I move amendment No. 10:
In page 10, line 30, to delete "whether" and substitute "where"; and in line 31 to delete "before".
As the Acting Chairman has pointed out, these amendments are cognate though they relate to two different sections. They have precisely the same purpose, namely, to undo the Minister's proposal to take away the tax exemption from existing mines. From the point of view of orderly debate we should, perhaps, have discussed these first, in which case most of the other amendments I tabled would not have arisen had these been accepted.
Once again, as far as we are concerned, I want to make it quite clear that the treatment of new mines is quite separate and should be quite separate from the treatment of existing mines. When we were in Government we made it quite plain that the development of mining here had reached a sufficient level to ensure that we did not need to continue the exemption given in the 1967 Act for new mines; in other words, with smaller inducements, we could get mineral development continued at a satisfactory rate. As was said earlier, we set up an inter-departmental committee to examine closely the kind of return the community could hope to get from future mineral development and still leave such development sufficiently profitable to induce mining companies to embark on mineral development. A considerable amount of work had gone into that when we left office and more work went into it after the present Government took over. That committee duly reported to the Government and I understand decisions were then made. It is our contention that the decisions made were, to say the least of it, mistaken. There may well be a case for applying more stringent taxation proposals now to new mines than are provided in this Bill. I would have been making this case much more strongly if I did not believe that the Government may well have it in mind to supplement the taxation proposals by the level of royalties levied on new mines.
I want to make it quite clear that, again as far as we are concerned, we believe the level of mineral development is such that our approach now can afford to be much more stringent than it was. We are in a much stronger bargaining position than we were when the last lease was granted eight or nine years ago. Whatever we do about new mines, and whether we want to argue that these provisions are too stringent or not stringent enough, whatever view we may take on that, the question of the treatment of existing mines is a quite separate and distinct question. Some people have endeavoured to misrepresent our position in this matter as though we thought that the existing exemptions should continue to apply to all new mines. The fact that we set up the inter-departmental committee and made announcements about this shows that that is totally untrue and that our approach was to try to get as much as possible for the community from new mines.
However, when one comes to the question of existing mines one is faced with the position that an exemption for a 20-year period was agreed to by this and the other House. In this House, and I think in the other House, it was agreed to on both sides and was built into our legislation and operated by existing mining companies who geared their financial arrangements to that provision, written so solemnly into our legislation. I think it is an extremely serious matter that this Government would consider welching on that arrangement not just in relation to the mining companies concerned, though I believe we have an obligation to any individual or company operating under laws enacted by the Oireachtas, whether Irish citizens or not: we should not decide to deal with them inequitably or unjustly—not to do so knowingly, anyway.
Apart from that aspect the consequence of the Government's decision as embodied in these two sections, and which the amendments I am moving are designed to cure, is that an existing statutory exemption for a 20-year period, held out as an inducement to mining companies, is to be withdrawn not just from new companies but from existing companies who were operating under it. I think this was a mistaken decision by the Government. Even if the amount of revenue involved were enormous, taking a long term view of our economy and of our dependence on attracting foreign investment if we are to solve our unemployment problem, it would be wiser and more profitable in the long run to stick to a deal made and written into legislation for existing companies. The fact is that the amount of revenue involved is relatively quite small, and for that relatively small amount of revenue, I believe we have done ourselves considerable damage and are leaving ourselves in a position where further damage can ensue for us.
It is a well known fact, adverted to once more today at Question Time by the Minister for Industry and Commerce, that we are in a very competitive business in trying to attract investment from abroad. As the Minister for Industry and Commerce said, people considering investing here can look almost all round the world and find inducements offered to them in various places. That being so, we should not be putting at risk the good name of this country in attracting investment. We should not be destroying the reputation, hard earned over long slogging years, that this country, unlike a number of other countries, had abroad that if a deal were made with an Irish Government it was kept. It is vitally important that that reputation should be maintained and this far transcends the mining industry in Ireland.
The Minister may say it is wrong, and possibly that it is mischievous, to say that damage has been caused to us in this way. But the fact is that after this announcement of the Government's and the Minister's intention to withdraw the statutory exemption from existing mining companies, almost immediately one member of the Government, the Minister for the Gaeltacht, spoke about the decision and went out of his way to assure potential foreign investors that the existing tax exemptions for profits on industrial exports would not be withdrawn. Subsequently the Minister for Industry and Commerce, I think the Minister for Finance, and certainly the Taoiseach, made similar speeches, going so far as to say they would personally undertake in writing that the exemption from tax on profits of industrial exports would not be withdrawn.
There is only one other possible explanation for this, which I referred to on another occasion and rejected. The explanation which I reject is that the Government were so inept and incompetent that they did not realise that by offering these written undertakings they were drawing attention to the danger people thought might exist. I have a pretty low opinion of the Government in many fields but I do not believe they would be so inept or incompetent as to make that mistake. Consequently I am left with the only possible conclusion that those speeches by Ministers and the Taoiseach offering written undertakings that the statutory exemption in regard to profits on industrial exports would not be withdrawn were offered because the Government had discovered, having made the announcement of the provisions contained in this section, that numerous potential foreign investors in industry in this country took fright, that they needed reassurance, and great efforts were made by the Government to give that reassurance, the latest being by the Minister for Finance on the Second Stage of this Bill.
I submit that kind of reassurance would not have been necessary if potential foreign investors had not been frightened by the Government's announcement, and that potential foreign investors should not have been freightened—that the Government should have looked ahead to the consequences of what they were doing.
If the Government had announced that this taxation provision would apply to new mining in Ireland there would have been no problem—no basic problem would have arisen. The real problem arose because the Government made it clear they were going to apply the new mining regime to existing companies and take away the statutory exemption. A little thought on the part of the Government would have shown precisely what would happen if they made that announcement, and clearly no thought was given to the consequences. But when it happened then we had this— I think it would be reasonably fair to describe it as a frantic effort—frantic effort by members of the Government, including the Taoiseach, to provide reassurance, to offer written undertakings in regard to something that was inscribed in the legislation of this State. To say the least it was an anomalous situation. It was a situation which should never have been allowed arise. It was a situation which, potentially, would be far more damaging to the economy of this country than any revenue that would be brought in by applying this Bill and its provisions to existing mines. It was a mistake. I think the evidence is there that it was a mistake. The Government have tried, rightly in my opinion, to reassure people so that they would not be frightened off because the consequences of that could be extremely serious for employment in this country. But the most effective reassurance that the Government could give, by far the most effective reassurance, would be to accept these amendments with the consequence of continuing the existing exemption for existing mining companies only.
I have had a number of years experience as Minister for Industry and Commerce. I know just how delicate can be the situation in regard to the attraction of industries from abroad to the kind of image that potential investors have of the economic climate in a country, and the image that was created prior to this announcement in this country was an extremely good one. One of the greatest assets—and this was repeated to me by numerous foreign industrialists—we had was the understanding that if one made a deal with the Irish Government that deal stood. I hope that, by now, the Minister has recognised the mistake of that announcement. I hope he will not attempt to argue, in face of all the evidence to which I have referred, that no damage has been done. The real question is: what is the best way, in so far as one can, to undo that damage? I would suggest there is no better or more effective way than that suggested in these amendments.