Last night I was alluding to the general comment one hears with regard to the financial difficulties in which the Fianna Fáil Government finds itself at the moment. One hears comments, generally of this type: In fact, although the Budget seems to lead to a different conclusion, there is greater prosperity in this country than ever before. There is prosperity in agriculture; there is development in agriculture. There is more wealth being produced in agriculture than heretofore and there is a grand revival of industry. If more workers have been employed then, obviously, more wealth is being produced. Other people, however, are not completely satisfied, because the words ring with a hollow sort of sound, even in the mouths of Fianna Fáil enthusiasts at the moment.
There is the second argument which was used last night, that in order to get out of the mess in which we have now been landed, we have only one resort—we must get back again and become part of the British customs area. Of course with that is joined the completely fallacious but clever argument, that to enter into any agreement with Great Britain about this period, would mean the destruction of any new industry which under better conditions of trading might have a chance of growing in the country. Both these things are, of course, entirely wrong. There were trade agreements with Britain before, trade agreements of a much more suitable type than have been got since. There were agreements—somebody referred last night to the necessity of being able to compete on an equal footing with the British in their own market—which not only put us on equal terms with any Dominion but gave us a definite preference for agricultural goods, and not merely for agricultural goods but for a number of industrial products also. There is no apprehension at all felt by anybody who knows what trade agreements with the British are, that any agreement regarding agricultural produce going into Britain must be countered by a British demand that all our tariff barriers or the most of them must be lowered. At the time when we were getting valuable concessions, the tariff barriers were mounting on whatever articles we chose to put them. After eight or nine years' experience dealing with these matters, I can recall no occasion upon which any comment of an adverse type was made verbally or by letter or in any way in relation to these tariff barriers. There is no dilemma. There is no question of the necessity of sacrificing any industrial activity that may be fostered here by means of tariffs in order to get back, even relatively near where we were, in regard to agricultural produce and the sale of agricultural goods in England.
The other point is, however, the important point. The thesis that Fianna Fáil orators have got to substantiate at the moment is that there is great wealth being produced in this country, more than ever before, that the country has never had such a chance of development, that the ordinary Fianna Fáil plans which were mooted have been helped to a considerable degree by the difficulties with the British, and that in fact they are going to attain their goal more speedily than they would have in the ordinary course of development. The question that the people who even say that, whether they believe it or not, have got to answer is this: There is a recognition, I think it is apparent to everybody, that the Ministry are in extremis. They have been driven to go around to scrape the butter off the people's bread. They have to go around with the crumb tray to whisk the crumbs off the people's tables. They have been driven more or less to dip into the tea caddy. They are taxing sugar, they are taxing tobacco, they are doing what Deputy Corry said, they are taxing the things that the people have got to live on, unless they do what the Minister for Industry and Commerce suggested, gaining no credit for himself—avoid taxation by refusing to partake of the commodities that are being taxed—tea, sugar, bread and butter, not to speak of tobacco, pictures and bacon. If they are not in the class of absolute necessities they are in the class of the simplest possible luxuries. These have got to be taxed.
The Parliamentary Secretary to the Minister for Finance who used to be so keen on wiping out income tax has told us here that his policy is that the working class should be taxed. He tried, of course, to put a gloss over that by saying that three-fourths of the people of this country are of the working class. He was discussing the problem in relation to the taxation produced from the necessities of which I have spoken, tea, sugar, bread and butter. He knows the reason that these taxes are spoken of in that way, that the greater portion of a poor person's income goes on these necessities, and that it has been always regarded as unsound to tax things which are necessary to maintain the people's lives and that it is only a Government in extremis would be driven to shift the burden of taxation from luxuries on to the necessities of the people. Let us get the contrast in a country in which Fianna Fáil would have us believe that wealth is being produced in a greater scale than before, that there is more money being made in agriculture and greater development in it, that there is more money being made in industry and that there is greater development in it. Why must the Government tax these necessities of the people if more wealth is being produced in the country? Why did they suddenly shift these taxes from the people who are making money on to the people who are earning wages, the greater proportion of whose means goes in expenditure on tea, sugar, bread and butter? There is, I think, something to be explained there. Of course, the answer which is not acceptable to Fianna Fáil is that there is less wealth being produced in the country, that the sources of wealth are declining, that the things that used to bring in the big sums of money in the country are going steadily. That answer cannot be accepted or confessed because it is a confession of failure.
The original Fianna Fáil plan was cleverly enough drawn even though it was merely a tissue of falsehoods from beginning to end in which nobody could have believed. It was cleverly enough drawn because it had to meet a variety of conflicting points of view. It had to say that there would be more social services, and when people's minds took the natural jump, and said that more social services would cost more money, then there came the other side of the picture and we had to say that two millions would be saved in taxation and that we would have an additional five millions by withholding the land annuities from the British. We had to say that taxation would be reduced at the same time that we had to say that the social services would be increased. We had to say that the money that would be withheld from the British would be used for the purposes of derating, and so forth, at the same time that we had to say that we would get a bigger and better market for agricultural produce, even in England. These were all promised. We could not have more social services without increased taxation unless we were going to say that we would save at least two millions on the existing services. We were going to have five millions as a result of withholding the annuities from the British, which were going to be used to derate agricultural land, and, in addition, we had the statement that we were going to get greater markets both in England and elsewhere.
The Ministry is back on the rocks. They know that social services cannot be provided except at the cost of the taxpayer. There never was anything in "the plan" such as the apologists of Fianna Fáil are driven to at the moment—the statement that, of course, you cannot have social services unless the people pay, or the statement that the people are getting more in the way of social services than what we are taking from them to pay for these social services. These statements, of course, would not have been good draws from the electioneering point of view. It would not have been good tactics to say that we were going to take more money from the people to provide these social services. The answer is provided in the Fianna Fáil Budget. As far as these food taxes are concerned, the answer is a very simple one. The land annuities were promised to the people of this country. They were to fructify and irrigate industry and agriculture. After that they were going to be used in the most helpful ways. After derating, there was going to be a reduction of a million in taxation. In addition, we were told Fianna Fáil were scrutinising the estimates and they assured us they would be able to achieve economies to the amount of two million extra.
Now, if these moneys were there, there should be available the sum of £3,000,000. Supposing the economies had not been made, or supposing that we had the economies made but that the money was not given in a reduction of taxation: that taxation was kept at the old level, we have £3,000,000, and that is the computation made of the main food items taxed in this Budget. The taxes on bread, butter, sugar and tea amount to about £3,133,000, so that if the Fianna Fáil promises could be carried out, or anything like them, we would have that money in hands and would not have to tax the simple necessities of the poor. Of course, we would not have to tax these things either if there was the production that we have been told of.
Again, I put the question that I have put frequently. There are three standards to be applied in any argument that we have as to increased productivity in the country. Let us take the industrial side. If there are more factories being opened in this country, more industries being promoted, that ought to show in three separate ways, and it ought to show in all of the three separate ways. First, there ought to be more workers employed in industry and not in some ephemeral passing business; secondly, there ought to be a greater yield from the taxation imposed on the country, on the people who have incomes, and this ought to show if there is an increase in the incomes of those who are deriving their money from industry; and, thirdly, there ought to be a bigger production of goods. If there is a bigger production of goods in this country than ever before, why is it that at this time, when we can only get £18,000,000 from foreign purchasers for the goods that we send out, that we have still to send out £38,000,000 in order to buy in the stuffs that, apparently, are not being produced at home?
I remember that when what is called the adverse trade balance rose, on the visible side, by about £1,750,000, the reason given for it was that there was an increase on the importing side. It is a strange thing that when we have a huge adverse trade balance we should add to it to the extent of almost £2,000,000. If we have more factories in the country producing more goods, goods that we used to buy from outside countries, there is that fact that someone has got to face and answer: that last year, when the increase in prosperity had reached a point that made Ministers gleeful about what had been achieved, not about promises but about what had been achieved, we find that we are sending out of this country £38,000,000, and the most that we can get in is £18,000,000. When people have an adverse trade balance they generally try to limit their imports. Sometimes they try to do both: to increase exports and to decrease imports, but it is easier, although it may cause a little bit more hardship, to stop goods coming in than to insist on your goods being bought outside. So far from doing that, we are increasing our imports by nearly £2,000,000. That has got to be related to the statement that in this country there is a bigger production of goods than ever before, and that, apparently, there is side by side with this industrial development —according to Deputies like Deputy Corry who have been fooled into the belief that that is so—more wealth being produced even in agriculture.
That is one side of the story. Co-incident with that, and desperately ominous from the angle of the future of the country, is this other surprising fact: that the money that we had invested abroad is being eaten in on. It might be a good thing, if it could be done, to have the money of a country invested abroad brought home if it is going to be invested profitably at home. Anyone who pretends that there is a growing prosperity in the country, and that this growing prosperity has brought home money that formerly was invested abroad, must surely answer the question: in what is that money invested, and where are the returns from it? Is it shown in a bigger production of goods, or of wealth indicated by the tax on incomes, or by a greater number of people being put into employment in the country? If you have co-incident these two matters: that the moneys from which you used to draw dividends in order to bridge the gap between the visible item that indicated whether your trade was adverse or favourable, and if you have to draw on those moneys that you have brought home, you are simply depriving yourself of those dividends as part of what used to bridge the gap. Therefore, if you are not getting increased production at home, you are suffering in two ways. These facts show, despite all the talk to the contrary, that the country is suffering in both ways: that the money is being brought home and has not fructified at home, and that it is not being invested. At any rate, if it is invested, it is not showing any yield. The income tax yield is down. It is far less than ever before. The number of people employed bears no resemblance whatever to the amount of money that is being brought home, and there is no greater production of goods here. If more goods are being produced at home, if the adverse balance on a visible item is high and if the dividends that used to bridge the gap there are being diminished, why did we send out of the country last year £38,000,000 and could only get in £18,000,000?
The income tax is the second test. No matter what may have been said by people like the Parliamentary Secretary to the Minister for Finance before, income tax is the fairest and the most equitable tax that the human community has been able to devise. It falls upon people who make money. There are certain exemption limits which enable people to live, there is a certain sustentation point below which the tax does not operate, but it sweeps away a certain amount of what is above that. In the year 1928-29, we raked off every pound that was made above that particular level the sum of £3,700,000. In our time, 6d. in the £ brought in £500,000, so that if the tax had been 3/6 in our time, instead of 3/-, we would have got in £4,200,000. Last year, an income tax rate of 4/9 in the £ was effectively operated, and yet all that the Government could rake in was an amount equal to what we got on the 3/- rate. Where is the answer to that? You have certain people making incomes. You take off, above a certain limit, a certain amount in the £. If we take our 3/- rate, and add to it the notional 6d. in the £ that used to bring in £500,000, you get on every pound charged in that particular way the sum which the Government should have got last year from the 4/9. Why has not the extra ? brought in the extra amount? I am leaving new factories and new production out of the question altogether. Supposing that there was only the old level of income —let us take it that no new factory had been opened and, consequently, no occasion for a big dinner at which some Minister could display himself and talk about the development of the country —why should not that 4/9 rate bring in £1,250,000 extra? That is the sum that it would have brought in in our time. Add to that the fact, that we have apologists at the other side of the House telling us that there is greater productivity than ever before and that there is more wealth being produced.