The Framework of Home Rule Part 16

See "Report of Premiers' Conference held at Brisbane, May, 1907"

(Commonwealth Parliamentary Sessional Paper, No. 13, 1907), and for a clear statement of the whole subject, the "Year-Book (1911) of the Commonwealth of Australia." (The relevant clauses of the Const.i.tutional Act are Nos. 88 to 93.) The reasons for the failure of the system were summarized as follows:

"1. The trouble and expense which the necessary record entails.

"2. The practical impossibility of ensuring that in every case a consuming State will be duly credited with revenue collected on its behalf in a distributing State.

"3. The difficulty involved in equitably determining the amount to be debited to the several States in respect of general Commonwealth expenses.

"4. The uncertainty on the part of the State Governments as to the amount which will become available.

"5. The impossibility of securing independent State and Commonwealth finance."

See also pp. 295-299.

[106] See Proceedings of the Conference of Provincial Premiers, 1906, at Ottawa (Canadian Sessional Papers, vol. xl.), especially McBride's Memorandum for British Columbia. Numerous other grounds for special treatment were alleged--_e.g.,_ abnormal cost of civil government, due to vast extent of Province.

[107] Final Report, p. 24 (Census figures of 1891).

[108] Final Report, p. 122.

[109] Final Report, p. 50.

[110] Ibid., pp. 48, 49.

[111] Ibid., pp. 51-54.

[112] They were at issue here with Mr. Childers, who, in his Draft Report, proposed halving the rates on Irish railways and further endowing the Congested Districts Board. But Mr. Childers, though a Home Ruler, felt himself bound by the Terms of Reference not to suggest a Home Rule solution.

[113] Lord Welby (Final Report, p. 54) compared his proposal for Ireland with the system in the Isle of Man, where the proceeds of a tariff distinct from that of Great Britain were devoted in the first instance to the payment of a fixed Imperial contribution and the surplus to local needs. But in the Isle of Man the whole point was that the tariff was a local tariff, chosen by Manxmen to suit themselves, while the administration was under Manx control.

[114] Letter to the _Belfast Telegraph_, October 7, 1911.

CHAPTER XII

THE PRESENT FINANCIAL SITUATION

I.

ANGLO-IRISH FINANCE TO-DAY.

The finances of Ireland since the Union, when reviewed by the Royal Commission in 1894-1896, exhibited five princ.i.p.al features:

1. A declining population.

2. An estimated true taxable capacity falling as compared with that of Great Britain, and standing in 1893-94 at a maximum of 1 to 19.

3. A revenue stationary for thirty-four years, and showing in 1893-94 a ratio of 1 to 12 with that of Great Britain.

4. A growing local expenditure (though stationary for the last four years).

5. A dwindling net contribution to Imperial services (though stationary for the last four years).

If we review the subsequent seventeen years, we find:

1. A population still declining, though at a slower rate.

2. An estimated true taxable capacity still falling as compared with that of Great Britain, and now standing at a maximum of 1 to 24.[115]

That is, Ireland ought strictly to be paying no more than one-twenty-fifth of the United Kingdom revenue.

3. A revenue rising, but very slowly and inelastically as compared with that of Great Britain, and now showing a ratio of 1 to 15; so that the "over-taxation" of Ireland, as reckoned on the Royal Commission's principles, is still at least three millions.[116]

4. A local expenditure growing rapidly and disproportionately to Irish revenue; now just double the expenditure of 1893-94.

5. A net contribution to Imperial services automatically diminishing with the growth of Irish expenditure, disappearing altogether in 1909-10, and now converted into an adverse balance against Ireland of 1,312,500.

In Great Britain during the same seventeen years, population, taxable capacity, revenue, expenditure, and net contribution to Imperial services have all grown steadily, and, what is more important, in healthy proportions to one another.

On the next page will be found the comparative figures for Ireland and Great Britain of revenue, expenditure, and contribution for 1893-94 and 1910-11.

Let me remark at the outset _(a)_ that they and other official figures given in this chapter are taken from the annual Treasury returns alluded to at p. 242, "Revenue and Expenditure (England, Scotland, and Ireland)"

and "Imperial Revenue (Collection and Expenditure) (Great Britain and Ireland)." For the current year 1910-11 the official numbers of these Returns are 220 and 221, and the latter of the two is virtually a continuation of the original return, No. 313 of 1894; _(b)_ that the non-collection of a large part of the revenue of 1909-10, owing to the delay in pa.s.sing the Budget, makes the revenue figures of the last two years, regarded in isolation, misleading; those of the first year being abnormally low, those of the last abnormally high. I therefore give the mean figures of the two years. Expenditure is, of course, unaffected, _(c)_ That the Irish revenue shown as "true" is reduced by heavy deductions from the revenue as actually collected in Ireland. At p. 244 I explained that this adjustment can be regarded only as approximately correct, owing to the admittedly unreliable methods adopted by the Treasury, _(d)_ That the revenue shown includes non-tax as well as tax revenue.

Ireland. Great Britain.

1893-94. 1910-11. 1893-94. 1910-11.

Population 4,638,000 4,381,951 33,469,000 40,834,790 (estimated)

"Collected" revenue 9,650,649 11,704,500 88,728,428 156,574,250 (including non-tax (mean of two (mean of two revenue) years, 1910- years, 1910- 11, 1909-10) 11, 1909-10)

"True" revenue 7,568,649 10,032,000 89,286,978 155,137,250 (including (mean of two (mean of two non-tax revenue) years, 1910- years, 1910- 11, 1909-10) 11, 1909-10)

Local Expenditure 5,602,555 11,344,500 30,618,586 60,544,000

Contribution to 1,966,094 Nil[A] 58,668,392 94,593,250 Imperial Services

[A] Local Expenditure in excess of "true" revenue (as averaged for years, 1910-11, 1909-10): 1,312,500.

Irish expenditure has been rapidly overtaking Irish revenue during the last three years. In 1907-08 there was a balance available for Imperial services of 1,811,000; in 1908-09, of only 583,000; and in 1910-11, on the basis of a mean of that and the previous year, the deficit shown above of 1,312,500. The princ.i.p.al cause is the Old Age Pensions Vote, which began in 1908.

If all the elements of the problem be considered together, it will be seen that the fiscal partnership is as ill-matched as ever, and has produced results increasingly anomalous. Each of the partners and their united interests suffer. Ireland is still more heavily taxed relatively to Great Britain, yet Ireland's contribution to Imperial services has been converted into a minus quant.i.ty. Why? Because Irish expenditure, paid out of the common purse, has doubled, while Irish revenue has increased by less than a third.

Let me give the final survey of Anglo-Irish finance since the Union, in the tabular form shown by Professor Oldham at the meeting of the British a.s.sociation in September, 1911: