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recommended by
the N.I.E.C. could help in
achieving these desirable objectives. The Govern
ment hoped that all concerned would accept the
N.I.E.C.'s recommendations and co-operate
in
making them effective.
The council, composed of representatives of the
Government, the Federated Union of Employers
(a large body which with other employer bodies
formed the new Irish Employers' Confederation),
other employer organisations, State boards, and
the Confederation of Irish Industry, recognised
that the success of the policy would depend on
its being supported by the public at large.
"To be successful an incomes and prices policy
must have the support of all sections of the com
munity", the report said.
One proposal suggested that there should be a
pause of up to three months in a pay claim re
quiring detailed
investigation,
one of whose
functions would be to state the public interest.
While a case was being investigated, the workers
involved would be granted increases within the
terms of the guide-lines or national agreement.
Year's work
The 47-page report is the fruit of over a year's
work by the general purposes committee of the
N.I.E.C. It promises to be the most important and
influential of the 29 reports issued by the council
since 1964.
The report said that it was essential that there
should be full information available about per
sonal incomes, for example in the professional
and business fields, as was already the practice in
some countries. One step in this direction would
be to extend the present practice relative to the
disclosure of
the
aggregate
remuneration of
directors in public companies to the vital remuner
ation,
including
fringe
benefits,
of
the
top
management executives.
Dissatisfaction with the behaviour of profes
sional earnings, within the context of dissatis
faction with income distribution in general, existed
in part because of a belief that it was easier for
this category of income to evade taxation. Tax
evasion was not, of course, limited to professional
earnings. While, ideally, it was hoped that more
and more citizens would come to regard payment
of their full tax as a moral obligation, the N.I.E.C.
felt that the effectiveness of measures to end
evasion depended on applying penalties commen
surate with the seriousness of the offence.
All wage and salary earners were now effectively
subject to pay-as-you-earn, but gains and profits
arising from farming, whatever their size or nature
and even if associated with other income, were
exempted from income tax. There was a feeling
that tax was avoided or too easily evaded on
incomes arising from self-employment in other
sectors.
Tax structure
The N.I.E.C. believed that the question of the
whole tax structure and its incidence on different
categories would have to be studied in depth.
An important section of the report was devoted
to farmers' incomes. It said that where the transfer
of purchasing power to the agricultural sector was
effected through price increases, whether increases
in the market prices or in administered prices, it
could be achieved only if it was accepted by the
non-agricultural sector, and not used to support
demands for higher incomes; if it was not so
accepted, the higher food prices might be used to
support demands for wage and price increases
outside agriculture.
Wage and price increases in such circumstances
would raise farmers' costs, so that the attempted
transfer to agriculture was ineffectual and resulted
in further demands from the agricultural sector
for an increase in guaranteed prices and add in
a new twist in the wage and price spiral.
Consequently, a decision covering the current
level of support for farmers' incomes would re
quire to be taken at the same time as — and be
recognised as an integral part of — decisions con
cerning developments in non-agricultural money
incomes. These decisions would have to be made
with respect to farmers' incomes on the average
rather
than
in
the aggregate since, with
the
development of the economy, the numbers engaged
in agriculture would fall.
Farmers' exemption
When these decisions were being made, due
weight would have to be placed on the fact that
increases in farmers' income—whatever their size
to start with—were now statutorily exempt from
income tax. Since there were no representatives
of the agricultural sector on
the council,
the
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