is the position we are in at the present time. The people of this country are really the slaves of an economic system which is out-of-date and which has brought poverty and misery to the people of a great many other countries. I cannot see why we must continue to live in that particular way. No effort has been made by the Government and no effort apparently is likely to be made to see whether it would not be possible to so reorganise and drastically reorganise if necessary, [1130] our economic system in this country that every one of the three million inhabitants should get a due share of the necessaries of life from the resources of the country. There is no doubt whatever that that could be done. After all we have the power to do these things, we have the power to reorganise our resources and our economic system, and we can afford to be independent to a very great extent of the financial systems in other countries. Having that power, I think it is unwise that we should continue a system that has brought every country in the world to its knees, and none of these countries is in a better position to get out of that than we are here in the Free State. We saw what happened in Great Britain. We saw that these retrenchments and economies were declared with a great flourish of trumpets. A new National Government was formed to effect economies. For what purpose? To save the pound. That was the declared purpose of the political crisis.

Mr. Good: To save the country.

Mr. O'Connell: I am taking the British Chancellor's own statement that it was to save the pound. In a fortnight or three weeks afterwards we had the same Government going off the pound and telling the world that it was the grandest thing at all. We have some idea of the influences that are working and pulling the strings behind Governments and forcing Governments to dance to whatever tune they wish to play. I do not think that we should allow ourselves to be influenced by such things, especially, as I said a moment ago, when we are in a position in this country—more so than any other country—to get out of that position.

It is difficult at this stage to go into the matter at any great length. I certainly would feel in a much better position to judge of the value of the proposals of the Minister if he told us what he was doing not alone in regard to one side of the matter, but as to how he was going to raise the extra amount which he says is necessary. I believe that the credit of this country [1131] is good. I believe it does not entirely depend on a set of figures which are provided by the Ministry of Finance at the end of the year. I believe that the credit of the country depends on a great many other things. I do feel that the Ministry are too much inclined to be conservative in their attitude and I feel if steps were taken to increase the circulation of money in the country, whatever method may be adopted to do that, the country would be more prosperous. The whole object of life in this country is not to balance the budget and it ought not to be. There are other things worth living for. I believe that a real, earnest effort has not been made and is not being made to deal with the situation that exists in this country, whereby a very big proportion of the population are not given the opportunity to do useful work and the remainder of the population have of necessity to carry these unemployed people on their shoulders. I know that the Minister's usual reply to this is that schemes cannot be inaugurated unless they are economically sound, but it is a question as to whether it is better that people should be at work, even if it is not bringing in a four or five per cent. return on the capital expenditure, than that people should be completely idle as they are at the present time.

Now is the Minister and are the Government prepared to come forward and confess to the Dáil that they find it impossible to devise any method by which people who are unemployed in this country would be put to useful work? I cannot believe that it is impossible to have that done, and I believe that if that were done our budget position would be in a much more satisfactory condition than it is at the present time. I believe that the best interests of the country would be served—and I think they would undoubtedly get the co-operation of everybody in the country in this—if the Government directed their attention to this, which is after all our biggest economic problem in this country, the problem of finding work for those who are unable to find work and who have to be, as I said, carried on the shoulders [1132] of those who are fortunate enough to be in employment at the present time in the country.

Mr. Good: As I have pointed out on previous occasions, it seems to me that one of the most serious defects in our Parliamentary system in this country is that we are called upon, not only to debate proposals of a very important character, but that we are also called upon to vote upon those proposals without having the opportunity of considering them in detail as we should like.

Mr. Flinn: Deputy Good voted for every closure motion that has ever been put in the House.

An Ceann Comhairle: No interruptions in this debate.

Mr. Allen: And Deputy Good voted for the Constitution (Amendment) Act.

Mr. Good: That being so, we are called upon, as I said, to discuss these proposals without having given them a considered judgment. Anybody who has kept at all in touch with the economic situation as we see it in other countries around us, and in more distant countries, could certainly not have been taken by surprise by the announcement that the Minister for Finance made to us this morning. Budgets in nearly all countries have shown very serious deficits, owing to the bad trade and other conditions that have been prevalent all over the world for some considerable time past. But what I do object to in the proposals of the Minister for dealing with the deficits here is that he has not spread the net sufficiently wide. Industry at the present moment in this country, as well as in all other countries, is in a very depressed condition. Those of us who are in trade know that trade in all departments is bad at the moment. The great mass of the revenue that the Minister hopes to derive from these two proposals to increase income tax by 6d. in the £, and to increase the tax on petrol by 4d., will have to come from industries which are seriously depressed at the moment; and while one does not like to forecast possible reactions [1133] from throwing additional burdens on a depressed industry, one cannot but see that one of the effects of these proposals will be to increase unemployment. Of course, immediately the Minister makes proposals for getting additional funds, we have Deputy O'Connell and other members, presumably, of his Party stating: “Oh, take them off the other fellow. Don't attempt to touch the social services. Don't attempt to touch us.” I think we have reached a crisis in this country somewhat similar to the crisis which has been reached in other countries; and I should like to hear from Deputy O'Connell and from other Deputies in this House, that during such a crisis, in order to help their country through such a crisis, they are prepared to shoulder their share of the burden.

Mr. Cassidy: Social services here are lower already than in England.

Mr. Good: We will hear the Deputy later on when all the Minister's proposals for meeting the deficit are before us.

An Ceann Comhairle: This is only the first of a series of motions; it is not the last occasion at all for speaking here.

Mr. Good: On this occasion one does not want to deal with all the speeches that have been made and with all the arguments that have been put forward. But Deputy O'Connell stated that the reductions in income tax that have been effected in this country, that the low rate of income tax that has been prevalent in this country for some years past, have not been of any benefit to this country.

Mr. O'Connell: I did not say that.

Mr. Good: Deputy O'Connell said quite distinctly or, at least, I understood him to say that no benefit had accrued to this country from the reduction in income tax.

Mr. O'Connell: No. What I said was that when the income tax was reduced we were told that there would be a great stimulus to industry as a result. [1134] I said that I did not see that great stimulus to industry in this country.

Mr. Davin: Would the Deputy tell us where the stimulus is?

Mr. Good: I do not want to go into a detailed discussion of this big problem on this occasion, but if the Deputy would consider the proportion of unemployment in this country with the numbers unemployed in other countries where income tax is higher he will see that we have derived benefits from the lower income tax in this country which are not to be found in other countries where the income tax is higher.

Mr. Corry: The Deputy is concerned with people who have £30,000 a year.

Mr. Good: We will have all these proposals from Cork and elsewhere and I am satisfied from our experience in this House that we will have these proposals from all parts of the country.

Mr. Anthony: Including Cork City.

Mr. Good: I am sorry that the Minister has put before us an incomplete scheme. He has told us that he hopes to bring forward at a later stage certain considered retrenchments. I think that, on this occasion when he was putting on additional burdens, he should have told us exactly what his ideas were in regard to retrenchments. Dividing a matter of this importance into two different compartments is, I think, exceedingly inadvisable. It is a part of a whole and should be discussed as a whole; and for that reason I am sorry that the Minister has not thought fit to bring forward here a complete scheme. As I have said, I am sorry also that the Minister has not seen fit to widen his net in order to secure the additional finances that are necessary; and I would ask the Minister to consider whether it would not be advisable, even at this stage, to lower the rates of income at which people become liable to income tax so that the burdens might, in that way, be divided over a larger number.

Mr. Davin: There it is.

[1135] Mr. Good: Of course anything at all that takes anything from our friends is anathema.

Mr. Davin: Following in your father's footsteps. Good old Britain.

Mr. Good: It is the duty of those who have to carry on the finances of this State to see that the burden is fairly and equitably distributed. That is what I want to point out and that is what I say the Minister's proposals do not do.

Mr. Blythe: Might I intervene to say that I think it is necessary that the two Resolutions should be disposed of to-day? I do not propose any general Resolutions such as are ordinarily proposed, but I think in a case like this on the Second Stage of the Income-tax Bill it will be possible to have a general debate.

An Ceann Comhairle: Is it proposed to have two separate Bills?

Mr. Blythe: Yes, because the Income tax cannot be delayed.

An Ceann Comhairle: I take it that it is agreed that these motions are to be disposed of to-day. That is the usual procedure on budgetary proposals. If the intention is to have a separate Bill on the income-tax proposal, the Second Stage of that Bill would, of course, give an opportunity for a discussion similar to the discussion that takes place on the principal Finance Bill of the year. Some such opportunity must be afforded, and the discussion on the Second Stage would appear to be suitable.

Mr. MacEntee: The feeling in this part of the House is that there should be the fullest possible discussion given to the proposals of the Minister to-day. If there is any difficulty in regard to time it would be easy for the Minister to propose that the House sit late. We have from 10.30 to-day until 10.30 to-night, and to-morrow night as well. We have had sittings through the night to discuss proposals which were not at all so important from the point of view of the business community, on whose behalf Deputy Good purports to speak, or from the point of view of the [1136] general public as the proposals which the Minister has now submitted to the House.

Mr. Blythe: I do not think that would be an acceptable proposal at all. If there is to be a prolonged discussion, the natural time is on the next Stage, and not on the First Reading.

An Ceann Comhairle: Yes, when Deputies have an opportunity of seeing the Minister's speech in print.

Mr. MacEntee: We are quite prepared to deal with the Minister's speech now.

An Ceann Comhairle: This is the first occasion on which there has had to be a supplementary Budget. For that reason it is necessary that the procedure should now be laid down for dealing with a supplementary Budget. To my mind, the best procedure is that it should follow the line of the ordinary Budget. That is to say, that the proposals should be disposed of one day and that another opportunity should be taken when the House has had an opportunity of reviewing these proposals, to have a general debate on them. That is the procedure that has been taken on the Budget. The precedent we are creating now is the precedent that will be followed in the future when the Minister for Finance brings in proposals. Certain Deputies here like Deputy de Valera, Deputy O'Connell, Deputy Good, and others, will make observations as they have made to-day, but the general debate will be postponed to some other day. That is the precedent that it would be desirable to create from the point of view of the House and from the point of view of the finances of the country.

Mr. Derrig: Is not the House committed to these resolutions which have been passed to-day? Have they not some legislative effect?

An Ceann Comhairle: The Income Tax Resolution has not but the Petrol Resolution has. The Customs Resolution in Paragraph 8 is declared to have effect under the Provisional Collection of Taxes Act and it will have effect immediately. In the other case a Bill is necessary before the tax [1137] is operative and it does appear that the Second Stage of that Bill will give the best opportunity for a general discussion.

Mr. MacEntee: While that procedure might be desirable in the ordinary way I desire to say that this is not a normal occasion. I trust that it is really an abnormal occasion as far as the future finances of this country are concerned. I do not suggest that the precedent made at other times should be followed now. The viewpoint of the Opposition is that there are matters in the proposals of the Minister for Finance which could and ought to be dealt with now so that the public may be fully aware of all the implications in the proposal and the attitude which the Opposition takes in regard to it. If the debate is allowed to stand over until the Income Tax Bill is introduced it will simply mean that a considerable amount of public interest will, in the meantime, have been dissipated. While the public have been aroused to the seriousness of the proposals of the Minister, the Opposition feel that it is its duty to speak fully on this matter now.

Mr. Blythe: Any arrangement that would leave over to another day the passage of these Resolutions is inadvisable and unsuitable.

Mr. Derrig: As a Deputy of this House I am willing to give the fullest possible support to whatever steps the Government deem necessary in the present situation, and I am willing to give the Minister the fullest co-operation in arranging the time. May I suggest to the House that the Minister has treated us very unfairly by introducing legislation of this far-reaching character on a Friday morning and having a short discussion of only a few hours on the matter? What is to be said now definitely settles the question. Nothing that may be said next week can possibly alter the decision taken to-day. I would strongly urge that the House should sit until 5 o'clock so that there would be no appearance of a Closure. I do not think the discussion will be needlessly [1138] prolonged, but I think that the speakers from all sides of the House should be given a reasonable opportunity to say what they think of the proposals.

Mr. Blythe: I think it is unreasonable to ask this. I think that the only suitable and profitable discussion of a prolonged character is the discussion that would take place on the next Stage, when certain members would have an opportunity of examining our proposals fully.

Mr. Derrig: We have had ample opportunities of examining these questions, and we are thoroughly conversant with the conditions throughout the country. The proposals here are simple. Unless the question of retrenchment is one that is not going to be burked, there should be no occasion whatever to prevent the House from expressing its opinion on these resolutions.

Mr. de Valera: Will the Minister promise to bring in his motion for retrenchment before we complete this Bill?

Mr. Blythe: No. I could not do that. It is necessary if the income-tax motion is to be effective at all to take all the Stages of the Bill next week, because otherwise the collection will be delayed.

Mr. de Valera: Surely a week in the case of income tax should not make much difference. I cannot understand that at all. It seems to me that the delay of a week in the collection is not the principal matter. It is much more important that we should have before us, before we are asked to pass judgment on these resolutions, the complete scheme of the Minister We want to know what are the proposals of the Minister in the way of retrenchment before we are asked to vote for increased taxation. The Minister is going to be denied the support that he might get because of the fact that we do not know the proposals in the Bill for retrenchment. I have an open mind on the matter. If we have a deficit it must be met. I am going to oppose these proposals to-day at this stage, though [1139] it is possible that if I saw the whole scheme I would have to admit to myself that these proposals are necessary. At present, I do not know whether they are necessary or not. We will not know that until we have the retrenchment Bill before us. Why did the Minister cut it in half? The Minister said, “I want £1,000,000,” and he said, “I will get half of it by extra taxation and the other half by retrenchment.” Is not that the way it was done?

Mr. Flinn: I object in the strongest possible manner to this being rushed through in this way. The House has been treated with insolence. There is nothing sudden about the emergency with which we are faced. They could have met last week. They could have dealt with that matter early in the week when we could have had an opportunity to discuss it. Why have they deliberately chosen a Friday morning for the purpose of introducing it? They have deliberately chosen it for the purpose of stifling discussion so that the people over the week-end will not be in possession of the information and the opinions in relation to these new proposals to which they are entitled.

An Ceann Comhairle: The Deputy has made a protest on this particular point and I think he might now sit down.

Mr. Flinn: I expected to be told to sit down anyway.

An Ceann Comhairle: An opportunity is bound to be afforded to the principal speakers of all Parties to discuss this matter.

Mr. Derrig: Were the leaders of this Party acquainted with the fact that any such proposals were being brought forward or were the Cumann na nGaedheal members themselves informed?

An Ceann Comhairle: Deputies will have to remember that they are making procedure not for this particular Minister for Finance, but for the Minister for Finance, whoever he may be, at any time who finds himself in [1140] this position. The Parliamentary practice in the matter is that when a Minister for Finance brings in proposals of this kind he generally gets a decision on them before the end of that Parliamentary day. The Standing Orders of the House and the Parliamentary practice involve further discussion before the House is committed finally to the proposals made. I cannot, of course, settle the matter, but I suggest that the question of procedure on Budgets and on supplementary Budgets is an important one to be settled. If all these proposals were dealing with Customs, once you began them you would have to conclude them in the nature of things.

Mr. de Valera: I think you lost sight of the fact that those who object to the rushing of this have been prepared to sit on and prolong the Parliamentary day. We are quite prepared to sit on. I may say, as far as I am concerned, that it is not the question of whether it is disposed of now or not that affects me, but whether before it is finally dealt with we will have the retrenchment proposals. That is really what affects me personally. As far as the complaints from other members of our Party are concerned we think that the sitting can be prolonged. Why not prolong it so that the matter can be discussed?

Mr. Blythe: There are many Deputies who have other business to attend to than the Dáil and it would be most undesirable that at the mere whim of Deputy MacEntee or some other person they should be detained here and that their arrangements should be put out.

An Ceann Comhairle: I am interested in this question from the point of view of getting the procedure fixed for doing this business, which is the most important business, except the election of a President, that the House has to do. I would very much like to prevent Deputies on this question as to how we are going to do this particular piece of work getting into a bad temper or being in disagreement. It is a most important piece of work and we must have a specify way of doing it. I [1141] hope we shall have no bad temper about it.

Mr. Davin: If the Opposition Parties are to be regarded as having rights and responsibilities in a serious matter of this kind they should be given some fair play and some latitude should be allowed. I do not think it is necessary, as somebody suggested, that the discussion should continue until 10.30 p.m., but I believe that the President should consent, in the exceptional circumstances for which he himself is responsible, to additional time being given to it, and I suggest that up to four or five o'clock might be given for the continuance of this discussion. I ask the President to take into consideration the rights of members of the Opposition who have nearly as many members as the Government Party.

The President: There are Parties in this House besides the two Parties mentioned and they have, according to their numbers, just as many rights as the two Parties spoken of. Normally on a Budget day the time allotted or taken is about the same as is allotted to-day, but members on the benches opposite must remember that they have no more rights than the members on this side and that they are not going to get any more.

Mr. Flinn: Deputy Good has already protested.

An Ceann Comhairle: We are not going to get any further in this way and we are merely wasting our own time.

Mr. de Valera: In the case of the ordinary Budget we start about 4 o'clock and have up to 10 or 10.30 as a rule to discuss it.

An Ceann Comhairle: It nearly always finishes about 6 o'clock.

Mr. de Valera: That is because it happens to be so. I do not know but the whole discussion might end in an hour.

The President: Let us have it.

Mr. de Valera: We want to be sure that there is to be no closure, that if it were necessary to prolong the sitting [1142] to give those who want to speak an opportunity of doing so, it would be prolonged.

The President: The Deputy is practically inviting this House to discuss the matter and leave it undecided at 2 o'clock—that is the essence of what he says.

Mr. de Valera: No.

The President: What else does the Deputy mean?

Mr. de Valera: I want to protest against what I regard as a nonsensical interpretation of what I said. I cannot understand how the President could reasonably conclude from what I said that I want anything of the kind. I admit that this matter has to be settled one way or the other before the House adjourns.

The question is whether it being the day it is, with a short sitting, we should not prolong the sitting so as to give members who want to speak the opportunity of doing so and at a reasonable time to bring the debate to an end.

The President: What the Deputy is asking for really is an hour or more over the length of the ordinary Budget discussion, and this is only a supplementary Budget.

Mr. de Valera: No.

The President: That is what it means.

An Ceann Comhairle: In the absence of agreement all we can do is to continue the debate. There is the possibility of a suggestion which would satisfy everybody, but at present it seems that we can come to no agreement here and so we must continue the debate. I suggest that an effort should be made on an occasion like this to come to a definite agreement as to how the business is to be done. For the moment I will leave it at that and call upon Deputy Shaw. In the meantime I shall endeavour myself to try and arrange some agreement.

Mr. Shaw: I think the general public and the income tax payers will be relieved that in the extraordinary [1143] world conditions prevailing, and their reactions here as well as everywhere else, our position is not worse and that we still can have a rate of income tax 1s. 6d. under the British rate. The increase in the income tax will be offset by the fact that there is going to be a slowing up in the collection of arrears. Income tax payers will be very pleased to hear that there is to be a slowing-up process in connection with arrears. I always held pretty strong opinions that the method of collection of arrears was unfair. The Minister has pointed out that this supplementary Budget is necessary because of a loss of £670,000 on the beer and spirit duties; £80,000 on motor-car duties; £80,000 on income tax. It is quite clear that all these reductions in revenue have been caused by the abnormal world conditions prevailing.

The tax on petrol is very heavy. I was hoping that it would not be so high as 4d. In view of the fact that motorists are contributing £2,000,000 per annum to the Revenue Department I hope that this tax will be reduced at the first opportunity. It was my intention to discuss these matters further, but in view of the short time available I shall reserve what I have to say until a later date.

Mr. MacEntee: The attitude of the Government in regard to these proposals is possibly best indicated by the words of the President. He said it is only a supplementary Budget. When we come to consider it, surely the fact that it has been necessary for the Government to introduce a supplementary Budget to get an increased proportion of the amount of national wealth available to defray the cost of government, is one of the gravest and most significant portents so far as the future economic condition of the country is concerned. I have said that I hope this will be the last occasion on which it will be necessary to introduce such a Budget. What has made it imperative that the Minister for Finance should come here and face the Dáil with these proposals? First of all, that the income of the country has so [1144] declined that the ordinary taxes no longer yield to him that amount which is required to defray the expenses of government. In such a situation the President endeavours to make light of the proceedings by saying that after all this is only a supplementary Budget. Only a supplementary Budget which, I suggest, has been engendered by Governmental extravagance, and is now fostered in this House by Governmental mendacity, because the statement which the Minister for Finance put before the House is a false and misleading statement upon the face of it. He bases his proposals upon an estimated deficit of £900,000. I say that already, with only seven months of the financial year having run, the excess of expenditure over income in this State is already £1,140,000. That increase of expenditure over income has been largely occasioned by the fact that, as the Minister for Finance himself admits, the taxes are not giving the yield which he estimated they would give when introducing his Budget seven months ago.

The present deficit of £1,140,000 is also due to the fact that since the introduction of his Budget for the current year the economic position of the country has gone from bad to worse, and during the five months that are yet to come that position will deteriorate with ever-increasing rapidity, so that, as we already have a deficit of over £1,140,000, we may be quite certain that when the year's accounts come to be made up we will have a deficit not of £900,000, as the Minister for Finance stated, but, I believe, of something in the neighbourhood of one and a half millions.

Why does the Minister come to the House and endeavour to mislead us in this way? Because for the last six years the Minister and others associated with him have been selling gold bricks to the Irish people, telling us that we were one of the countries in Europe which were waxing in prosperity; that when world-wide conditions were producing economic depression last year the farmers of the Twenty-six Counties were to be envied amongst the peoples of the earth because they alone were prosperous. [1145] There is an old saying, and a true one, and it is very applicable here, that murder will out, and now the murder of the economic prosperity and prospects of the Free State by the Minister for Finance and the Executive Council has come out. When we criticised expenditure here and criticised the policy of the Government on public platforms we were told that the economic conditions in this country were on the upward grade. We were told the country was turning the corner. Now the Minister for Finance comes along to the Dáil and says the yield from the beer and spirits duties is an indication of the economic condition of the country. That is a remarkable statement—one of the few grains of truth that may be winnowed from the chaff of his discourse, that the yield from beer and spirits is an indication of the economic condition of the country. Let us take the Minister's own criterion as to whether the country is turning the corner or not. Whether we increased in prosperity under a Cumann na nGaedheal Government——

Mr. Blythe: The Deputy is misrepresenting me. What I said was the rate of decline. It was declining all the time.

Mr. MacEntee: The rate of decline! I do not see there is any inconsistency —surely the one word connotes the other.

Mr. Blythe: Not at all. The Deputy knows there is a constant decline.

Mr. MacEntee: The Minister can answer me later on. At any rate the yield from beer and spirits which the Minister states is to be the criterion of prosperity——

Mr. Blythe: I did not say that.

Mr. MacEntee: The yield in the year 1924 was £5,640,416. In the year 1929, the last for which I have the exact figures available, it had declined to £3,695,483, showing a total decline of over £2,000,000 between the years 1924 and 1929. If the Minister is to be judged by his own words, we have in them an admission that under this [1146] Government the economic conditions of the country have deteriorated by forty per cent. inside of five years.

Apart altogether from the fact that the Supplementary statement which the Minister has put before the House as to the present and future position of the country is fallacious and misleading, there is one other thing I think that emerges from it, and that is that the Government, whatever else may be said of them, are consistent in their financial policy. Deputy de Valera has already stressed the fact that we have proposals for increased taxation introduced before we have proposals for economy. The watchword of the Government from 1922 until 1931 remains as it always has been: taxation before economy. That is the guiding principle of the Minister for Finance in every one of those financial matters. Not only this year, but every year since we came into this House whenever the Minister put his Budget proposals before us we urged upon him that the economic conditions of the country did not justify, and could not sustain the demand he was making upon the resources of our people. We urged upon him that every avenue of expenditure should be explored and that all possible retrenchments should be made. He told us that every avenue of expenditure had been explored, that there was no room for economy, that no room for possible retrenchment existed, and now when he is driven to it, when the people cannot pay him any more, when their poverty has become so great that they are even unable to provide for themselves, let alone to provide for the drones in the Government, he comes along and says that now they have discovered retrenchments can be made.

Every retrenchment that can be made to-day in the public service could have been made at the beginning of the year, could have been made last year, or in 1927, 1928, or 1929. If it had been made then the condition of this country in relation to the world market, and as regards the social conditions of its people, would have been very much better, and the people would have been very much better able [1147] to bear the increased burdens which the Minister for Finance now proposes to lay upon them.

I do not know whether at this stage I should address any portion of what I have to say to the remarks which the Minister made regarding the exchange position. I say that if the Minister had acted with prudence and in a spirit of foresight in this matter, we would have been in as strong a position to weather the storm as France, Holland or Switzerland. But because the Minister for Finance is incapable of acting independently in this matter we find ourselves in the position in which we are to-day, tied to a currency which is going down, which is bound to deteriorate, and will depreciate very much more than it has done even up to the present. I think it was the President said that we were anchored to the £ sterling, and now the £ is a millstone round the necks of the people and is dragging them down to the bottom of the sea. That is the sort of safe anchorage that particular currency has afforded us. He said that one of the reasons, when they came to considering our financial relations with the British money market, which determined them that our currency should remain anchored to sterling was that if we set up an independent currency there would be a tariff against us in the British market. I do not think if that proposition were examined that it could be sustained. There would be no tariff against us in the British market. We only sell in the British market what there is a demand for.

When the President of the Executive Council was endeavouring to get the people to believe in the blessings which flow from the bankruptcy of our nearest neighbour and from sympathetic bankruptcy on our own part, he said that one of the consequences which would flow from the fact that we are tied to the £ would be that our prices would appreciate in the British market. I wonder has any farmer secured an increased price for his cattle since the £ sterling went off the gold standard. Since we went off [1148] the gold standard has there been any increase in the price of cattle? Has there been any increase in the price of any commodity sold by our people in the British market? There has not, but there has been on the other hand an increase in the price of things which we buy through the British market. We have seen the price of metals going up. We have seen the price of the manufactured commodities which we buy from the British go up. They are bound to go up because Britain has to buy the raw material in the world market and world prices are going up as against Britain.

Undoubtedly I think that if we had gone off the gold standard there would have been set up a rate of exchange between this country and Great Britain, one of the effects of which would have been to impose a tariff on imports and to have given our manufacturers a chance. We have an adverse balance of visible trade amounting to £11,252,106. Our farmers would have got the same relative price in the British market as they are getting to-day for their produce. Our manufacturers would have protection against that £11,252,106 adverse trade balance, and because the general tendency would be to throw our people back on their own resources. The financial and economic position of the country would be very much better if we had an independent currency instead of being tied to the sinking pound.

The Minister put forward the specious argument that certain Scandinavian countries have gone off the gold standard, and that they have gone off because they wanted to reap the benefits and advantages which flow from dishonest bankruptcy. These countries were driven off the gold standard. They did not go off it willingly nor because they wanted to maintain their place in the British market. Norway and Sweden went off because the banking institutions in these countries made the same mistake as the banking institutions in England made. They borrowed short and long, and had no option, because they could not meet their immediate commitments, except to suspend payment. In [1149] the case of Denmark the position is possibly slightly different. Denmark had entered into long term commitments in the British market, and, in addition, a considerable amount of British money is invested in Danish agriculture. We are not in that position. The unfortunate thing about this country is that it has lent long, and that so far as Great Britain is concerned, the creditor is now endeavouring to carry a composition. We have very little foreign money invested in our agriculture. It is practically all native money. We have no long term commitments in the British market, because we have no winter trade as far as dairying is concerned. We are in quite a different position to Denmark, and could have carried on on an independent currency and maintained our trade with Great Britain in exactly the same way as Holland, France and Switzerland are doing at the present day.

I said that murder will out, and if there is one thing that the Minister's supplementary Budget speech to-day has done, it has deprived the Executive Council of the boast that they had improved in any way the economic position or the credit reputation of this State. When the last National Loan was being floated we on these benches examined the conditions of the issue in detail and we said then— and it is being admitted to-day—that judged by criteria of real value, the third loan was being issued at a higher rate of interest than either the first or the second national loans, and the Minister comes along now and says that one of the causes of his present difficulty is that there has been an appreciation in the real value of fixed charges. That appreciation in the real value of fixed charges has been proceeding here from the year 1925 and the Minister comes to the House to day and admits that fact, although he denied it before. The credit reputation of this country under the present Government in 1931 I believe stands at a lower ebb than it was in 1925. I believe if these proposals are carried to-day without a full examination of the whole situation, without first [1150] having before us full details of the retrenchment which the Minister proposes, the credit reputation of this country will be damaged, because however the speech of the Minister may affect the House it is not going to affect, and certainly is not going to satisfy those outside this House who are in a position to examine for themselves and to form their own judgments as to the requirements of the situation. I believe that when we come to balance our accounts at the end of this year on the basis of the present taxation and expenditure we will have a deficit of not £900,000, but a deficit of almost one and half millions. The Minister has indicated that he proposes to find from retrenchments something in the neighbourhood of £500,000.

I think that if the Departments of the Government were carefully combed out there would be no difficulty in making retrenchments amounting to well over one million pounds.

Apart altogether, however, from any retrenchments that may be made, there are other sources of expenditure to which we might have recourse, if we want to make our accounts square at the end of the year. The Minister could think of only one way and that is by imposing an additional burden on the people. At the beginning of my remarks I stressed the fact that the reason for this increase in income tax, and in the tax on petrol, is that the proportion of the people's income which the Minister proposed to take at the opening of the year, was not yielding him a sufficient return. Now because that income has contracted instead of expanding, as it should in a normal state, the income available has gone on diminishing since the opening of the financial year. Because it has diminished and because it is continuing to diminish, the old taxes are not going to yield the Minister a sufficient income to carry on. Now when income is contracting, the Minister proposes to take a larger part of the contracted income and he is going to leave very much less, after these proposals have been adopted, of the reduced means of the people, a [1151] very much smaller share for them to meet the ordinary expenses of everyday life than he proposed to leave when their income was larger at the beginning of the year. Surely no Government is justified in doing that.

The proposals which the Minister makes involve a definite reduction in the standard of living of every member of the community. In relation to the income tax proposals may I say this: that because the Minister proposes to increase the income tax without making any compensating increase in the allowances, I think this sixpence in the pound is going to fall most heavily on the one section of the community which, I think, has a lower margin over the level of sustenance than any other class. That section is the poorly paid clerical worker, the lower middle class, as it is called. There are men who pay income tax at the rate of 25s. or 30s. a year, who have to maintain a certain position because they follow certain occupations, who have to live in certain houses because they are not able to pay the rents of other houses available for them, because they cannot get other houses at low rents. These are the people who have to scrape from morning to night in order to maintain an appearance of respectability, who are going to be hit hardest by this increase of sixpence in the pound because that increase is not going to be set off by any increase in the compensation allowances.

The proposals of the Minister, as I have said, involve a definite reduction in the standard of living and I ask is a Government which has other resources at its disposal justified in doing that?

The amount of money expended on Governmental services during the year is approximately £25,000,000. Of that sum, 3¼ millions represent the amount paid in annuities which go out of the country and 1¼ millions represents the payment of pensions for the ex-R.I.C. I say that before any additional tax is imposed on income or before there is any increase in the petrol tax—which is a tax on transport and a tax on production—that before this or any other [1152] tax is imposed, the Minister and those associated with him are bound in conscience to examine the whole position created by the payment of annuities to England and the payment of ex-R.I.C. pensions. If these sums were retained in this country we would be able to solve our currency problem. We would be able to cut adrift from the sinking pound. We would be able to face the world as a community and a State prepared to pay twenty Irish shillings to the pound, to a pound which would be equal at least to five American dollars.

Mr. Derrig: I am glad to see the Minister for Agriculture in the House. He has over and over again suggested to us—and no one can accuse him of being insincere in the matter or inconsistent because he has preached the same gospel day in and day out for years past—that tariffs are no solution for our difficulties in this country. On a certain celebrated occasion, which he himself will remember, during the last by-election campaign in Kildare, he went down to Athy and told the farmers of the county that the real solution of the difficulties under which agriculture was labouring was a reduction in overhead charges, a reduction in costs so that if at any rate the income that the farmer was getting was going to be smaller his outgoings would be correspondingly smaller also. In that way, although times are bad, I take it the Minister for Agriculture meant that, at any rate a definite effort was in the mind of the Government to see that they would not be worse. The Minister for Agriculture knows very well for many years past that in every local board in this country the question of the annual rates, the question of effecting petty economies, the question of petty increases in salaries has been threshed out, day in and day out, week after week and month after month. The farmers of the country are being put to the pins of their collars and their representatives on the local bodies are doing their utmost to save by every means in their power every pound that they can for the local rates.

We were told that the farmers could [1153] not get -rating, that the country could not afford it, that it was not the best way to relieve agriculture. What about relieving local charges? What about all the expensive schemes, sent out from the Ministry of Local Government at any rate, and possibly from other Departments, and forced on local authorities who do not want them, schemes that I believe are necessary and very good schemes but that under present conditions when there is no very hopeful outlook for agriculture, and when the present depression may continue, most people of common-sense, outside the agricultural body altogether, will agree should not be proceeded with? It is the duty of the Government to give a lead in this matter, to show local authorities and the local people that they realise the situation, to give a good example as they were often advised in this House and to have retrenchment at the top.

The Minister for Finance comes along to-day and asks members of the Dáil to support him in his efforts to secure retrenchment. The members of the Dáil have never refused to do so. My objection to the Government's proposals apart from the manner, which I regard as nothing less than a tricky manner, in which these proposals were introduced this morning, is that the Government had the audacity to try to blind the country to the fact that the situation was really serious—these people who a few weeks ago had the temerity to send down armed guards to bring up every one of their Deputies to vote for the Constitution Amendment Bill, which cost thousands of pounds. The guards all disappeared last week.

Was it that the Russian bogey had served its political purpose? Is it the purpose to-day to prevent the country from forgetting the Russian bogey and facing up to the real situation, a situation in which, owing to this policy of having ourselves tied tail and neck to Great Britain, we shall soon find ourselves, if we do not make very strong efforts indeed, dragged down into a position such as Ireland has not been in since the 'eighties? The Ministers talk now about retrenchment, but when the Fianna Fáil Party went [1154] around this country and when the daily Press, as it was at the time, refused them a hearing when they preached the necessity for retrenchment and of the need for preparing to weather the crisis then threatening, the then daily Press tried to bluff the people into the belief that things were never so happy or so prosperous. That was its attitude when we had to take it upon ourselves to go down to the cross-roads and preach that doctrine. We did not do that for any petty Party advantage. We ourselves were prepared, and are prepared, to make as big sacrifices as anybody else in the country. We realise they are necessary. I, at any rate, do. Ministers who said that by our speeches we created an inferiority complex in the country, that we created discontent and drove the people's spirits down into their boots, have no right now to come forward and say that they could not get co-operation and support for retrenchment from Fianna Fáil. What about the three and a quarter million pounds that are spent on the Army and the Civic Guard? Would it not be possible to carry out some economies there without doing any injustice to the members of these Forces? What about the Free State Air Force, the one other example that occurs to my mind at the moment? Could it not be dispensed with in the present crisis?

Coming to the question of salaries, the Minister for Finance stated years ago, long before the Fianna Fáil Party came into this House, that the miserable sum of £200,000 that could be saved by a substantial cut on the salaries of the higher civil servants was not worth talking about. Yet, for the sake of half a million pounds, the Minister proposes to impose new taxation on the country. I refuse to believe with my friend Deputy MacEntee, that if the Minister were to go through the State's annual expenditure of £25,000,000 he could not find many avenues in which to effect economies to cover the whole of the anticipated deficit at the end of the financial year without imposing any fresh taxation. I agree with those who say that an increase in the income tax rate and in the petrol tax at the present juncture [1155] is not going to improve matters. The fact is that this House has not been taken into the confidence of the Ministry at any time. They have never taken seriously statements made either inside or outside of this House by members who belong to other Parties. I had thought myself for some time that co-operation was possible and that Ministers were sincere. I thought that when the Fianna Fáil Party came into this House Ministers really wanted to take advantage of that fact, that they recognised that they had stable conditions and could go ahead with a thorough-going programme of national reconstruction and of economy in national affairs. That was not the programme produced by the Minister for Finance to-day when he came forward with his supplementary Budget. If the Minister for Finance and the Minister for Agriculture, who has damned a tariff policy year in and year out, had any decency they would clear out of this House and out of the Government and allow other men to carry out a policy that they at least believed in. If these men failed to carry out the policy they believe in well and good, but at least give them the opportunity. That is what I believe the Irish people want.

I can only conclude that the Ministry are playing with this thing. What Ministers are really concerned about is how the vote of civil servants in the County and City of Dublin is going to go at the next general election. We do not ask any sacrifices from civil servants or from the Army or the Civic Guard unless we are satisfied that they are necessary. But here we have the Minister for Finance coming forward and coolly talking about retrenchment while giving the House no opportunity of discussing the matter. Is it that he wants to shift the responsibility for this policy of retrenchment on to other shoulders, that he is shirking that duty, that he is afraid of the civil servants' vote or something of that kind, and refuses to face up to it? If that is his position, let him be frank and say so. If these are his feelings let him get out and allow somebody else to take over control.

[1156] I fail to understand why, if the situation is serious, if things are going to be worse next year than they are this year, and if the Minister for Finance cannot at the present time see any hope for an improvement in the revenue position as things are now, he had not seen all that before. If it is true, I fail to understand why, even at this eleventh hour, the Minister will not take real steps to improve the position. His effort to try and improve the position by imposing extra taxes on the unfortunate people of the country is absolutely laughable.

The position is that our agriculturists are in a desperate plight. They are going to be in a worse position. Deputies can take it that those engaged in agriculture in this country will not be satisfied with any policy, or pay the slightest attention to what any Party in this House may say—I am speaking now to my own colleagues as well as to members on the opposite benches— unless really serious efforts are made at retrenchment in every department of national affairs. You cannot expect the farmers to settle down; you cannot expect them to work hard, to be thrifty, to get up early in the morning and all the rest of it, and to carry out the splendid advice given them by the Minister for Agriculture, when they see all kinds of extravagance going on. What must their feelings be when they see all the highly-paid officials that we have, all the motor cars that there are, the queues of people that are lined up outside all the big picture-houses in the City of Dublin, as well as the hundreds of thousands of pounds that are going out of the country on luxuries, luxuries that they think we could afford to do without?

The Minister, as well as taking up seriously the question of retrenchment with the co-operation of every Party in this House, should also seriously consider the matter of stopping such imports altogether. A remarkable fact is that when the Minister took power to himself to deal with that situation he had no policy behind him. He had no policy to state to this House. If the Minister were to take steps to stop the importation of [1157] articles that we could very well do without, it is, in my opinion, one of the ways in which the present position could be righted. I suppose if I were to enter further into that aspect of the question I would be told by the Party opposite “You want us to go back again to the hair-shirt policy” and so on. But someone has to do the unpopular thing. The Government in power are not prepared to do that. They are not prepared to cut out these luxuries or to deal with the question of retrenchment in that way. They are not prepared to deal with the situation in the way that those engaged in agriculture, our chief industry, want it dealt with. The present position is that the people are unable to make a living on the land, and if we are not going to have a fuller statement from the Minister as to what he is going to do, then we will simply have to go and tell the country that the Ministry are bluffing, that they are simply carried along by a policy that, as Deputy de Valera has pointed out, may be suited to the entirely different conditions that obtain in England. They are simply carried along by that policy. What is done in England this week they propose to do here the following week or the following month. That is not enough. The conditions here are quite different from what they are in England. We should go along with our own policy, build up our own industries and frame a housing policy that would meet the needs of the country.

I quite agree that our Budget should be balanced. It is fundamental that the credit of the country should be safely established if we are to do that, but I say it is useless trying to build up your prestige, your credit or your good name abroad when the mass of your own people at home think that you have not taken the ordinary commonsense steps that they themselves would have taken if they were in the position of the Ministers opposite to right the situation.

With regard to the housing question. I think all Parties in this House should do their best to try and get the money required to enable the State to have a [1158] proper housing scheme carried out, particularly in view of the fact that the Eucharistic Congress is to be held in Dublin next year. We have heard a great deal of talk about Christianity and morality and the danger of Bolshevism. The conditions in the slums in Dublin are not alone a menace to social order, but I believe a menace to religion itself. Do the Ministers on the opposite side think that they are going to protect religion by putting down the people who are making an effort to put an end to that situation, people who, having failed to secure a remedy here, naturally turn to other methods? I ask the House to consider seriously the position with regard to the slums. Let Deputies look for a minute at the other side of this anti-Christian warfare, let them look at the bankers coming forward and forcing the Government to bring in this supplementary Budget at a time when we have 79,000 people living in slum tenements. Are they to continue living on in these tenements for another generation while the bankers must have their pound of flesh?

If we had freedom in this country or control of our own affairs and if we all believed as Christian men that the slum problem must be settled and settled soon, then I suggest that is one of the first things that should be tackled. We ought to tell these bankers plainly what we think of them. We know that we have the country behind us. We know that the slum problem is a serious menace, and that it must be tackled and tackled at once. What a satire on the whole situation when you had a Government last week bringing in a military Act the like of which was never seen in Russia. They say it is for the purpose of protecting us from the danger of people in the slums and the Gaeltacht rising up and overthrowing us. The Ministry had a billet doux from the bankers saying “Let us see what your Budget is.” That is just what they did in England. If we are as good Christians as we claim to be let us tell the bankers that even above their interests and their pound of flesh is the Christian ideal, the humanitarian [1159] principle of getting proper houses for the people. The lead should come from the men over there in this matter just as in the matter of retrenchment and national reconstruction. That lead is not given to us. Let the men over there get out and give others a chance to lead the country.

Minister for Agriculture (Mr. Hogan): We have listened to a very insincere speech from Deputy Derrig. He tells us that the policy of the Party opposite is to do the unpopular thing, while it is our policy to cater for the popular tastes. That is rather amusing. His solution for the difficulties that confront us is the unpopular solution. Do not pay the money you owe to the banks. That is what his attack on the banks means. Of course we are supposed also to be copying England. Who is copying England? This is now supposed to be a bankers' ramp. Where did the Deputy get that idea? From the other side, of course. The fact of the matter is that the Party opposite are purely imitative, and they get practically all their economic theories and technique from the other side. What is the unpopular policy they are putting forward? Stop paying income tax; supply unlimited money for housing, for roads and for drainage; and when one asks where is this money to come from, one is told there is plenty of money in the banks; take it. That is what Deputy Derrig's speech amounts to. We may also be told that there is plenty of money going out of the country in the shape of Land Commission annuities, and we should stick to it. That is the unpopular policy Deputy Derrig puts forward. We were told also to keep the ex-R.I.C. pensions.

Mr. Derrig: I did not talk about ex-R.I.C. pensions.

Mr. Hogan: Whatever he may think about it, I doubt very much if Deputy Derrig is sincere in that policy. I am perfectly satisfied he does not think it is sound, and I am perfectly satisfied that the Deputy thinks he is saying what is popular. When we ask where money is to be found for all these purposes, [1160] the only suggestion made is an indirect attack on the banks. There is a suggestion that we are doing this under the orders of the banks, and that there is any amount of money for all these popular projects if we can only get after the bankers properly and stick to the Land Commission annuities. I do not want to enter into a debate about annuities.

What does the Deputy ask the House to consider? According to him we are to keep the Land Commission annuities—money lent at 3 per cent.—and we are to go looking elsewhere for money for housing, drainage and all the other popular schemes which Deputy Derrig, whose heart bleeds for the poor people of the country, wants to carry out. That is all humbug. We have nothing to be ashamed of here. Deputy MacEntee, and again Deputy Derrig, said that we were deceiving the country, and they as much as tell us that things are not alone bad but they are worse than we even admit. I will put it to them that the position is that they hope things are bad. I say that they hope from their hearts that the position will be worse next March than it is now. That is what these Deputies really mean. When Deputy Derrig tells us we are hiding the real position from the country, and when Deputy MacEntee tells us the position is very much worse than we pretend it is, they really hope that the position is very much worse.

These people who talk so much about finance and economics and resurrecting the development of the country would rather see the economic and financial position go to bits than to see it coming right. Their one idea now on this Budget, just as it was last week on what they called the Public Safety Act, is to take advantage of any misfortunes, bad luck and bad bad times that may come to the country in the hope that it will bring them political capital. That is what has been sticking out all through this debate. We have nothing to be ashamed of. We have been for nine years acting as a Government. We will be longer, a good bit longer, and that is what Deputies opposite are afraid of.

[1161] Mr. MacEntee: The Minister is afraid of it too.

Mr. Hogan: Deputies opposite are afraid of it both ways. They are afraid we will continue as a Government and they are afraid we will not. I do not know which they are most afraid of.

Mr. MacEntee: There is more hope for the country in the prospect that you will not be.

Mr. Hogan: We have been nine years in office, and what is the position? There were bad times not only here but all the world over. There were bad times in America, in France, in Germany, in all free trade and tariffed countries; in fact, in practically every country in the world. I do not know so much about Russia. I am not the smallest bit interested in Russia. What is our position? We took up government here and we had to pay the cost of a civil war caused by the gentlemen opposite.

Mr. MacEntee: Started by the Minister.

Mr. Aiken: You started it and you were sorry you did not start it sooner.

Mr. Davin: Go back to 1798.

Mr. Hogan: If we started it sooner it would have cost a lot less. We had to take up control in 1923. When we got our hands free we had to establish a Government here and a State. We had to pay the costs of the civil war. We had to do all that without much experience or tradition behind us. The English people know their business nearly as well as the people of any other country. If one is merely to judge by what one can see, the English seem to know their business as well as the Americans or the French or the Germans. Let us compare our position to the English. We did not have the same financial experience or the same experience in running a State as the English had, and yet, as a result of the financial administration of our Minister for Finance for the last nine years, our taxation and financial position generally is much [1162] better than that of any other country in Europe.

Mr. Davin: On paper.

Mr. Hogan: On paper or in any other way. Our tax position, even after imposing these taxes, is a much better position than the position of any other country in Europe. We reached that position in spite of the fact that we had to pay immense sums to repair damage that should never have occurred, and in spite of the fact that there was a tradition in this country, carefully fostered by the Party opposite and by the Labour Party, that there was unlimited money to be had in Dublin; that the Government had unlimited money at its disposal, for all sorts of social services. We had to stand up against that and we were the only people who tried to teach the citizens of the country something about national economy. We were the only people who endeavoured to keep before the people of the country the fact that though they might have services they would have to pay for them in taxation.

We had to stand up against and we did successfully stand up against all these influences, all sorts of demands for money for alleged productive purposes, all sorts of demands for money for increasing the social services far beyond the British scale. I tell that to Deputies who now tell us that we cannot afford to live at the same rate as England.

The result is to-day that our taxation and our economic position is sounder than that of any other country in Europe and we make no excuse whatsoever for balancing our Budget. We have always been fair and square with the people. We have never deceived them. We do not require bankers or anyone else to tell us that as things are going at present our revenue is not equalling our expenditure. We have come here before the Dáil and we say that if present services are to be maintained we must have this additional taxation. We put that before the country whether it is popular or unpopular. Our policy [1163] financially has always been sound. Our policy as far as law and order are concerned has always been sound, as Deputies opposite will realise now. We are going to see to-day, whether we are the next Government or not, that when we leave office you will have law, decency and civilization in this country, and in consequence of balancing the Budget we will be in a sound financial position. We have succeeded in doing both. We have succeeded in establishing law and order. We have succeeded now in righting the financial position with less recourse to taxation than any other European country. We make no excuses for coming forward now and telling people quite frankly what the position is and asking them to face up to it and to put the national finances right.

Mr. Davin: The speech just made by our fighting Minister for Agriculture must in spite of its fighting qualities be very discouraging for Deputies who support him and who were touring the country for the last six months and talking of the peaceful, prosperous nature of the Irish Free State. If there is anyone who could put a false face on the position of the Irish Free State it is our fighting Minister for Agriculture. One would imagine that the Minister when talking of all the Government has done for this country knew nothing of the bargain made with the directors of the Carlow Sugar Beet factory, knew nothing and had no responsibility for the Shannon scheme mess, knew nothing about and had no responsibility for the position of the Irish railways and the position which railwaymen and railway shareholders have been placed in as a result of his Government policy. He is asking the people to remedy things which they cannot and will not remedy. They will have to remember these things and hold him responsible for them as soon as the time for reckoning comes along.

The Minister for Finance, in presenting the financial picture which has led up to the introduction of this supplementary Budget, said that the special [1164] financial stringency is bound to reduce the revenue from beer duties. The stringency brought about as a result of the Government policy is bound to affect every person who has anything to sell and those who have money to buy. It is bound to affect the 100,000 people who are in receipt of home help from the rates, and whose average income per person is as low as 6/- per week. It is bound to affect the purchasing power of the people drawing unemployment insurance benefit and old age pensions. Can the Minister for Agriculture, with all the knowledge he has at his disposal and the knowledge he has personally of the present position of the country, say that the position is going to be better next spring or next year than it is now?

Mr. Hogan: I will not attempt to prophesy.

Mr. Davin: He will not chance his arm. If it is not going to be better next year, who is responsible for it?

Mr. Shaw: The Labour Government in England, particularly.

Mr. Davin: I can assure members of the Opposition Benches that Deputy Shaw will never qualify for membership of the Labour Party. The standard of living of a small section of the Irish people is, in my opinion, unnecessarily high, and is in some cases creating a demoralising effect on the working section of our population. We have innumerable middlemen, gombeen men, and commission agents starting with a few hundred pounds which they scraped up as a result of a pension or something else, starting shops all over the country and increasing the number at the expense of someone else. So long as we do not regulate that system, which is detrimentally affecting the producing section of our population, things are bound to go worse. I want to ask the Minister for Industry and Commerce, who in this matter has some responsibility, whether he is satisfied with the reduction in the price of cattle, milk, pigs and butter which is now being received by the farmers and producers, and which is not being passed on to the consuming section of our population. Is there any person [1165] who knows anything of the state of affairs in Dublin and the other cities and towns in this country who does not know that there is no reduction in the price paid by consumers compared with the reduction in the price presently received by the farmer and compared with the corresponding price which they received for these commodities last year? Certainly not.

Dr. Hennessy: Indeed there is.

Mr. McGilligan: I think I might give the Deputy one example which might come home to him. It is certainly shown in the money which transport users have at their disposal, and which has resulted in the dismissal of certain railwaymen.

Mr. Davin: I refer to what the Minister knows well, to food, clothing and the necessaries of life, in so far as they affect particularly that section of the consuming population who are limited in their expenditure as a result of the policy of the Minister's Government.

Mr. McGilligan: Does the Deputy mean that food and clothes are not now cheaper than they were? Is that what he means?

Mr. Davin: I want to know, for instance, from the Minister whether the people who buy milk in Dublin, Cork, Waterford and other towns in this country are receiving a reduction corresponding to the reduction the farmer receives for that milk? I ask the Minister the same question as far as it affects the price of every other commodity.

Mr. McGilligan: I shall answer my own simple question. The prices of food and clothing have gone down. Some prices with regard to clothing have not gone down as much as they might, but that is for certain tariff reasons.

Mr. Davin: Does Deputy Dr. Hennessy know that in certain parts of the country at present farmers are receiving a price as low as 3½d. a gallon for their milk, and that what I call legalised robbers are charging 1/8 to 2/- per gallon for milk in the City of Dublin?

[1166] Dr. Hennessy: What I say is that most of the milk consumed in Dublin is produced in Dublin, and big wages and every other thing that goes into the cost of production are paid.

Mr. Cassidy: There are thousands of unemployed in Dublin.

Dr. Hennessy: Did you ask yourself what a man milking a cow in Dublin is paid compared to what he is paid in Donegal?

Mr. Cassidy: Yes.

Mr. Davin: I will leave it to the intelligence of the Deputies as to whether that is an answer to my question. I fully realise that Deputy Hennessy must stand up for the people in the southern parts of the City of Dublin who are charging these exorbitant prices. Members of this Party are prepared to support the Government or any Government that stands for balancing the Budget. It is good, sound financial policy. So far as that part of the Government's policy is concerned we are prepared to agree with the Minister. The Minister said that a deficit of £900,000 would have to be made up by retrenchment and by taxation. He has indicated measures by which he proposes to raise a sum amounting to £400,000. Naturally we must assume that the remaining £500,000 will have to be found by way of retrenchment. Notwithstanding the time at his disposal for the past eight or nine months of the financial year, the Minister is not in a position to indicate in any way the means by which he proposes to make up that £500,000. Members of our Party on many occasions have stated that if an army is required in this country for the purpose of maintaining order that army should not cost more than £1,000,000. Personally I am prepared to agree to an increase in the police services if a case can be made for it and reduce the army, because I believe it is a good policy to let people know that an unarmed police force is the body that should be maintained, but I do not believe that an Irish Army in our generation or in the coming generation will be required to defend [1167] this country, with all the talk of peace we have at Geneva and elsewhere. If an Army should be required to defend the country against any outside aggression, surely it will take an army even greater than we had during the civil war period to do that, if it can be done at all.

The Minister for Agriculture, as he has done on many previous occasions, defends the Ultimate Financial Settlement. He makes the case for England against those in this country who believe that there is a case for revision of the Ultimate Financial Settlement. Members of every government in the world who have made financial settlements and bargains with their neighbours are to-day engaged in negotiations for revision of these financial settlements. Is there anything wrong in an Irish Government asking for the revision of a financial settlement and in putting forward as good a case for it as they can in the same way as the Governments of America, France, Germany, Britain and other countries are doing to-day? The members of this Party opposed the Ultimate Financial Settlement when it was submitted to this House for consideration. I believe that a case can be made for the revision of the Treaty and for the financial settlement arising out of it. I want to know does the Minister for Agriculture contend that every settlement made by this Government with the British Government must stand for this generation or for the next? People have a right to say that these settlements should be revised, and it is not for the Minister for Agriculture, as he has done to-day and on several previous occasions, to make a case for the financial settlement which his Government was responsible for making.

I believe that this is one of the cases where all Parties should unite and co-operate, that there is a good case, particularly in the present circumstances, for the re-opening of that financial settlement. I suggest, and I am not suggesting it as a Party member but as a member of this House with responsibility to the people [1168] who are affected by that settlement, that a committee of financial and legal experts should be set up by this Government for the purpose of reporting upon the possible advantages of re-opening the Ultimate Financial Settlement with Great Britain, and the procedure to be adopted for getting such a revision. I am not going to say, as I cannot say as an ordinary layman without any official documents at my disposal, that advantages can be gained or that a case can be made from which considerable financial advantage would accrue. It is only people who are expert in these matters, and who have the documents at their disposal that were never produced to Deputies sitting in this House, who can state such a thing. I believe, however, it would be good, sound policy for all Parties in this House acting on behalf of the nation, and taking into consideration only the national interests, to try to agree upon some procedure which would enable the Government to have that financial settlement reopened. I believe the only way to approach it is to set up a committee of financial and legal experts, who should be asked to recommend to the House the best means to be adopted to secure that end. I sincerely hope that members of other Parties when speaking on behalf of their Party will say whether they support that proposal or not, and if not show the reasons why they are not prepared to do it. I make the proposal in regard to the setting up of this committee in all seriousness at a time when I believe it is appropriate to raise a matter of this kind, and in the belief that a committee of financial and legal experts with all documents at their disposal would be able to make a far better recommendation to the members of this House than any political party or any select committee of politicians could do, especially in view of the political atmosphere in which we live at this particular moment.

Mr. Blythe: I would like to say one word on the question of finishing to-day. It will be obvious to the Deputies that there is need to finish the petrol Motion. If it is not finished [1169] great quantities of petrol will be taken out of bond in the next couple of days. With regard to income tax the need for finishing the income tax resolution to-day is that the Bill might be introduced and dealt with next week. The need for that arises from the fact that there are as many as 600,000 assessments to be altered, and 600,000 collectors' duplicates to be altered. The time in which to do that is very short. Possibly there will be some delay even as it stands. Ordinarily the whole of that work should be done in order that collectors might issue their demand notes for the first of January. Any delay at all means corresponding delay in the payment of cash. If we delay this we might get little out of the extra 6d, or we might get a great deal less than we ought to get.

On the question of retrenchment I think that I must have been somewhat misunderstood. There seems to be an idea on the other side that I have a statement ready on retrenchment which I could make but am not willing to make. I am afraid I did not make myself sufficiently clear. The Government have been examining this question. We had certain proposals which we could make but this is a matter in which we ought to put our whole plan of retrenchment before the House at one time rather than select one particular item or so and put it forward. We want to consider and complete our plan in that regard.

As I said, the income tax Bill really needs to be passed next week. We wi