I move amendment No. 1:—
In page 2, Section 1, line 13, to delete "three years" and substitute "one year".
I am bringing in this amendment in fulfilment of the undertaking I gave on the Committee Stage. The effect of it is clear.
Finance (Profits of Certain Mines) (Temporary Relief from Taxation) Bill, 1955—Report and Final Stage.
Amendment agreed to.
I move amendment No. 2:—
In page 3, Section 2, line 13, to delete "three" and substitute "five".
This is for the same reason.
Amendment agreed to.
Question—"That the Bill, as amended, be received for final consideration"—put, and agreed to.
Question proposed: "That the Bill do now pass."
I think I should tell the House in respect of one amendment suggested last week, I agreed I would consider the matter without binding myself. The amendment suggested by Deputy Lemass in effect was that the relief provided by the Bill would operate from the date upon which the mines had re-commenced work after stoppage. I did examine the question and I came to the conclusion that it would be both impracticable and inequitable to deal with the matter on that basis. It seemed to me that it was utterly impossible to differentiate between what was a temporary cessation and a permanent discontinuance, that in this type of mining there were frequently, all over the world and not merely here, cessations for the purpose of getting new machinery, waiting until mineral prices varied or, perhaps, in some cases due to exceptional flooding and that it would be almost, if not absolutely impossible, to differentiate between what was a temporary cessation and a permanent discontinuance. Therefore, that would be the position in respect of existing mines.
I also felt myself bound to realise what would be the position in the future in respect of new mining operations. Quite frankly, it was that which finally clinched my mind against the amendment. If I allowed such an amendment in respect of existing mining operations I would equally have to allow it in respect of new mining operations. That would, I think, bring us into a situation that would be almost chaotic—if, in respect of the future, we were to try to differentiate between a temporary cessation and a permanent discontinuance. It would result in producing the very thing we want to avoid, namely, an incentive, so to speak, to stop and start again. The second point absolutely clinched my mind that it would not be practicable in circumstances to operate on the lines that the Deputy suggested.
Mr. Lemass:
Might I suggest that the argument which clinched the mind of the Minister has no relation to the question at all? The Government announced their intention to bring in a Bill to give certain relief from taxation to new mining ventures. Apparently, at a subsequent stage they decided that the relief should also be given to existing mining undertakings. The mine to which I referred had ceased to operate because it could not sell its products and then, when market conditions improved or new outlets for the products arose, went back into operation. The Minister said an existing mine can benefit from this tax relief for a period of eight years from the date on which it commenced. If it was eight years in existence, it got no relief. If it was seven years in existence it got one year's relief at 50 per cent. The only question that arose here is the date of the commencement of the calculation of that period and I suggest it is common sense to start the calculation of that eight year period from the date on which the mine came into its present operations. There is one case which I mentioned. There may be others. The mine concerned came into existence ten years ago. It produced all during the war and for some years after the war and then went out of business because it was unable to sell its products, unable to make a profit from its operations. It was out of business for two years. It was not because of flooding or because of waiting for machinery; it was for no other reason than that it could not keep in business. If a new company had been formed to operate it would qualify under this Bill.
No, it would not. We are not dealing with companies. It is the act of operation that governs, not the ownership of the operation.
Mr. Lemass:
An existing mining operation is an operation that was carried on at any time during the past year. Is that right? The company I mentioned—there may be others— resumed operations in 1954, after the mine had been closed down for two years, and I suggest that in that case the commencement of operations was the date it started again in 1954, not 1942 or 1941 when it first started operations.
May I say that, in that case, I know it is a completely different operation? The original working arose out of wartime conditions. It was a product which was required in war by the people then buying and not required when the war was over. The company then found a new market of a different kind for that production and it is now operating. I suggest it is quite unfair to that company to say to them: "Just because you originally commenced ten years ago, even though you re-commenced in 1954, you can never get any concession under this Bill." The Minister could do it; as far as I know, it is not likely to cost him anything. They are not likely to make profits that would solve any Budget problems. The Minister should look at that again.
I want to state my view that experiments in discriminatory taxation are terribly dangerous, and when the Dáil does approve of discriminatory taxation relief, it should be particularly careful to ensure that it is done in an equitable way. It is not equitable to give concessions to some companies and not to give them to others, where the circumstances, we know, are almost precisely the same. I think it is most unfair. If that is going to be the precedent on which the tax weapon will be used as an economic incentive in future, it is just as well that it would not be used at all, and some other method should be adopted for dealing with such cases.
However, I have tried to persuade the Minister that, apart altogether from the desirability of doing this, if there is any serious intention of using this Bill as an incentive to get people interested in mining operations, it should be done as a mere matter of justice, as an attempt to get nearer the stage at which all taxpayers are treated alike under the law.
Does the Deputy make his case on the basis that the discontinuance, so to speak, was in fact really permanent?
Mr. Lemass:
At the time the company closed down, so far as I know, they did not expect to be able to reopen.
I think the Deputy is under two misapprehensions. First of all, he was under a misapprehension when he said a minute ago that, if another company had done this, if they had passed on to another company, the new company would get the relief. This Bill does not deal with ownership as such. It is the physical operation that is the test in each case and ownership does not vary it at all. The real difficulty the Deputy is in, as I understand his case, is that he is trying to get for temporary cessations——
Mr. Lemass:
May I interrupt the Minister? I proposed that where the mine had ceased to be worked for three months, the date of commencement should be the date of resumption. I am prepared to make that a year. I was concerned to eliminate any possibility of giving the relief where it was not intended. The mine might be closed down merely because of some temporary factor, a machine being out of order. If the mine was not operated for a year, then it must be assumed that it had ceased to operate.
Did the Deputy state in fact that it was not working for two years?
Mr. Lemass:
It was out of operation for two years.
The Deputy's amendment was entirely framed on the basis of temporary cessation. You could not possibly operate any Bill like this on temporary cessation. If it is permanent cessation, then I think the Deputy, if he examines the Bill again, will find that permanent cessation is covered.
Mr. Lemass:
I was quite prepared to give the Minister an assurance on that point. I was not quite clear as to the interpretation that would be put on the Bill if his intention was that where working ceased on any mineral deposit and then was resumed because of new circumstances which had arisen after a lapse of time, the date of resumption should be the date of commencement.
As I understand, the Deputy now is making the case on permanent discontinuance.
Mr. Lemass:
Permanent discontinuance.
The Deputy's amendment was framed on what I call temporary cessation. We will leave that aside. If discontinuance was really permanent, then it is covered.
Mr. Lemass:
I do not know what the Minister means by permanent cessation. The board met and said: "We cannot go on. We will stop." They stopped, and paid off their staff and shut down the works. They probably had a man and a pump to ensure that it was not flooded.
In the ultimate result, it will not be what I think, or what the Revenue Commissioners think. It will be what the Circuit Court judge feels. That, in my view, was the fairest way of leaving the determination.
Mr. Lemass:
Does the Minister agree that, if the workings ceased permanently at the time they ceased, at least those responsible for them at that time just decided to go out of business and, then because of changed circumstances, decided to come back into business, after a considerable lapse of time, that date of resumption should be the commencing date?
If it is a temporary cessation, I think it should not count. If it is a permanent discontinuance, then I think it is fair that it should be taken into account.
Mr. Lemass:
Will the Minister agree to look at the Bill and make sure that that purpose is achieved?
I cannot do more than try to carry into words what is in my own mind. That is what I am trying to carry into words.
Mr. Lemass:
Yes, but are the words in the Bill? I do not want to hold up the Bill. I am not clear that, if the Bill has to be amended, it has not to be amended here. I doubt if the Minister, if he found the words in the Bill were not as clear, could amend it in that respect in the Seanad.
We feel the Bill covers the case of permanent discontinuance. We intended it so to cover and we feel that it does.
Mr. Lemass:
Was Silvermines permanently discontinued?
No, it was not.
The Deputy is looking a gift horse in the mouth.
Question put and agreed to.
This Bill is certified as a Money Bill in accordance with Article 22 of the Constitution.