asked the Minister for Transport and Power whether his decision to terminate the shipping investment grant scheme was preceded by consultation with the shipping interests involved; whether he is aware that 85 per cent of all traffic through Irish ports is controlled by foreign shipping interests; and whether the termination of the grant scheme will contribute to reserving this trend towards monopoly foreign control of shipping through this country's ports.
Ceisteanna—Questions. Oral Answers. - Shipping Investments Scheme.
21.
No specific prior consultations about the shipping investment grants scheme were held with shipping interests before the termination of the scheme. I was aware, however, from various discussions, of the views of shipping interests on the incentives and concessions which they considered necessary.
The grants scheme had been introduced in response to representations from Irish shipowners that they should be put in a comparable position with British shipowners, their main competitors, who were benefiting from a similar scheme. In the light of the withdrawal of the British scheme in 1970, and having regard to the many demands on the limited financial resources of the Exchequer, retention of the scheme was no longer justified. As far as private shipowners were concerned the scheme had been availed of only to an insignificant extent.
Due to the wide geographical disparity between the sources of our imports and the destinations of our exports the availability of adequate and efficient shipping services at reasonable freight rates is of the utmost importance in relation to this country's external trade. At the same time, the continuing imbalance between imports and exports, particularly in the continental trade where the ratio of imports to exports is over two to one, creates particular difficulties for shipping companies. Accordingly, it is Government policy to promote the greatest possible freedom in shipping and ships of any nation may operate freely to and from our ports, thus ensuring adequate and efficient services at the lowest possible freight rates. The ships of the Irish fleet likewise operate freely between foreign ports.
It is also Government policy to ensure Irish participation both in Irish and foreign-to foreign shipping trade and it is in pursuance of that policy that Irish Shipping Ltd. and the B & I have been established and are carried on.
Is the Minister aware that we must be the only European coastal State who do not give any financial assistance towards building and assisting shipowners to expand their fleets?
As the Deputy knows, there are fairly adequate shipping investment allowances to help shipowners.
22.
asked the Minister for Transport and Power whether any incentives now exist whereby Irish shipowners are assisted in the expansion of their fleets.
An Irish shipowner acquiring a new ship is eligible, for taxation purposes, for a shipping investment allowance equal to 40 per cent of the capital cost of the ship. This allowance is additional to the normal depreciation allowance so that, over the full life of the ship, allowances of 140 per cent of the ship's cost may be offset against profits. Alternatively, the shipowner is eligible for an initial allowance of 60 per cent in respect of the cost of a new or second-hand ship incurred before 1st April, 1973. In both cases unused allowances may be carried forward from year to year and set off against profits.
A shipowner is also entitled, in respect of a new ship brought into use before 1st April, 1973, to avail himself of free depreciation, whereby the total cost of the purchase may, for tax purposes, be written off in one year or spread over a number of years at the option of the shipowner.