Dáil Éireann debate -
Thursday, 7 Feb 1974

Vol. 270 No. 2

Exchequer and Local Financial Years Bill, 1973: Second Stage.

Minister for Finance (Mr. R. Ryan)

I move: "That the Bill be now read a Second Time."

The purpose of the Bill is to change to a calendar year basis the Exchequer financial year and the local financial year, both of which years end on 31st March under existing legislation. The Bill provides that 1975 will be the first calender financial year and the 9-months' period from 1st April, 1974, to 31st December, 1974, will be a transitional financial period for both Exchequer and local authority purposes.

As I mentioned in the course of my budget speech on 16th May last, the Government have also decided in principle on a similar change in the case of the income tax year. That change is not, however, being provided for in the present Bill as it will require more lengthy preparations, but it will follow the other two changes as soon as possible. Accordingly, for the present the income tax year will continue to end on 5th April each year.

The proposed switch of the Exchequer and local years will be in our best interests in the context of EEC membership. The calendar year is the financial year of the six original member States, and a switch by this country will facilitate the co-ordination of economic and budgetary policies which is a declared aim of the Community and is an essential aspect of the move towards economic and monetary union. Apart from the EEC aspects, the changeover will facilitate our own budgetary preparations because much of the economic statistics and forecasts of trends which are taken into account in settling budgetary policies is already on a calendar year basis.

As regard the local financial year, the proposal to change it in conjunction with the change of Exchequer year reflects the inter-relationship of local and central finances in this country. Over half of the moneys spent by local authorities and health boards is derived from State grants and the proportion may be expected to increase. It is the Government's policy to relieve the rates of liability in respect of health charges and local authority housing and the first instalment of easement towards this end was provided for by the Exchequer in the present financial year 1973-74. The close connection between central and local finances obviously makes it desirable that the local financial year should continue to be the same as the Exchequer year.

Having indicated the basic reasons for the changes proposed. I would like to refer to the direct effects of the switch. It is intended that the new calendar financial year will commence to operate from 1st January, 1975. This will mean that special arrangements will need to be made to cover the nine-months' period from the close of the present financial year on 31st March next to 31st December, 1974. It is the intention to constitute this nine-months' period into a separate financial period with its own budget and accounts. It is envisaged that the budget for this nine-months' period will be introduced into the House at about the same time of the year as budgets in the past and, similarly, the Estimates for the public services framed on a nine-months' basis will be presented to the House shortly before the budget as usual. Also in the transitional period local authorities will strike a rate based on nine months' requirements as a necessary step towards adoption of a calendar year basis from 1975 onwards.

Government Departments and local authorities will, as from 1st January, 1975, revert to 12 months accounting but will prepare their estimates of expenditure and receipts, strike the rates, in the case of local authorities, and keep their accounts on a calendar year basis.

Deputies will, no doubt, have a special interest in the implications of the proposed changeover for the timing of parliamentary business. No change will be necessary in 1974 except that all Estimates for the public services covering the nine months' period to 31st December, 1974, will need to be passed by the House before the end of December. It will not be possible to postpone debate on Estimates until after Christmas as in recent years, as the financial period to which they relate will have closed. As regards the period beginning on 1st January, 1975, the change of Exchequer year will necessitate revised timing for the presentation of the annual Estimates volume, the presentation of the budget, the consideration of Estimates in the House, and the taking of the annual Finance and Appropriation Bills. Following the enactment of this Bill, I propose to arrange to have these aspects of the change of financial year referred to the Committee on Procedure and Privileges for consideration.

As regards the budget, it has been the normal practice for the Minister for Finance to present his financial statement within the first two months of the opening of the financial year. If this pattern were continued, the budget would be introduced in January or February each year from 1975 onwards. Where there were Financial Resolutions involved it would be necessary to have the Finance Bill enacted within four months of budget day. This should not cause any difficulty despite the usual recess of the House at Easter. The original six members of the EEC present their budgets to their parliaments in the autumn prior to the opening of the year to which they relate. The merit in our circumstances of adopting this practice will be explored, but it may be assumed, I think, that any such further change in our financial timetable would be unlikely in the immediate future.

As regards the Estimates volume, Deputies may recall that last year's report of the Informal Committee on Dáil Procedure anticipated the likelihood of a change of financial year and recommended a change in Standing Order No. 121 designed to facilitate alteration of the timing of circulation of the Estimates volume. If their recommendation were adopted, the latest date for the presentation of the volume to the House would be altered from 30th April to the 30th day of the financial year.

Since the Bill is accompanied by an explanatory memorandum I think it will suffice if I limit my description of its provisions to the general features. The principal sections are sections 2 and 3. These sections adapt all references to financial year and local financial year contained in statutes and statutory instruments so that, as from the 1st January, 1975, they shall be taken to be references to periods coinciding with the calendar year. The definition of the expressions "financial year" and "local financial year" contained in the Interpretation Acts will cease to have effect as from the same date. The transitional nine-month period beginning on 1st April, 1974 and ending on 31st December, 1974, is provided for in section 4 of the Bill. Section 5 provides for the making of ministerial orders to effect such adaptations of provisions in various statutes and statutory instruments as may be necessary as a consequence of the change of the Exchequer and local years. The orders will cover such matters as the adjustment of amounts or financial limits arising out of the transitional nine-month period and the modification of dates or periods for the preparation or submission of accounts, estimates or demands. It will also be necessary to provide for revised procedures for the striking of local rates. Section 6 provides that an order under the Bill may contain such consequential, supplementary and transitional provisions as the Minister making the order thinks fit. Section 7 provides for the publication of such orders in Irish Oifigiúil. Section 8 contains two savers. The first declares that nothing in the Bill is to be taken as enabling the rates of any tax to be altered or a new tax to be introduced. The second provides for the validation of any action that had to be taken by an official person or body before and in anticipation of the coming into force of any provision of the Bill or of the making of an order under section 5. It is provided that such actions will have the same validity as they would have had if the relevant provision had been in force at the time of the action.

I commend the Bill to the House for a Second Reading.

Mr. Colley

For the reasons indicated by the Minister in the earlier part of his speech, the previous Government had decided in principle on making this change and had arranged for consideration of the implications involved under the various headings, which clearly are widespread and complex. That examination had not been completed when we left office, but the Minister may take it on that basis that, as far as this side of the House is concerned, we are certainly in agreement in principle with this Bill, as I said, for the reasons outlined by him, that is, that, first, there are advantages to us in an EEC context in making the change, and, secondly, that many of the financial statistics with which we work are compiled on a calendar year basis.

There are, however, a number of matters on which we would like to get clarification from the Minister, and, perhaps, before I deal with those matters I might mention one or two points which are directly concerned with the text of the Bill and with which the Minister might deal when replying so that we can consider the position in relation to the next Stage. It is a matter of drafting. Perhaps it is perfectly in order, but to me it seems rather strange. It appears in a few places in the Bill but I would refer the Minister to section 2 (2), lines 34 and 35 where it says:

the reference shall, in relation to after the 31st day of December, 1974,

That form of drafting appears in a number of places in the Bill. I do not know whether it seems odd to the Minister but it does to me, to word it in that way: "in relation to after". It seems to me that it should contain something like "in relation to any period commencing after", or some such words. It is purely a question of English I am talking about now.

Mr. R. Ryan

It is a pity we have not got a text in Gaeilge and we could refer to it.

Mr. Colley

I imagine if it were in Gaeilge it might be a little more felicitous than that.

Mr. Ryan

Possibly simply "taréis".

Mr. Colley

It could be, yes. Section 6 (1) provides:

an order under this Act may include such consequential, supplementary and transitional provisions as the Minister of State making the order thinks fit.

It might well be advisable to add to that some such provision as: "and as are necessary to apply the provisions of this Act." It seems rather wide without such an addition. In relation to orders provided for being made under this Bill, I recognise, of course, that there must be fairly widespread power to make such orders in the particular circumstances that the Minister is faced with in a Bill such as this. Undoubtedly problems will arise which the Minister has not yet anticipated and has not been able to, and consequently he and other Ministers need to be in a position to have fairly widespread powers to make the necessary orders. Nevertheless, I would appreciate it if the Minister would spell out for us what he envisages in regard to section 5 (7) which provides:

Subject to section 8 (1) of this Act, an order made under this section may have retrospective effect.

If the Minister could explain the reason for this and, perhaps, give a few examples of the kind of thing he would have in mind it might be easier for us to accept this kind of provision which, as I say, I recognise may well be necessary. In addition to that, in relation to the orders which may be made, as the Minister has pointed out, there are two savers in the Bill. The first which is only right and proper, is that nothing in the Bill is to be taken as enabling the rate of any tax to be altered or a new tax to be introduced. It is correct that there should be such a restriction. The second saver is that actions taken by an official person or body before and in anticipation of the coming into force of any provision in the Bill or the making of an order shall have the same validity as they would have had if the relevant provision had been enforced at the time of the action.

I could visualise a situation in which this power might be necessary but it would be helpful if the Minister would spell it out because, on the face of it, it is an unusual provision and one we should not accept lightly because it appears to be giving power to officials of public bodies to make lawful things which at the time they do them are unlawful. That is all very well if what they do is something formal in preparation for the changeover of the financial year but we want to satisfy ourselves that the power being given will be confined to such formal matters and will not allow anybody, under cover of this provision, to take action to which strong objection could be taken and which might not be necessary, strictly speaking, in pursuance of this Bill but which would obtain validity under this provision which it would not otherwise have.

So much for the actual provisions on the face of the Bill at the moment, but there are some other matters that I want to mention and which we would like the Minister to clarify for us. First, I believe it is very important that special efforts should be made to inform the public of what is happening in relation to the transitional period of nine months. There is a grave danger that, on the one hand, people might think, for instance in regard to local rates, when they get a bill it is for a year's rates when, in fact, it is only for nine months. They might be very much misled and in the following year might feel there was an enormous jump in the rates. On the other hand, there is a danger —to be realistic we must recognise this—that some local authorities might be tempted in these circumstances to increase rates in a way they would be slow to do if a full year were involved but there is only a nine months period and the increase might not, therefore, be obvious to the ratepayers. Perhaps this would not happen —I hope it would not—but it would be unrealistic to think some local authorities would not be tempted to make it happen and we should do what we can to ensure, particularly by publicising what is involved in the transitional period, that this temptation is resisted.

As the Minister is well aware, legally rates are payable in two moieties and I am sure he is equally well aware that in many cases people pay the second moiety although it is legally due on 1st October, very often in February or March, the last month of the local authority's financial year. In such cases, and in particular in relation to certain types of ratepayers, farmers and others whose income pattern is geared to this type of payment, the demand for payment of the second moiety prior to the 31st December— which will be involved in the transitional period—may present hardship. There is also the problem that people who have traditionally paid their second moiety in March will, under the transitional nine months from 1st April to the end of the calendar year, be called on to pay three moieties in a period of approximately ten months, that is the second moiety of the second year's rates in March, the first moiety of the transitional nine months in April, May or June and then the second moiety of the transitional period any time from 1st October even to December. This means the three moieties of rates being paid in a period of approximately 10 months which could create hardship.

I know it is very difficult to deal with this situation; it is one of the inherent difficulties in the changeover. It is difficult certainly on a legal basis but I think it is possible for the Minister or his colleague, the Minister for Local Government, to take special steps to direct local authorities and rate collectors to exercise the discretion they are entitled to exercise in regard to insisting on payment of rates at a particular time. It would be appropriate in relation to this transitional period that any discretion that can be exercised in the case of ratepayers who are suffering genuine hardship as a result of the changeover, should be exercised on a much wider and, perhaps, more sympathetic scale than is normally possible for local authorities and rate collectors. There is a special problem here for ratepayers and there is no use in trying to blind ourselves to the fact that it does create special problems.

One could argue on the strict legality of the matter and imagine there is not a problem but there is, in practice, a problem and there will be for a number of ratepayers. That being so, it behoves the Minister or his colleague the Minister for Local Government in so far as they can do so, to ensure that ratepayers who suffer hardship as a result of this are not harried and hounded by local authorities or rate collectors in the special circumstances which will arise.

Furthermore, the Minister referred to the reduction of the charge on the rates for health services. I am trying to find the reference but what I have in mind in that connection is that we would like to know authoritatively from the Minister—because there have been some conflicting statements at certain local authority meetings— what precise arrangements are proposed in regard to the relief of health and housing charges in relation to the transitional nine months period. Some people have suggested that the amount of relief should be 25 per cent. Others apparently have said that it will only be 12½ per cent. We would like to know precisely from the Minister what is intended in this regard.

A substantial proportion of local authorities' outgoings relate to loan charges which are at the moment paid on a yearly basis. We would like to know what precisely is to happen in regard to those charges, in particular repayments to the Local Loans Fund, during the transitional nine month period. We would like to be assured that the repayments will be in proportion to the nine months and that there will not be demands for a full year's payment of charges in the nine months period.

The Minister has indicated that although this Bill does not provide for the changeover of the income tax year to the calendar year it is intended to do this in the longer term. I should like the Minister to spell out more precisely what the difficulties are in relation to making that changeover. He will, I think, agree that on the face of it is inappropriate and possibly confusing to have a situation in which all the financial years of the Government, public bodies, local authorities and so on are the calendar year but in relation to income tax that we would still cling to the old financial year. I can see considerable difficulties and confusion arising in regard to this and we would certainly favour, if it were at all possible, the changing of the income tax year at the same time. The Minister has indicated that there are difficulties involved. I appreciate that but if he would outline some of the difficulties we might, perhaps, be more reconciled to leaving this apparent anomaly to which we are not very reconciled at the moment because we can see difficulties arising from it.

I wonder could the Minister indicate to us what will be the precise position in the House here and in our procedure in relation to the transitional period under the Appropriation Bill. At the moment when the necessary Financial Resolutions are passed this provides, in practice, the necessary money up to Christmas and then the balance is provided when the Estimate for each Department is passed. Perhaps the Minister would spell out for us how this will operate in the nine months transitional period. In other words, what will be the effect? Will it be that if the budget is introduced, let us say in April and the necessary Financial Resolutions are passed that will cover the whole requirement up to 31st December and that thereafter we will then apply the Appropriation Bill as he has indicated in the calendar year? If that is so, then I appreciate that that is the position but I want to be absolutely certain that that is so.

I should like to ask the Minister why we should not adopt the procedure adopted by the original six members of the EEC by having an autumn budget, at least in the short term. The Minister said:

The original six members of the EEC present their budgets to their parliaments in the autumn prior to the opening of the year to which they relate. The merit in our circumstances of adopting this practice will be explored, but it may be assumed, I think, that any such further change in our financial timetable would be unlikely in the immediate future.

I can see certain objections, perhaps, to that procedure but the Minister will appreciate that if we are going to make changes which will cause a certain amount of upheaval no matter how well it is organised it would be better to make any changes that have to be made now and not to face us with a further change at some time in the future. In so far as co-ordination with our EEC partners is concerned it would appear that under this Bill we are only going part of the road and not going the whole way. It can be argued, of course, that on the basis proposed in this Bill at least our financial year statistics and so on will be on a calendar year basis and will, therefore, be comparable but we would appreciate it if the Minister would indicate what the problems would be for us if we were to adopt the same procedure in relation to autumn budgets as the original six in the EEC and why, if we are going to make changes as we are under this Bill, we should not go the whole hog and make that change.

Subject to these various queries that I have put, we favour the principle involved in this Bill but we recognise that there can be considerable difficulties involved in its implementation. We wish to ensure that those difficulties are kept to a minimum, and that any steps that are open will be taken to minimise not only difficulties but in particular hardship for individual ratepayers. We would like to hear the Minister in regard to these various points so that we can consider what he has to say, consider our position and consider whether or not we would wish to put down any amendments to this Bill on the next Stage.

Mr. Callanan

This Bill may be essential because of our entry to the EEC. Deputy Colley has covered many of the points I wished to make. Coming from a rural area, I should like to emphasise that we are to have a transitional period in one of the worst years the farmers have had in a long time. Three moieties of rates may have to be paid in the one year. The Minister said yesterday that everybody had more money in his pocket this year than last year. I state very definitely that farmers have not got more money in their pockets. I can speak with authority, as a farmer. This was a disastrous year for farmers. I do not know who is responsible. I shall not blame anybody, but it is wrong to say that farmers have more money this year. Rates were traditionally paid in October and March.

Farmers sell grass-fed cattle in October. It is usual that animals the farmer has been feeding during the winter months are sold in March. It can be said that the rates are due when the county council strike the rate but the first moiety was never paid until September and the second moiety, which was due on 1st October, was never paid until March. Those with small valuations may be in a position to pay their rates in November. It can be said that the people I am referring to, the small farmers, do not pay rates in respect of their land but it should be remembered that they must pay rates in respect of the buildings on their land.

In my county the rate has gone to over £7 in the £ and farmers must pay that full rate in respect of their buildings. For this reason I should like to see this legislation postponed. However, I am not pressing this because my party is not opposed to the legislation. In my view this is the worst year for this transitional period. At present there are too many cattle being offered for sale. Farmers are anxious to sell them because it costs a minimum of £1 per day to keep them. The gates at Athenry mart last week were closed early because of the big number of cattle offered for sale.

It will be said that the price of cattle will increase but it should be remembered that they will have to be cared for the 28 days in February and 31 days in March. If the price increases in April it would want to be in the region of £60 per beast to cover the cost of feeding them for the months of February and March. At present hay is costing £1 per bale and nuts have increased by £75 per ton. When I objected in this House to an £8 tariff on calves last summer I was told there was a scarcity of cattle in this country.

An Ceann Comhairle

What the Deputy is saying is of very great interest but I am anxious that the Deputy would relate his remarks more closely to the measure now under discussion, the Exchequer and Local Financial Years Bill, 1973.

Mr. Callanan

I am relating my remarks to the ability of the farmer to pay three moieties in the year.

An Ceann Comhairle

The Deputy has made his point in that regard.

Mr. Callanan

I am explaining why the farmers have not the money to pay three moieties as they will have to from April 1974 to December of the same year. The Minister for Agriculture and Fisheries made a statement recently to the effect that the reason cattle were so cheap was that there were a million more cattle in the country but when I asked a question in relation to the price of cattle I was informed that there was a scarcity.

Cattle prices are very bad at present and it is for this reason that I am concerned about the fact that farmers will have to pay three moieties this year. The question of the loan charges is another important matter. How will they be fitted in? In my view the change in the system of paying rates will prove very awkward particularly for the farming community. I accept that there is a lot to be said in favour of having the financial year ending on 31st December but the transitional period is at the wrong time. I believe it has been agreed in principle by the Government that the income tax year should be changed but it is a pity that this could not be done right now.

If this legislation was left over for one year it is possible prices would improve and the circumstances of the people would improve so that they would be in a better position to meet these demands. It has been stated that the people in this country have more money in their pockets this year than ever before but the farming community have not got the money. They have gone through a very bad year and to ask them to pay three moieties of rates in one year is a bit too much. The Minister should make arrangements with his colleague, the Minister for Local Government, to have some easing in the collection of these rates. There will be a temptation by the local authorities who are budgeting for nine months only to put 1p or 2p on. The rates this year, because they will only cover nine months, will not be very high, but the following year I believe they will soar. I have no objection to the change but I believe the Minister picked on a wrong year.

Minister for Finance (Mr. R. Ryan)

I should like to deal with Deputy Callanan's point first. It would be a matter in the future, as in the past, for rate collectors to decide how to collect the rates. As the Deputy is aware, at the moment rates are payable in respect of the first moiety on demand and in respect of the second moiety on the 1st October.

Mr. Callanan

They are not paid that way.

Mr. R. Ryan

That is the law. Many people pay them then or within a certain time afterwards. Indeed rate collectors use many devices to secure early payment because the sooner they receive payment the higher commission they earn. A large number of people pay their rates earlier than the end of March or December. I accept there is a difficulty as far as the farming community is concerned but the present practice in relation to the farming community is one that has arisen because of consideration in rural areas of the peak periods of income which farmers have. I do not see any reason for a change in that. It will be a matter for each local authority to adopt its own procedures for the collection of its own rates.

Of course, local authorities, if they do not obtain payment of the rate when it becomes due, are obliged then to resort to borrowing, and borrowing as we know today can be a most costly process. Many local authorities in recent years have been expediting the pace at which they collect the rates because by so doing they are able to reduce the rates. The alternative to early payment is heavy borrowing which in turn has to be loaded on to the rates. It would be a matter for each local authority to consider these things within its own sphere of influence and knowledge. We do not see why the change in the financial or local year should in any way bring about any difficulties or any additional burdens.

When people say there will be three moieties this year they are overstating the case. Many people have already paid their rates for 1973/74 and they will not be involved in any payment at all in respect of this local year.

Mr. Callanan

Very few people in rural areas have done so.

Mr. R. Ryan

It is only a minority in rural areas who are paying rates at all because a large number of them are totally exempt from rates.

Mr. Callanan

Not on buildings.

Mr. R. Ryan

When the Deputy was talking about the difficulty of paying rates because of farm incomes going down I assumed he was referring to farmers who were liable to rates in respect of their agricultural holdings but I accept what he now states. The balance which would become payable under law in 1974 will only be in respect of three-quarters of the year and, therefore, instalments of a much smaller sum are involved. It is not a sum for a 12-month period but it will be for each local representative to make his own case for his own area for such measures of relief as he considers to be appropriate having regard to this change. Both Deputies Colley and Callanan said they thought it a pity that we were not proceeding also to have the income tax year coinciding with the proposed financial year which is in accordance with the calendar year. The Deputies cannot have it both ways. They maintain we are creating difficulties and adding to the burden of payments that people will have to make because of our moving towards the financial year in respect of rates while at the same time they are saying we should make the change also in respect of income tax. According to the Deputies' arguement would that not create a burden for people who would have to pay their income tax in full before the 31st December of this year?

Mr. Colley

We have asked the Minister to spell out the difficulties.

Mr. R. Ryan

The Deputies are contradicting themselves but, of course, it would not be the first time that we have heard members of the Opposition do that.

Mr. Callanan

I was referring to small farmers.

An Ceann Comhairle

Order.

Mr. R. Ryan

As to the possibility of adopting the original Six EEC practice of having budgets in the autumn rather than in the spring, perhaps, there is some misunderstanding as to what EEC budgets in the autumn are all about. Mainly, they concern debates on estimated expenditure and revenue but in most cases it is not possible for EEC countries any more than it would be possible for us to announce in the autumn the tax changes that were to take place as and from the 1st of the following January. In particular, it would not be possible to announce in advance what changes were to take place in respect of excise because to do this would result in massive purchases prior to the coming into effect of the changes. However, it is something I am having a look at. There is much to be said for considering the forthcoming financial year in advance rather than considering it eight weeks or more after the date of commencement of the financial year. Obviously, it is preferable to plan ahead. Perhaps the need for that is greatest when we are in a period of growth and when we need to set targets not only for the year but for the years ahead but it is something it would be unreasonable to bring in this year.

There will be a number of difficulties mainly for parts of the public sector as a result of the changes we are making and we shall have to do in nine months a great deal of what normally we would spread over a 12 month period. This applies to several sectors and not merely the individuals or companies that will be affected directly. For example, the Valuation Office will have to prepare their valuation lists earlier than has been the practice up to now. The same problem will arise also in relation to local authorities and Government Departments who will have to prepare their estimates ahead of normal schedules. Therefore, there will be quite an amount of pressure without our adding to it by any further change at this stage. It may well be that in the light of experience it will be found desirable to modify some of our present procedures. I think the best way of reaching the right decisions is to make the changes proposed now and see how they work out.

I was asked specifically to identify some of the difficulties in regard to changing the income tax year. We have discussed this question at considerable length with the Revenue Commissioners and we are satisfied that there is a great deal more study to be done in this area because of the complexities of the whole income tax code. As Deputies will be aware, in 1967 there was a special income tax Act for the purpose of consolidating the income tax laws. The Act alone is larger in volume than the total of all other legislation passed in 1967. That is an indication of the tremendous studies that must be made before any change in the income tax year could be brought about. We are looking at the matter and in any event it would be preferable that the business world would become accustomed to such changes as may be required by reason of the changes in the financial year before they would be plunged into the much more complex changes that would result from a change in the income tax year.

Mr. Colley

I appreciate the legal difficulties involved but would there be any practical difficulties for the taxpayer if a change were to be brought about?

Mr. R. Ryan

The practical difficulties would be no more or no less than those the Deputy referred to in relation to the collection of rates. In respect of those persons who come within the PAYE system there would not be any significant difference because they pay by instalments in any event. There is another difficulty which in our particular situation is not inconsiderable and that is in relation to the double taxation agreements we have. The one which is most material in our circumstances is that with Britain. As yet, there is no indication from Britain of any change in their income tax year. They are slow enough in regard to changing their financial year. Therefore, any change contemplated by us would involve negotiating a change in our double taxation agreements but, then, if Britain proceeded towards a change in the income tax year we would have to re-negotiate. Therefore, perhaps it is best to wait a while and see what happens but I would anticipate that a change would come about eventually.

Deputy Colley raised the question of section 8 (2). He considers it to be too sweeping to provide for the validation of acts in advance of the legislation. I can understand his concern here but would point out that validity will be given only to something done in pursuance of this Act and that anything done beyond the scope of this Act which is not necessary to achieve the purpose of the Act, that is, to change the financial and local year, would be ultra vires and would not be in any way saved by this provision.

Mr. Colley

I do not think that is what the section says. It does not refer to "pursuance" but to "anticipating".

Mr. R. Ryan

Lines 17 and 18 read:

.... before and in anticipation of the enactment of this Act, of the coming into operation of section 2 (3) of this Act or of the making of an order under section 5 of this Act....

Anything that would be invalid under this Act would not be made legal by that section.

Mr. Colley

Is that the advice the Minister has?

Mr. R. Ryan

That is the advice I am giving the Deputy and it is not in conflict with any advice I might receive. Deputy Colley, too, expressed some doubts in relation to section 6. I suppose one's attitude towards life changes when one changes position in this House. The Decimal Currency Act of 1970 had a section which is similar to section 6 here. Section 10 (2) of that Act says that an order under this section may include such consequential, supplementary and transitional provisions as the Minister making the order thinks fit. In the Bill before us there is a reference to the Minister for State. That is the only change there is between the two sections. Again, the Minister's power to make such orders extends only to the authority conferred by this Act and does not allow him to make any order beyond the scope of the Act. If the Minister were to go outside the scope of the Act his action would be open to immediate challenge.

In dealing with section 8, I overlooked referring to some of the areas of difficulty which in our opinion need to be covered. For instance, local authorities and other statutory bodies are required, some by statute, and others by order to prepare estimates and accounts at a certain time and to operate within a certain financial year and so on.

In order to prepare for the nine-month period, which admittedly is comparatively short, it has been necessary for a number of these organisations to start gearing their administration and adopting estimates to meet the requirements of the transitional period. In some cases they have had to make changes in their procedures. While in some cases they have been able to make the necessary changes under existing legal provisions there have been other cases where the procedures are such that it will be after the event that changes can be validated. We thought it necessary and desirable to validate what might have already occurred.

As Deputy Colley knows, the Office of Public Works have to issue estimates and demands to local authorities each year in relation to arterial drainage. The demands for the new year had to be made in December, 1973, on a nine-months basis. It is necessary to give such demands full legal validity. Rating authorities have to hold their statutory estimates meetings and because of the dates of these meetings to anticipate the transitional short period a number of the local bodies have held statutory meetings already and have had to make certain decisions as a consequence of having those meetings. This umbrella provision will provide that all such actions are valid.

As I want to emphasise, it will be only valid if it is done in pursuance of the objectives of the Act. I trust that that covers the points which the Deputies raised. I should like to express my appreciation of the manner in which they have received and discussed the Bill. I am sure that if there are any other difficulties we will be able to resolve them in the course of the passage of this Bill.

Mr. Colley

I raised a number of other questions with which the Minister did not deal. I asked whether the Minister could give an example of the need for this retrospective provision. Secondly, I asked for clarification of the position in regard to the relief of rates in relation to health charges and what precise proportion would be applied for the nine months' period and similarly in relation to loan charges.

Mr. R. Ryan

In respect of the nine-month period, the Government will make an announcement shortly about that matter. It will be in keeping with the pattern of reliefs which we indicated last year.

Mr. Colley

Approximately when could we anticipate this announcement?

Mr. R. Ryan

It will be this month. As the Deputy appreciates, local authorities need to know in order to make the estimates necessary for the next year.

Mr. Colley

Will it be applied on loan charges in the nine-month period? Will there be an appropriate adjustment?

Mr. Ryan

At the moment loan charges are payable before the 31st December, even though the year is up to the end of March.

Mr. Colley

If they relate to a 12-month period it would seem that the amount payable in the transitional period by a local authority should be related to a nine-month period of loan charge.

Mr. R. Ryan

We are largely talking about a book-keeping transaction or entry. Whatever amount the local authorities have to pay will be recouped by the State.

Mr. Colley

Surely not in all cases.

Mr. R. Ryan

As the Deputy knows, in a very large number of cases that is so nowadays. The overall load of local authorities is not going to change in any way at all.

Mr. Colley

I appreciate that.

Mr. R. Ryan

There are a multitude of administrative problems in this area. I would not presume to deal with them all today. Many of them are under negotiation with county managers and local authorities. Some of the difficulties have not yet been resolved, but I will look into them.

Mr. Colley

I appreciate that. I wanted to get the Minister's opinion on that subject, as to what can be worked out by negotiation and that where, for instance, there was normally a 12-month charge payable, in the transitional period his intention is that it should be a nine-month charge so that there would not be an excessive charge.

Mr. R. Ryan

We want to make no charge other than what is necessary. We do not want anybody to be inconvenienced or under stress because of this charge.

Question put and agreed to.

An Leas-Cheann Comhairle

Next Stage?

Mr. Colley

We will have to consider what the Minister has said. Possibly we will have to consider putting down some amendments. Might I suggest Tuesday week?

An Leas-Cheann Comhairle

The Bill will be ordered for Tuesday week which is the 19th February, 1974.

Committee Stage ordered for Tuesday, 19th February, 1974.