In 1885-6 Ireland contributed a surplus of considerably more than £2,000,000 to Imperial expenditure; in 1895-6, £2,000,000.[103] The Government estimates the true revenue of Ireland in 1912-13 at £10,839,000; and the expenditure on Irish services at £12,354,000. Therefore the new Irish Government will start with a deficit of £1,515,000. That deficit is now charged on the British taxpayer. It results from British management of Irish finance, for, on the one hand, Irish revenue is limited by the relatively limited means of Irish taxpayers; on the other hand, England has regulated Irish expenditure on the lavish scale of her own expenditure.
The Government lays down certain principles on which Home Rule finance will be based:
(1) Ireland must manage her own finance and [pg 142] must have powers of taxation consistent with leaving to the Imperial Government a field of taxation sufficiently wide for Imperial needs.
(2) The Budgets of the two countries must not hamper each other.
(3) Ireland must bear the cost of any increase arising hereafter on Irish services, but she must benefit by economies in those services.
(4) She must have power to reduce taxation if her economies permit it.
The scheme which will give effect to these principles may be described as follows.
In the first place the Imperial Government retains in its own hands the imposition and collection of all Irish taxes, the Post Office duties alone excepted, which will be transferred to the Irish Government. Normal increase in Irish Revenue will not be applied to Irish services. It will reduce the deficit. The Irish Government, however, will have supplementary powers of taxation.
An Irish Exchequer and an Irish Consolidated Fund will be created, and an Irish Auditor-General appointed. Further, a joint Exchequer Board, consisting of Treasury and Irish officers, will adjust the accounts between the two Exchequers, based upon what it declares to be the actual cost of Irish services when the Act comes into operation. If the Irish Government, using its supplementary powers of taxation, increases or reduces taxes, the Exchequer Board will vary accordingly the sum to be paid by the British to the Irish Exchequer on account of Irish expenditure, and it will determine the effect of any other changes taking place in the relations between the two Exchequers. Lastly, if and when normal increase of Irish revenue puts an end, during a period of [pg 143] three years, to the existing deficit, the Exchequer Board will make a report to that effect, and the financial arrangement between the two countries will then be reconsidered in order to secure a fair contribution from Ireland to Imperial expenditure.
The Government, as I have stated, estimates the revenue of 1912-13 at £10,839,000. That sum represents the whole “true” revenue of Ireland, viz., taxes and miscellaneous, £9,485,000; Post Office Revenue, £1,354,000. The Imperial Government adds to this revenue of £10,839,000 a free gift of £500,000 at the cost of the British taxpayer, in order to give the Irish Government a fair start. The total Irish income in the year 1912-13 will therefore be £11,339,000.