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Dáil Éireann debate -
Thursday, 4 Jul 1974

Vol. 274 No. 3

Finance (Taxation of Profits of Certain Mines) Bill, 1974: From the Seanad.

A message was received from the Seanad that it had accepted the Finance (Taxation of Profits of Certain Mines) Bill, 1974, in respect of which it had made the following recommendation:
SECTION 3.
1. In page 4, subsection (3), that line 57 be deleted and the following substituted:
"expenditure incurred prior to the date of the change in ownership:
Provided that in any case where part of the ordinary share capital of any body corporate is acquired by a Minister of State, such acquisition shall be disregarded in determining whether or not there was or is such a change in ownership as aforesaid."
SECTION 4.
2. In page 5, subsection (2), that line 54 be deleted and the following substituted:
"through another body corporate or other bodies corporate:
Provided that where part of the ordinary share capital of any body corporate is held by a Minister of State and the remainder of the ordinary share capital of that body corporate is held by another body corporate, the first-mentioned body corporate shall be deemed, for purposes of subsection (1), to be a wholly-owned subsidiary of the last-mentioned body corporate."
Ordered: That the recommendations be now considered.
The Dáil went into committee, accordingly, to consider the Seanad recommendations.

I move the acceptance of recommendation No. 1.

This recommendation, as indeed, recommendation No. 2, is in consequence of a point which Deputy Colley raised during the course of the debate on Report Stage of this Bill in the Dáil.

May we take it that the House will discuss recommendations Nos. 1 and 2 together?

They are consequential. The point was made by Deputy Colley, which I said I would look at and was very glad to accept, that the Bill as originally drafted would have meant that if the State participated in the development of a mine the benefit which we intended to confer on the developers to set off exploration expenditure would be denied because of the division of ownership of the development mine. It was never our intention so to provide. We, therefore, have amended the Bill in the manner set out in these two recommendations and Seanad Éireann accepted the amendments which will ensure that if the State participates in a mine the right to set off exploration expenditure against income tax liability will not as a consequence be denied to the company.

I said in the Seanad, and I repeat, that the Government are most anxious to encourage and in every way to facilitate participation by the State in the development of our mines and we see these amendments as providing no disincentive but we trust they may be interpreted as being an incentive to people engaged in the mining industry to encourage and to invite State participation which they will find will be readily forthcoming. I therefore recommend the recommendations for acceptance by the House.

I am naturally pleased that the Minister accepted my advice on the points involved here. My only regret is that he did not accept my advice on many other points in regard to this legislation. If he had, we would have better legislation than we have. We must be grateful for small mercies.

The Deputy is not being objective.

I feel that I am. I am confining myself to what is before the House, as I know the Ceann Comhairle would want me to do. It is important that we should make clear that not alone will we not put any obstacle in the way of State participation in mining in this country but that we want actively to encourage it because with the changed circumstances in mining over the years, to which I have adverted in the previous discussion on this Bill, changed circumstances brought about largely as a result of the legislation which was enacted by previous Governments, it seems to me to be very possible and, indeed, very desirable that the State would participate in a joint venture or joint ventures in future in mining. Therefore, these recommendations, although they do not go to the root of the whole matter, certainly do not inhibit State intervention and may, as the Minister says, encourage it. I am quite pleased that the Minister listened to me on this point at least.

There is, however, one matter that I am somewhat concerned with. Perhaps the Minister would be able to reassure me on it. I am assuming that this matter was looked into and that the drafting before us is considered to be the best way to do what is required. In both cases where there is a reference to the ordinary share capital of any body corporate acquired by a Minister of State on the face of it seems to mean that a Minister of State must actually acquire the capital. I would envisage in the normal way that what would happen would be that if a State company in which, perhaps, the Minister would hold the share capital or the bulk of it—although there are cases where it is not constituted in that way; it may be under his control but it would not have share capital—is the instrument by which the State participates in mining in a joint venture with private enterprise, on the face of it that would appear to mean that the share capital of the body corporate to which we are referring here would be held by the State company and not by the Minister of State. Of course, in a case where the State company—I am not using that term loosely—is not a a limited liability company but is a creation of statute under the control of a Minister, it would seem on the face of it again that the whole position might not be covered as envisaged in this recommendation if that body were to acquire portion of the share capital in a body corporate operating a joint venture mining operation between the State and private enterprise.

It may be that the reading of these recommendations on their face gives that impression but that, in fact, if one analyses them that is not the position. I would hope that the position is not as I have outlined it and that the Minister will be able to reassure me that in these kinds of cases which, as I say, are the most likely where one can envisage the State participating in mining with private enterprise, these recommendations as drafted will achieve what I recommended and what the Minister wants to achieve. As I say, on the face of it, it does not appear to me to be quite clear that this wording is doing so.

I do not think there would be any point at this stage in postulating the establishment of a State holding company, which I think is what Deputy Colley has in mind, perhaps specifically directed to mines.

I was not thinking of that. The Minister is right; this could be, but I was thinking more in terms of Bord na Móna or some organisation like that participating.

Or a reconstituted Mianraí Teoranta or something like that. That, of course, is a possibility, but what we would visualise at the moment by way of State participation would be that a Minister would directly be a holder of shares in a mining company. We do not, in relation to this matter for the time being at any rate, consider that we should set up a separate company in which the Minister for Finance or some other Minister would be the owner. If it comes to be decided at some time in the future that there should be such a holding company or a company specifically and entirely concerned with the development of mines, we would visualise that we could meet the situation by amending legislation. However, we should not for the time being, when we have not got such an entity in being, proceed to draft legislation on a purely hypothetical basis. This will ensure that direct State participation will not deny to the developers the benefit which the legislation intended to confer upon people as an incentive to future exploration. It could be said that we need not have provided this amendment at all in this Bill, that we could have awaited participation by the State and brought in legislation which could have conferred this benefit retrospectively, but I accepted the suggestion of Deputy Colley that it would be appropriate to do it at this time, and that is exactly what I have done. It does not close the door at all to the possibility which Deputy Colley has suggested, and, as I say, that raises a much larger question which we would not be able to decide at this stage.

May I say to the Minister that if, as I suspect now in view of what he has said, we find at some time in the future that there may be a practical difficulty in doing what we both want to do here, and if he has to come back to amend this, as far as this side of the House is concerned, we shall speedily agree to amend it in order to achieve the objective which I think is worthwhile.

That is encouraging. I thank the Deputy.

Motion agreed to.
Acceptance of recommendation No. 2 agreed to.
Acceptance of Seanad recommendations reported and agreed to.

I will now ask the Minister to move the appropriate amendment in consequence of the acceptance of recommendation No. 1.

I move:

In page 4, section 3, subsection (3), to delete line 57 and to substitute the following:

"expenditure incurred prior to the date of the change in ownership:

Provided that in any case where part of the ordinary share capital of any body corporate is acquired by a Minister of State, such acquisition shall be disregarded in determining whether or not there was or is such a change in ownership as aforesaid."

Question put and agreed to.

I will now ask the Minister to move the appropriate amendment in consequence of the acceptance of recommendation No. 2.

I move:

In page 5, section 4, subsection (2), to delete line 54 and to substitute the following:

"through another body corporate or other bodies corporate:

Provided that where part of the ordinary share capital of any body corporate is held by a Minister of State and the remainder of the ordinary share capital of that body corporate is held by another body corporate, the first-mentioned body corporate shall be deemed, for purposes of subsection (1), to be a wholly-owned subsidiary of the last-mentioned body corporate."

As a matter of academic interest, the amendments which the Minister has moved, I know, are consequential on what we have agreed to, but I have not seen the form of them. I do not know what is the correct procedure in this matter.

I have an admirable precedent before me in which Deputy Colley moves recommendations and amendments in the same way at cols. 1881 and 1882, Volume 262 of the Official Report of Friday, 14th July, 1972.

If they were not supplied to the Opposition on that occasion, obviously the Opposition were not as alert as the present Opposition. I am inquiring purely on an academic basis. I agree.

Question put and agreed to.
Message to be sent to the Seanad acquainting it that the Dáil had accepted the recommendations made by the Seanad and had made amendments in consequence to the Bill.
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