Committee Reports > List of Committees > Dáil > 1959 > Committee of Public Accounts > Report - Appropriation Accounts 1958 - 1959

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Dé Céadaoin, 18 Samhain, 1959.

Wednesday, 18th November, 1959.

The Committee sat at 11 a.m.

Liam Ó Cadhla (An tArd-Reachtaire Cuntas agus Ciste) and Mr. P. S. MacGuill (An Roinn Airgeadais) called and examined.

ELECTION OF CHAIRMAN.

3. Deputy S. Browne.—I have very great pleasure in proposing that Deputy Cosgrave be Chairman of the Committee.

Deputy O’Toole.—I would like to second that proposal.

Question put, and agreed to.

DEPUTY COSGRAVE took the chair.

4. Chairman.—I should like to thank the members of the Committee for the honour of electing me as Chairman and of giving me the opportunity of renewing acquaintance with a Committee with which I had some contact a number of years ago. As the members are aware, the functions of this Committee deal with the Appropriation Accounts before us, and, with the assistance of the Comptroller and Auditor General, who is kind enough to come and help us in our work, to inquire of the Accounting Officers how they spent the money which Dáil Éireann appropriated for their various Departments. Sometimes questions may be addressed to the Accounting Officer which should more properly be addressed to the Minister in the Dáil. The Accounting Officer is not responsible for policy. His duty is to reassure the Committee that the money which the Dáil has voted is spent in the way decided upon by the Dáil and in no other way. Any member of the Committee is entitled to ask each Accounting Officer any relevant question which he pleases to ask and, in the event of the Accounting Officer not having the exact information which the Deputy may require, the Deputy is free to ask the Accounting Officer to send a memorandum containing full information. However, although that is the right of any member of the Committee, it is not usually exercised except in matters of substance. Subject to what I have said, each Deputy is entitled to ask any question he likes. There is no restriction on him in that regard and his rights will be assured, I hope, by the Chair.

GENERAL REPORT.

Mr. T. K. Whitaker called and examined.

5. Chairman.—Paragraph 1 of the Report of the Comptroller and Auditor General is as follows:—

“Outturn of the Year (Adjusted to the nearest £)

1. The audited accounts are summarised on page xl. The amount to be surrendered as shown in the summary is £2,193,945 arrived at as follows:—

This represents 1.9 per cent. of the supply grants as compared with 3.1 per cent. in the previous year. The principal savings were:—

In no case has the provision made by Dáil Éireann been exceeded and no excess vote is, therefore, necessary.”

I note, Mr. Whitaker, that the surrender on this occasion is the lowest for a number of years—about 1.9 per cent., I think?—Yes. The average for all the years since 1946/47 was 5.1 per cent. So, there is a distinct reduction.

I take it that is due to closer estimation?—There is an element of good fortune in it too.

6. Chairman.—Paragraph 2 of the Report is as follows:—

“Exchequer Extra Receipts

2. Extra receipts payable to the Exchequer as recorded in the appropriation accounts amounted to £862,007.”

Have you any comment, Mr. Ó Cadhla?

Mr. Ó Cadhla.—The receipts were greater than the estimates by about £200,000. That was due to an unexpected receipt of £186,000 arising out of the termination of the flour subsidy. The matter is referred to in paragraph 76.

7. Chairman.—Paragraph 3 of the Report is as follows:—

“Surrender of Balances on 1957-58 Votes

3. The balances due to be surrendered out of votes for the public services for 1957-58 amounted to £3,612,869. I hereby certify that these balances have been duly surrendered.”

8. Chairman.—Paragraph 4 is as follows:—

“Stock and Store Accounts

4. The stock and store accounts of the Departments have been examined. The results are satisfactory, with some exceptions which are referred to in paragraphs relating to the votes of the Departments concerned.”

9. Chairman.—Paragraph 5 is as follows:—

“Foreign Exchange Account

5. The Foreign Exchange Account, established under the provisions of section 49 of the Finance Act, 1941, was required to be wound up not later than six months after the Supplies and Services (Temporary Provisions) Act, 1946, ceased to be in force. This Act expired on 31 December, 1957, and the Account was wound up on 30 June, 1958. The Account for the period from 1 April, 1958 to 30 June, 1958, has been examined and I certify that, in my opinion, the operations and transactions coming within the purview of such examination have been conducted and effected in accordance with the statutory provisions. Outstanding advances to the amount of £200,000 were repaid to the Exchequer and the surplus of £1,717,524 remaining in the Account was disposed of by transfer to the Savings Certificates Reserve Fund.”

Does the £1,700,000 represent a profit to the Minister for Finance?

Mr. Whitaker.—It represents mainly a profit—to the amount of £1,172,000— from the appreciation of the dollar assets in the Account owing to devaluation in 1949. But there is also a sum of £545,000, the remainder of the £1,700,000, which arises from dividends and interest earned on investments of the Account. I should add, Sir, that the final account, the winding-up account, will be presented to the Dáil in the course of the next few days.

10. Chairman.—Is the sum that remains at the moment invested at present?—The way the money has been distributed is this: the total amount that was advanced out of the Central Fund to this Account was £2,661,000 and all that has been repaid to the Central Fund. In addition, there was this surplus of £1,700,000 odd which has been paid into the Savings Certificates Reserve Fund under statutory authority.

11. Chairman: Paragraph 6 of the Report of the Comptroller and Auditor General is as follows:—

“National Development Fund (Winding up) Account

6. As indicated in paragraph 8 of the previous report the balance in the Winding up Account at 31 March, 1958, was £1,995,645, including £14,678 in the hands of agent Departments). Issues to agent Departments in the year amounted to £475,847, viz.:—

The statements appended to the accounts of the relevant votes indicate the expenditure incurred on the various projects during the year under review.”

Have any schemes yet to be completed under this fund?—Yes. I understand that the balance in the fund at the 31st March, 1959, which, as the Report notes was £1,521,995, is expected to be all required to meet outlay on commitments of the fund.

Deputy Jones.—Could I ask, would these be on the items which are listed on pages v, vi and vii or are there any other contemplated schemes which are not on this list?—On the items listed and one or two other commitments at 31st March, 1957. There will be no new commitments.

12. Deputy Moloney.—It says National Development Fund (Winding up) Account. Why is it winding up?—It is being wound up in accordance with the statute which gave this fund only a limited period of life—four years—which has expired.

Chairman.—I think this fund started in 1953?—It began then and provision was made in the Act for annual subventions to the fund for four years, not beyond that, and the fund was then to be wound up.

13. Deputy Moloney.—I take it that in the past, since the fund commenced to operate, generally speaking, it covered the Votes here referred to in page v of the Report, that is, that we are dealing during the current financial year with a number of items—Public Works and Buildings, Employment and Emergency Schemes, Agriculture, Local Government, Lands, Fisheries, Industry and Commerce, and Transport and Marine Services. Do I take it that the fund did not go outside the scope of these Votes since it commenced to operate or has it gone to other Departments as well?

Chairman.—Can you say, Mr. Whitaker, if the fund was confined to the Votes mentioned?—The statement given in paragraph 7 of the Report of the Comptroller and Auditor General shows the total expenditure up to 31st March, 1959 and that expenditure was, in fact, incurred only under the particular Votes listed on pages v, vi and vii.

14. Am I right in thinking that the total of £6,278,005 exceeds the amount of the fund? The fund was originally £5,000,000, I think?—It does not exceed it. I think the amount of the fund was some £7,000,000 or £8,000,000. I am not quite sure at the moment.

I see. There were supplementary provisions?—Yes—two of £3 million each but the allocations from the fund totalled £7,800,000.

15. Chairman.—Paragraph 7 of the Report of the Comptroller and Auditor General is as follows:—

“7. The expenditure on projects since the establishment of the Fund to 31 March 1959 was as follows:—

Expenditure on projects carried out by local authorities is examined by Local Government auditors whose certificates are made available to me. In the case of grants issued to the Inland Fisheries Trust, An Bord Iascaigh Mhara and An Óige, I have accepted their auditors’ certificates as evidence of the expenditure incurred therefrom.

The balance in the Winding up Account at 31 March 1959 was £1,521,995 (including £16,875 in the hands of agent Departments).”

16. Chairman.—Paragraph 8 of the Report is as follows:—

“8.—Statement of Receipts into and Issues out of The Central Fund for the Year Ended 31 March, 1959

VOTE 1—PRESIDENT’S ESTABLISHMENT.

Mr. T. K. Whitaker called.

No question.

VOTE 2—HOUSES OF THE OIREACHTAS.

Mr. T. K. Whitaker further examined.

17. Chairman.—On subhead J., I notice that the description of the subvention to the Restaurant has been changed to “Grant-in-Aid”. Is there any significance in that?—It reflects the arrangement made with the Joint Restaurant Committee and it means that we have now a regular sum which is issued irrespective of detailed vouching of the deficit on the restaurant.

VOTE 3—DEPARTMENT OF THE TAOISEACH.

Mr. T. K. Whitaker called.

No question.

VOTE 4—CENTRAL STATISTICS OFFICE.

Mr. T. K. Whitaker further examined.

18. Deputy Moloney.—On subheads E. and F., how many officers were sent abroad?—During the year two statisticians were sent abroad to get further training and experience. One of them went to the Canadian Bureau of Statistics and also to Washington. The other went to The Hague Institute of Social Studies.

19. I am not acquainted with this type of expenditure. I should like to know if the Central Statistics Office deals with all internal statistics or if outside agencies can be availed of by the office?—The main statistics which the Office produces appear in its regular publications. May I just give a list of those? The Irish Trade Journal and Statistical Bulletin, which is a quarterly publication; the Statistical Abstract, which comes out annually; the annual and monthly Trade Statistics; the Census of Industrial Production, which is normally produced annually; the Irish Statistical Survey, which is an annual production containing the figures for national income and expenditure. There are also statistics of wages and hours of work, of employment and unemployment, population and vital statistics, generally, and also now a Bulletin of Economic Statistics, issued just before the Budget. I did not quite follow the Deputy’s enquiry about the participation of outside bodies.

Deputy Moloney.—That is shown under subhead F., “Subscriptions to International Organisations”. I take it that is for the purpose of securing their co-operation?

Chairman.—I think the Deputy probably means: does the Central Statistics Office undertake enquiries for Bord Fáilte for instance?

20. Deputy Moloney.—No. What information does the Statistics Office get from abroad? Certain international statistics are quoted for purposes of comparison. Subhead E. shows a grant of £21,144 for special statistical enquiries with an expenditure of £13,473. I should like a general breakdown of that figure?—The main reasons for subhead E. expenditure on “special statistical enquiries” were the National Farm Survey and the Passenger Card Enquiry, which helps us to produce estimates of receipts from tourism. There is no special element in that subhead for payment for statistics from outside bodies. In fact, I think that most such statistics are obtained on an exchange basis without any payment.

21. Deputy Booth.—It is set out in greater detail in the Estimate under subhead E. The Deputy might get further information from the Estimate itself. I would be correct in saying that the compilation of statistical information generally is in relation to internal matters? The Statistics Office may, and almost certainly does, receive from abroad similar statistical information, but that is not generally published by the Statistics Office. That is available to anyone who wants it from the publishing authority abroad. I would presume, too, that a fair amount of work has to be done by the Statistics Office in furnishing internal statistics for outside organisations, European organisations, the United Nations and so forth?—That is true. The only thing I would add is that the Office does, in fact, use and publish certain comparative statistics derived from foreign publications. For instance, in a census of population publication it would be usual to show side by side with our death rates and birth rates the comparative figures for other countries.

Those comparative figures are already compiled by other organisations and it is only a matter of copying some information?—And making sure the same basis of estimation or calculation was used.

22. Deputy Moloney.—If it is in order, might I ask what is the general function of the farm survey? There are figures given here in the Appendix in the Estimate—kindly brought to my attention by Deputy Booth—in regard to a chief farm accounts officer in a temporary position? —The chief farm accounts officer and the farm surveyors were in charge of the National Farm Survey of which we had three years experience before the survey was discontinued. The Central Statistics Office discontinued the survey when they were satisfied they had enough data to fulfil most of the basic objectives, including the establishing of reliable estimates of various items of farm expenses, household consumption of farmers’ own produce, the different pattern of output and income in different size groups of farms and the geographic distribution of types of farming. Those were the chief purposes of the survey. The big survey has now been discontinued and replaced by a much smaller survey which is concerned with the production of farm management accounts for a limited number of representative farms. It is a much less expensive operation. The chief farm accounts officer has disappeared. He is not required any longer.

23. I understand, in regard to agricultural and live-stock production, that the members of the Garda Síochána collect statistics every year and, I take it, furnish them to the Central Statistics Office. I want to know if the compilation of those statistics by the Gardaí entails any expense which the Central Statistics Office is liable to refund to the Garda Vote or directly to some benevolent fund? Does it cost money and are the statistics in fact used? I do not know whether the latter question is proper or not, but I want to know are we paying for that type of job?—The expense that the Gardaí incur falls on the Garda Síochána Vote. The second part of the question was: what use is made of the statistics when they get to the Central Statistics Office? They are used for the compilation of the half-yearly censuses of live-stock. On the 1st June the main census dealing with crops and livestock is taken and a further one is taken on 1st January dealing with livestock only.

Chairman.—These are the only censuses of livestock taken?—Yes.

24. Deputy Moloney.—I have an observation to make. It may be out of place.

Chairman.—You can make the observation and we shall see.

Deputy Moloney.—If it is appropriate, I should like for a few moments to discuss the usefulness of these statistics. If it is not in order I am prepared to wait.

Chairman.—I am afraid it would be out of order, Deputy, because we are confined, as you probably know, to inquiries as to whether the money voted has been spent. But it is a matter that might be raised on the Estimate for the Central Statistics Office.

Deputy Moloney.—Thank you.

VOTE 6—OFFICE OF THE MINISTER FOR FINANCE.

Mr. T. K. Whitaker further examined.

25. Deputy Moloney.—Under subhead A.1. dealing with the Chief Medical Officer for the Civil Service there is a figure of £2,122 shown under grant and an expenditure of £2,132. Is this man a full-time officer?—Yes.

26. Deputy Moloney.—If I might make a comment, I think the salary scale for such a very onerous and important position is quite inadequate. I do not know if this Committee has any function in the matter. I should like to hear your comment on that.

27. Chairman.—Does the officer come within the Civil Service regulations?— Yes. The post is filled by open competition through the Civil Service Commission.

Chairman.—I am afraid then that putting Deputy Moloney’s comment on the record is as far as we can go.

Deputy Moloney.—I do not know this gentleman at all, but I do know that he has a rather important assignment. As far as I understand, he deals with the medical examinations and reports on entrants to the various branches of the Civil Service, particularly at the higher levels. Knowing the type of position and the independence he must maintain, I think he should be paid reasonably well. In another sphere, we had very definite views expressed on that aspect recently. If I can do no more than suggest, through you, to the Secretary of the Department of Finance that he might in his own way submit that item for examination to the Minister, I shall be quite satisfied. I am somewhat amazed at the scale of salary particularly when this gentleman is not allowed to engage in any other kind of practice.

Deputy Carty.—I suggest, Mr. Chairman, that this is not a matter for us. It has nothing to do with us and I do not think it is proper for this Committee to comment on salaries. Salaries have nothing to do with us here.

Chairman.—It is, perhaps, open to a Deputy to make a comment when moneys are voted.

VOTE 11—MANAGEMENT OF GOVERNMENT STOCKS.

Mr. T. K. Whitaker further examined.

28. Chairman.—I understand this Vote will disappear after this year?—It is proposed to bring it into the Finance Vote.

Deputy Carty.—I hope the stocks do not disappear.

VOTE 12—STATE LABORATORY.

Mr. T. K. Whitaker further examined.

29. Chairman.—Under subhead D., does the Laboratory undertake work for other Government Departments only?— Also for local authorities.

30. Deputy Jones.—Would Mr. Whitaker be able to tell us how many analyses have taken place?—I have not a note of the number of cases, but the type of case is where roadmaking materials, such as tars, bitumen and mixtures, are submitted for test by the Department of Local Government. I do not know how many such cases arose in this particular year.

31. Deputy Booth.—I think that this is a steadily decreasing figure. It used to be very much higher?—Following a review some years ago, the fee to be recovered was reduced considerably. It is now £150 a year.

VOTE 13—CIVIL SERVICE COMMISSION.

Mr. T. K. Whitaker further examined.

32. Deputy Moloney.—Arising out of subhead E., we are, I am sure, all quite happy that the receipts from these sources are substantial. Are the charges made on the different local authorities for services rendered measured in accordance with the post which is being filled by the Local Appointments Commissioners? Local Authorities get a very fine service and I am wondering if, in return for that service, we are getting in enough in appropriations in aid?

Chairman.—Can you say, Mr. Whitaker, how the local authorities are assessed?— The amount bears a relation to the cost of providing the service. If you would like to have a more detailed note, I shall be happy to send you one.*

33. Are the panels of examiners compiled from time to time and, if so, for how long would the same names remain on the panel?—I am afraid I would have to look into that matter too.* *

VOTE 14—AN CHOMHAIRLE EALAION.

Mr. T. K. Whitaker further examined.

34. Chairman.—Do they spend the full sum each year?—The full sum is issued each year and, as you probably know, An Chomhairle produces an annual report which contains information as to its activities during the year and the expenditure of the grant.

VOTE 15—COMMISSIONS AND SPECIAL INQUIRIES.

Mr. T. K. Whitaker further examined.

35. Chairman.—Under subhead D.2., this was a specific atomic energy inquiry? —Yes. It has been completed.

36. Under subhead E.2., is the Capital Investment Advisory Committee still in existence?—It is.

Considering further aspects of the matter?—At the moment they have not any particular matter under consideration, but they stand by to tackle any problem remitted to them by the Government.

37. Under subhead F., is the Committee on Income Taxation also in being?—Yes.

Deputy Moloney.—A most satisfactory committee.

38. Deputy Booth.—Under subhead H., last year we raised a point about commissions which appeared to have gone into a state of suspended animation. Particular reference was made to the Commission on the Metric System and Decimal Coinage. We have been assured in the House that this report is to be expected very shortly. Is that covered under this subhead? Was there a further expenditure on that particular commission during the year? Is there any news as to any result or any report?

Chairman.—The expenditure was, I think, £25?—The £25 was spent in 1958-59 on travelling and incidental expenses of the committee and, in reply to a Parliamentary Question earlier this month, the Minister for Industry and Commerce said that the preparation of the report has almost been completed.

39. Deputy Booth.—Would we be safe in assuming that there are no other commissions which have still to report and wind up their activities?—The full list of the committees is, in fact, given in the details of subhead H. on page 36.

Are they still active?—We have dealt with the Metric System and Decimal Coinage Committee. The next is the National Teachers’ Arbitration Board; that is a quasi-permanent body to deal with claims for salary increases. The same remark applies to the Secondary Teachers’ Arbitration Board. The Committee on the Glenamoy Grass Meal Project has reported and its proposals have been the subject of legislation. The Committee on Accommodation Needs of Constituent Colleges of National University of Ireland has reported. The Tribunal of Inquiry into Cross-Channel Freight Rates has also reported; so has the Seanad Electoral Law Commission. An Coimisiún um Athbheochan na Gaeilge is still in session.

40. Deputy Moloney.—May we go back to subhead B., covering the Savings Committee? I take it the £167 under travelling and incidental expenses covers the advertising activities of the committee also. It is a very small amount, but a good deal of work seemed to be done during the year under review?—It does not include anything for advertising. It merely covers travelling expenses. The advertising comes out of a different Vote altogether, the Vote for the Department of Posts and Telegraphs. In that, there is provision of £15,000 under subhead H.3. for savings publicity and that provision is spent mainly in accordance with the advice given by the Savings Committee.

VOTE 16—SUPERANNUATION AND RETIRED ALLOWANCES.

Mr. T. K. Whitaker further examined.

41. Deputy Moloney.—On subhead J.— Pensions to Resigned and Dismissed Royal Irish Constabulary, including Widows—I take it that “resigned and dismissed members of the Royal Irish Constabulary” means those members who resigned or were dismissed prior to the Truce. I just want to know whether or not we are making payments to any members who served after the Truce in 1921?—The Deputy’s assumption is correct. I may say that the grant of a pension to a member of the R.I.C. who resigned or was dismissed depends on a certificate given by the Minister for Justice and the Minister for Finance that the resignation or dismissal was by reason of the national sympathies of the individual concerned.

Chairman.—People who resigned.

Mr. Whitaker.—Or were asked by the First Dáil to resign.

VOTE 17—SECRET SERVICE.

Mr. T. K. Whitaker further examined.

42. Chairman.—I do not think there is anything on that Vote.

Deputy Moloney.—It is the most difficult Vote we have, Mr. Chairman. I do not want to find out who is getting the money but I want to find out how it is generally disbursed because I have a suspicion that it is open to looseness. It is very difficult, because of the way it is disbursed, to justify this expenditure at all. I should like to get a general idea of the manner in which it is disbursed and how much it is approximately?—I do not think it is proper for me to say any more than this: as Accounting Officer, I hold the account and I sign cheques on the account only on the requisition of two Ministers. Beyond that I cannot go.

Chairman.—That is the statutory position?—That is the position.

Once the Accounting Officer has certificates signed by two Ministers his functions are at an end?—My functions are at an end.

43. Deputy Moloney.—I am not suggesting that there is any looseness at this end but there can be looseness at the other end. I take it when the Accounting Officer sends it down the country, it reaches some member of the Garda Síochána, a detective officer or a sergeant, or some person above or below the rank of Superintendent, and the difficulty arises there.

Chairman.—I think the Deputy is mistaken. Any money issued out of the Secret Service fund is issued on the certificate of two Ministers. The Secretary of the Department issues it and his responsibility ends there.

Deputy Booth.—And our responsibility ceases with the payment out of the Vote on that requisition. We cannot inquire any further.

VOTE 18—EXPENSES UNDER THE ELECTORAL ACT AND THE JURIES ACT.

Mr. T. K. Whitaker called.

No question.

VOTE 19—SUPPLEMENTARY AGRICULTURAL GRANTS.

Mr. T. K. Whitaker further examined.

44. Chairman.—Can you say, Mr. Whitaker, if the saving on this subhead is due to fewer people being employed?—I think the main explanation was that the general level of rates was rather lower than was expected when the Estimate was prepared. The employment allowance was also less than was expected because there were fewer people employed.

45. Deputy Jones.—In regard to that, it would also be due to the fact that some claims were dealt with—I do not want to say in a harsh way—on the basis that the date is being very strictly interpreted now. There is a date in February, I think, which is being very strictly enforced now?—I have no information about that.

Deputy Moloney.—May I offer an observation. I agree that the point made by Deputy Jones is correct but there is worse than that. There is a lack of uniformity in enforcing the regulation or whatever it is that deals with this matter. I think the position is that the local authorities claim a refund from the Department of Finance through the usual channels and you may have some local authorities that will allow a claim for employment allowance to be made where the period of employment is not quite a year—where it is eleven months, which is a normal term of employment for agricultural workers as everyone who has any connection with the agricultural community will know. In the case of other local authorities, including my own in Kerry, if the period of employment is less than 12 months the allowance is not allowable. It is reduced, and you have to go to the trouble and the expense of getting a solicitor to lodge an appeal with the Minister for Local Government and take a chance on winning. I do not know if it is appropriate that we should comment on that but there should be uniformity in the application.

Chairman.—Can you say Mr. Whitaker, is the discretion left to the local authorities? Are the terms of the payments of grants strictly enforced?— I was trying to ascertain that while the Deputy was speaking but I would rather send a note about it.

Chairman.—Very well.

Deputy Moloney.—The local authorities blame the local authority auditors——

Chairman.—We shall be getting a note from Mr. Whitaker.*

VOTE 20—LAW CHARGES.

Mr. T. K. Whitaker further examined.

46. Chairman.—What is involved in subhead E.—Defence of Public Servants? —It is a provision to cover costs that may be awarded against a Garda Officer or somebody of that kind for taking action in the course of his duty which, in fact, is found to exceed his duty.

VOTE 21—MISCELLANEOUS EXPENSES.

Mr. T. K. Whitaker further examined.

47. Deputy Carty.—With regard to subhead E.—The Derrynane Trust, Limited (Grant-in-Aid)—is that a recurring figure or is the Trust about to be wound up?—This £310 is the balance of a State grant which is due under an arrangement made some years ago whereby the State undertook to contribute £4 towards the reconstruction of Derrynane Abbey for every £1 collected from private sources, subject to a maximum of £5,000. This represents the final payment to be made by the State under that arrangement and it is held up simply awaiting a certificate that the work has been completed.

VOTE 67—REMUNERATION.

Mr. T. K. Whitaker called.

No question.

VOTE 68—REPAYMENTS TO CONTINGENCY FUND.

Mr. T. K. Whitaker called.

No question.

The witness withdrew.

VOTE 7—OFFICE OF THE REVENUE COMMISSIONERS.

Mr. E. P. Haslam called and examined.

48. Chairman.—Paragraphs 9 to 14 of the Report of the Comptroller and Auditor General apply to this Vote. This, I think, is Mr. Haslam’s first appearance at the Committee as Chairman of the Revenue Commissioners. I know the Committee would like to welcome him and wish him every success in his appointment as Chairman.

Mr. Haslam.—Thank you very much, Mr. Chairman. It is very kind of you.

Chairman.—Paragraphs 9, 10 and 11 of the Report of the Comptroller and Auditor General read as follows:—

“Revenue Account

9. A test examination of the Revenue Account has been carried out with satisfactory results.

10. The net yield of revenue for the years 1957-58 and 1958-59, under its main heads, is shown in the following statement:—

£98,600,000 (including £1,788,000 in respect of Special Import Levy) was paid into the Exchequer during the year leaving a balance of £2,015,655 as compared with £2,327,452 at the end of the previous financial year.

11. Under section 62 of the Finance Act, 1958, Exchequer receipts in respect of Special Import Levy which were formerly payable into the Capital Fund established under section 4 of the Central Fund Act, 1956, ceased to be payable into that Fund, and, accordingly, no issues were made from the Central Fund to the Capital Fund in the year under review.”

I note that the receipts under income tax, sur-tax and super tax are down compared with the preceding year. What is the explanation?—I think the answer is that some of the reliefs given to industry on the enactment of the 1956-58 provisions are beginning to take effect now. They all cost money; for example, the increased wear and tear allowances and the initial allowances.

49. Chairman.—Paragraph 12 of the Report of the Comptroller and Auditor General reads as follows:—

“12. I have been furnished with the following statement of outstanding tax assessments:—

Comparative figures for the previous year are—Income Tax, £10,292,753; Sur-tax, etc., £2,772,596 and Corporation Profits Tax, £549,277.

I understand that the outstanding taxes include a considerable number of protective assessments and cases under appeal in which final liability had not been determined. I am informed that on the best information available the amount which will be found collectible out of the £12,876,307 outstanding will be unlikely to exceed £3,250,000. In most of the cases under appeal or enquiry collection cannot proceed until the final liability has been determined.”

Mr. Ó Cadhla, have you anything to add to that? Does that mean that a sum of over £9½ million could be written off?

Mr. Ó Cadhla.—Last year, it was requested by the Committee that more information should be given regarding the large outstanding balances so as to allay any public uneasiness which might arise. It was suggested that the estimates of the amounts which, in the opinion of the Revenue Commissioners, would prove to be collectible should accompany a statement of the outstanding taxes. As stated at the end of paragraph 12, the Revenue Commissioners did estimate that they would receive only about £3¼ million out of that £12 million.

Chairman.—I notice that this matter received considerable publicity lately in the press reports of the Appropriation Accounts.

50. Deputy Booth.—I raised this matter with Mr. Ó Cadhla last year. I still feel we might get an even better public reaction with a further amendment. I note that at the beginning of paragraph 12 there is an improvement in that the outstanding amount is shown as outstanding tax assessments whereas on previous occasions the impression was given from the information which was published that this was actual outstanding tax. I am rather disappointed that the Comptroller and Auditor General has phrased the remainder of the paragraph in such a way that he refers to the amount which would be found to be collectible as unlikely to exceed £3¼ million. I still feel that that gives a wrong impression to the public. It is very hard to get out of the public mind the wrong impression that £12 million really should be collected but that, unfortunately, the Revenue Commissioners can collect only £3¼ million, which is not the fact at all. I suggest that possibly the Comptroller and Auditor General might, on future occasions, see his way to rephrase that in some way to show that the amount which will eventually be found due will be, say, £3¼ million. The phrasing that only £3¼ million can be collected looks as if there is still some amount due but that somebody is not pressing too much. I know that is a wrong impression. I think we on this Committee see precisely the situation, or I hope we do. So much publicity is always given, every year, as soon as these reports are published that I feel no effort should be spared to get the wrong impression out of the public mind. Stress should be laid on the fact that protective assessments are very arbitrary. They do not represent the actual amount which will be found to be due, not the actual amount which will be capable of being collected.

Mr. Ó Cadhla.—The wording of the paragraph was agreed with the Revenue Commissioners. I agree that the term “protective assessment” might have been better defined.

Deputy Booth.—Yes, I think so.

51. Chairman.—What precisely is “protective assessment”. Is it capable of more precise definition?—It covers a great variety of circumstances. You have cases where people do not give us any information at all. We have to make protective assessments in complete ignorance of the situation. There are similar instances in the case of companies; then there are back duty cases and cases of death. Then take, for instance, double residents—people who come here and we see them only for a short time and we do not know anything about them. We have to protect the revenue all the time. Protective assessments must be made to protect the revenue. Very often the assessments are made without any information whatsoever. Naturally, they pile up into a big sum of money. Protection of the revenue is the key to the situation.

52. Deputy Booth.—Would I be correct in my recollection? I think Mr. Haslam’s predecessor pointed out previously that in some cases the only way in which a return could be forced out of someone was by putting in a protective assessment which was known to be grossly excessive but which would frighten the individual or company into furnishing a return more like a correct return. They are not only protective but inflated, to assessments, and purposely inflated, to produce a crisis in the hope that in the crisis a correct return will be made by the individual?—I would like to make it clear that we do not make grossly excessive assessments.

Deputy Booth.—I do not mean to infer that but at the same time they err on the higher side and for a very proper reason.

53. Deputy Moloney.—To say the least of it, I think it is disastrous that the newspapers carried the report to the effect that a lot of money was owing to the Revenue Commissioners. The ordinary man on the street never regarded the Revenue Commissioners as a body that would give credit. I think that was a good feeling that had gone abroad. Now the feeling is that there are people who must owe substantial sums if the amount outstanding comes to £12 million. I do not know if it is feasible from the point of view of accountancy for the Revenue Commissioners to segregate, as Deputy Booth indicated, the total of their warrants in this connection. I appreciate that they have to make protective assessments as otherwise they would find themselves out of a lot of money. I respectfully suggest that these protective assessments or any assessments which are not regarded as convertible into cash in the current financial year might be put into some sort of category that would give the Commissioners a claim on them. The present situation is unenviable. The people have the idea the £12 million is due to the Revenue Commissioners. You will have a lot of people trying not to pay at all. They will think it is the officials, Teachtaí Dála and Senators.

Deputy Carty.—Teachtaí Dála and Senators do not pay income tax on their allowances.

Deputy Moloney.—I assume the present figure is capable of being brought down to what is actually payable. I am sure the Revenue Commissioners can do that better than any suggestion I might be able to make. However, the publicity recently given has created a false impression among the people.

Chairman.—I think Mr. Haslam is conscious of that?—Yes. The real point of difficulty is the definition or description of “protective assessments.” That is where I think the key lies. A lot of that £12 million will be found not to be due and some will not be collected for one reason or another.

Chairman.—We can consider the matter again later.

54. Deputy Moloney.—The fact that this is outstanding is different from a statement of assets by a commercial concern or a limited liability company. I take it that the amount normally estimated as coming in from this source has, in fact, come into the Exchequer every year? I take it that we are in practice getting from income tax and the various other sources of tax approximately the amount estimated?—Yes.

Deputy Moloney.—That is what counts. It is, then, a sort of hidden asset which might come up some day.

Deputy Carty.—A crock of gold at the end of the rainbow.

55. Chairman.—Paragraph 13 of the Report of the Comptroller and Auditor General reads as follows:—

“Extra-statutory Repayments of Customs and Excise Duties.

13. Extra-statutory repayments of Customs duties and of Excise duties amounting to £23,167 and £5,460, respectively, were made during the year. The Customs duties include £247 in respect of Special Import Levy.”

What do the extra-statutory repayments consist of?—They are mostly in respect of diplomatic privilege. There are some items in respect of coal this year. There were some repayments in respect of coal. There is a duty of 3/- a ton on coal under the Trade Agreement with Great Britain. However, the British Coal Board was not able to supply the coal to this country. We have the authority of the Minister to remit the duty of 3/-a ton. In some cases that had been paid before the proper arrangements had been made and so we had to repay it.

Is that duty not suspended?—I do not think so.

56. Chairman.—Paragraph 14 of the Report of the Comptroller and Auditor General reads as follows:—

“Remissions and Amounts Irrecoverable

14. I have been furnished with schedules of the cases involving a loss of £50 or upwards in which claims for duty under the Revenue Acts were remitted without statutory authority or passed as irrecoverable during the year ended 31 March, 1959. I have made a test examination of the items included in the schedules with satisfactory results. The total amount, £172,344, remitted or passed as irrecoverable is made up as follows:—

The distribution according to the grounds of remission or write-off is:—

In cases where the responsible parties cannot be traced, are the claims revived if the party comes within the jurisdiction again?—That is in the case of income tax?

Yes. What is the position then?— “Passed as irrecoverable” means we have the right but do not seek to recover at the moment, because in the circumstances, we cannot do so. However it preserves the position. If the circumstances are such in the future that the duty can be collected, we collect it.

57. There is no statutory bar to the number of years you can go back over? There is no limit on the Revenue Commissioners in that matter?—In the matter of income tax? I think not.

58. Chairman.—We shall now turn to the Vote on page 11.

Deputy Moloney.—On subhead E.— Remuneration, etc., to Collectors and Assessors of Taxes, etc.—I take it that the expenditure of £98,370 covers the payment made to the several collectors of taxes throughout the State and that the terms and conditions of appointment of all these collectors in the service of the Revenue Commissioners are similar. I understand these collectors are appointed from year to year and that they get an inclusive salary which covers travelling expenses. I take it there is no other method of appointment than the one I have suggested?—That is so.

59. Deputy Moloney.—If that is so I should like to make an observation to the Revenue Commissioners. I do not know whether it is within the scope of this Committee or not. These collectors come up for appointment from year to year. Usually they are reappointed but they never know where they stand in that connection. Their services can be dispensed with at the end of a year or perhaps during the year if they are unsatisfactory. In practice that does not happen but there is a grave sense of insecurity attached to the position. They receive a flat amount which includes travelling expenses and the amount does not vary according to the district allocated to them. As regards tax assessments, it is my belief that too few people are obliged to pay and the vast majority are not asked to pay anything.

Chairman.—I think that is certainly outside the scope of the Committee. You may ask Mr. Haslam is that the procedure under which they are appointed but once he assures us that the collectors are appointed within the terms of the procedure laid down, our responsibility ends.

Deputy Moloney.—I may not make any suggestion to him in regard to the improvement of procedure?

Chairman.—No, that is a matter for the appropriate Estimate.

60. Deputy Carty.—Do I take it that officials of the Customs and Excise are rewarded if they detect smuggling?—There is a system of reward.

Deputy Carty.—Very interesting.

The witness withdrew.

The Committee adjourned.

* denotes projects in respect of which expenditure is also borne on the relative votes.

* See Appendix IV.

** See Appendix V.

* See Appendix VI.

* This covers Schedule E tax for Dublin General as from 1950-51. For earlier years the Schedule E tax for Dublin General is included in the figure in column (3).

† Break-down over the various years not available.