Dáil Éireann debate -
Wednesday, 12 Jun 1968

Vol. 235 No. 7

Supplementary Estimate, 1968-69. - Vote 6—Office of the Minister for Finance.

Mr. Haughey

I move:

That a supplementary sum not exceeding £10,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1969, for the Salaries and Expenses of the Office of the Minister for Finance, including the Paymaster-General's Office, and for payment of certain Grants-in-Aid.

I want to say a few words on this Supplementary Estimate. The purpose of the Supplementary Estimate is to seek the approval of the Dáil for the expenses of a Board which I am setting up to facilitate the changeover to decimal currency. As I said in my Budget speech the changeover will commence on 15th February, 1971 and it is desirable to put the necessary preparatory work in hands now.

The Board will be responsible for working out and supervising the detailed arrangements for effecting the changeover. Its task will be to encourage firms and organisations to make arrangements well in advance for such matters as the training of staff, the conversion of £ s d machines and the re-organisation of internal accounting systems. It will consult with and advise retail organisations and other cash-handling bodies on how best to overcome any difficulties that may arise during the transition period when both the old and the new currency will be in circulation. The Board will also be responsible for devising and directing a comprehensive publicity compaign to prepare the public for the change. To ensure satisfactory planning of the machine conversion programme, which is probably the biggest problem of the changeover, the Board will have to keep in close touch with the machine companies.

I invited some of the bodies mainly concerned with the changeover to suggest the names of suitable persons from amongst whom I might select members of the Board. I am now in a position to anounce the appointment of the following persons to the Board:

Mr. S.F. Murray, Assistant Secretary of the Department of Finance.

Mr. M.D. Corbett, Financial Director of P.J. Carroll & Co. Ltd.

Mr. E. Graham, Assistant Secretary, Central Bank.

Mr. Eoin McCarthy, Assistant General Manager, Córas Iompair Éireann.

Mr. P.E. O'Brien, President, Federation of Trade Associations.

Mr. H. O'Sullivan, General Secretary, Irish Local Government Officials Union.

Mr. D.F. Shanley, Director of Planning, Bank of Ireland Group.

Mr. C. E. Sowman, Secretary, Royal Bank of Ireland Ltd.

Mr. G.L.M. Wheeler, Chartered Accountant.

Mr. S.F. Murray will act as chairman and the secretariat for the Board will be provided by the Department of Finance.

The Government have decided that the denominations of the coins for the new system will be 10 new pence and 5 new pence instead of the present florin and shilling, 2 new pence, 1 new penny and the half new penny worth 1.2d. The designs for the new coins will be drawn as far as possible from the designs on the existing coins. Legislation will be required to provide for the issue of the new coinage and to cover the conversion of £ s d amounts in statutes and other legal documents. I shall introduce the Bill in the Dáil as soon as the necessary provisions can be settled.

No special compensation will be paid in respect of the costs of conversion or replacement of business machines. As I indicated in my Budget Statement, these costs will be offset to a large extent by tax reliefs. In view of the benefits to be gained from decimalisation, it is only reasonable to expect machine users to meet some of the costs themselves.

There are no grounds for suggestions in recent press reports that there have been unnecessary delays in reaching a decision on the choice of a decimal system for this country and in making preparations for the change. The Working Party on Decimal Currency which reported in 1964 recommended the adoption of the ten shilling system. At that stage the British Government had not made any decision on the system to be adopted there. When it became clear at the end of 1966 that the British Government intended to adopt the £, new penny, half system it was necessary for the Government here to reassess the position. It was decided to give a final opportunity to representative organisations and the public at large to make known their views. This was done with all possible speed and there was no unnecessary delay subsequently in deciding on the system to be adopted.

I am satisfied that there need be no concern about the adequacy of the time available to make the arrangements for the introduction of the new currency. The Decimal Currency Board will have almost three years in which to prepare for the changeover, the same time as was available to the Australian Board. In fact the Working Party on Decimal Currency recommended that a preparatory period of two years would be sufficient here. Given the cooperation of all involved, there is plenty of time in which to get ready for the change.

I am also establishing an interdepartmental committee to co-ordinate the arrangements for the changeover within the Civil Service.

Mr. Cosgrave

As distinct from the decision to adopt the same system as the British which, I think, is generally recognised as one which does not leave us a good deal of objection, has the Minister or his advisers considered problems involved in it? I understand that the present decision means that in respect of taxes such as the turnover tax or the wholesale tax, percentage and such problems will arise. Will these fall to be considered by the advisory committee? Are this Committee solely concerned with the mechanical and technical problems of putting into practice the decision to operate the decimal system? The Minister referred to the Australian decision. A very considerable amount of research and discussion was undertaken there. Most of us know that recently the Chairman of that Committee visited here and had some discussions. I think it was generally recognised that the particular work which the Australians did was of a very high quality.

There is some concern, and it has been expressed to me, that the practical difficulties of operating the wholesale tax and the turnover tax on the basis of denominations will present certain difficulties. While it is recognised that if the British adopt particular units, our very close day-to-day trading arrangements and the inter-changeability of the currency make it difficult to consider any alternative, at the same time, trade and business and commercial undertakings generally would like to be satisfied that every aspect of the matter will be fully and adequately considered by this Committee before final decisions are taken in respect of the actual system put into operation.

Mr. Haughey

I think I can give that assurance. We are fortunate in this country in that we are doing this——

Mr. Sweetman

Is the Minister concluding on decimal currency? If he is, I want to say a word on it. One thing the Minister said was not absolutely clear. Possibly I did not hear him correctly. He said that part of the cost of the changeover to the new machines would be met by taxation allowances. My understanding of the Budget decision as announced is that the whole cost of changeover would be proper deduction for income tax and corporation profits tax, and that therefore it would be correct to say that the expense to the machine user of the changeover is the expense after full deduction of allowances against both corporation profits tax and income tax. In the phraseology I heard the Minister use a minute ago, it could be taken that only part of the cost was an allowance for taxation purposes and I do not think that is what the Minister meant and it is better to get it quite clear.

Secondly, am I correct in thinking that the effect of the changeover will be that after changeover, there will be two types of coins and notes running side by side for a considerable period in ordinary everyday life, that every time an old coin or note comes back into a bank, it will be taken up? I was a few minutes late and if the Minister dealt with this at the beginning of his statement, he will have to excuse me. Is it clear that every time the present issue—shall I call it that—comes into a bank, the bank will exchange it, or is it proposed that the Central Bank will issue only a fixed amount of the new money each year and that fixed amount will be used to take out of circulation the existing currency, or, once the changeover date is arrived at, is it the intention to do everything possible to withdraw from circulation existing coins and existing notes at the very earliest possible opportunity?

Apart from that, I think it desirable that there should be a categorical assurance from the Minister, as I am certain is the case, that this changeover and the adoption of the new money— shall I call it that—does not in any way affect the right of any holder of existing legal tender at any time to get that legal tender converted by the Central Bank. It would be unthinkable that there would be any other decision but some people are pretty stupid and it would be as well that people who are apprehensive in that way should have their apprehensions completely allayed by a categorical statement from the Minister.

Finally, may I ask is it proposed to issue specimen sets or gift or token sets—whatever the word is—of the new coins immediately on the day of issue in the same way as people collect stamps on the first day of issue? I feel that would be something that would meet with an appreciative and ready sale. People would like to obtain them, and the process would be something worthwhile as a means of acclimatising people to the changeover.

Mr. Haughey

As I said, I think we are in a way fortunate that we are coming to do this after other countries have successfully accomplished it and we can call on their experience to the fullest extent. Indeed, we have already been doing that and have studied all aspects of the changeover in the other countries which have recently made the change. Our people who went to these countries received the fullest possible co-operation and we are assured that all the benefits of their experience will be at our disposal. This I think is enormously important from our point of view, very reassuring and very encouraging. A distinguished visitor from Australia who was with us recently was very helpful and very reassuring on all these points.

In the main, this Board will be responsible for technical matters, publicity and so on, and questions of principle will still be the responsibility of the Government. I am thinking of matters like price control, the avoidance of overcharging, matters affecting taxation and so on. These will still be the responsibility of the Government to decide. Of course, the advice of the Board will be available. However, in the main, the Board will be responsible for the machinery of the changeover.

With regard to the cost, the question raised by Deputy Sweetman is a valid one. Perhaps I should explain that when I used the phraseology I did, which was to the effect that these costs will be offset to a large extent by tax reliefs, what I meant was that the full cost to the people concerned cannot be recouped simply by tax reliefs. Perhaps I should repeat what I said in the Budget Statement:

The cost of converting machines to the decimal system will be offset, to a large extent, by tax relief. Expenditure on adapting existing machines will be deductible as an expense in computing profits for tax purposes. Expenditure on the purchases of new machines or on major adaptations of existing machines will be eligible for capital allowances. Outside the western areas, there will be an initial allowance of 60 per cent of the expenditure and annual wear-and-tear allowances on the usual basis. In the west, free depreciation will be allowable under the provisions introduced last year.

Mr. Sweetman

That is the Budget Statement, is it not? My criticism was not of that but of what the Minister said a few minutes ago.

Mr. Haughey

I understand, but when I used the words "partly offset", I just meant that tax relief cannot recoup the full cost.

The idea will be of course that the coinage to be superseded will be in fact withdrawn as quickly as possible. Nobody need have any great apprehensions on this score. In some of the countries, I think the period allowed after the changeover was two years. New Zealand actually allowed one year but again these are all matters which will be decided upon and arranged to the best possible advantage by this Board when it gets into operation.

Vote put and agreed to.