asked the Minister for Finance if, in view of various Government statements to the effect that improved marketing conditions are likely to occur, he considers it essential that the rate of investment in industry should be accelerated so that this country will be in a position to take full advantage of improved marketing conditions when they do occur.
Ceisteanna—Questions. Oral Answers. - Industrial Investment.
4.
Mr. Kenny
The answer is in the affirmative.
The fiscal reliefs and Government expenditure provided for in the recent budgets were designed to induce industrial investment to the maximum despite the current economic difficulties. As evidence of this concern and priority, the provision for the industrial Development Authority for 1975 is £42,500,000 which is 50 per cent greater than that for the previous year. The 1975 provision for capital expenditure by the Industrial Credit Company is £24 million compared with £4.6 million in 1972-73, and £16.2 million in 1973-74. The liquidity problem has been eased by the recent fiscal and monetary measures including increasing the rate of initial allowance for capital expenditure incurred on industrial buildings between 15th January, 1975, and 31st March, 1977, from 20 per cent to 50 per cent and the rate of annual allowances for industrial buildings from 2 per cent to 4 per cent. Company tax relief costing £12 million a year has also been given this year to assist companies engaged in manufacturing, construction or farming or in the sale of productive plant, machinery or materials to those sectors.
I would remind the Deputy there is a limit to Government action in attempting to induce investment. In the final analysis the decision to invest lies at the individual or company level.
Would the Parliamentary Secretary agree that the reason for the substantial increase in Government assistance to the Industrial Credit Company, to which he referred, is because of the failure of the public to invest in the Industrial Credit Company in the last few years as compared with previous years? Secondly, in relation to the relief of £12 million for industry, to which he referred, could he explain the logic behind and the reason for following the announcement of that relief with the imposition of a much higher charge than £12 million on industry in respect of increased social welfare contributions?
Mr. Kenny
Company tax relief of the order of £12 million a year was given and does the Deputy suggest that is not enough?
What I am suggesting is that it is pointless to give £12 million in relief and follow that with a much bigger imposition on industry in the form of social welfare contributions.
This is turning into an argument.
I pity the Parliamentary Secretary trying to explain it. The Minister has failed to explain it.
Mr. Kenny
The Deputy will have to ask the Parliamentary Secretary to the Minister for Social Welfare about that.
No. It is a matter for the Minister for Finance.
Mr. Kenny
The £12 million was given per year as assistance to industry. That is all the question asks and you cannot get me away from that.
May I ask the Parliamentary Secretary is he serious when he suggests that the money allocated to the ICC will be used as an incentive for new industry when, in fact, it is pretty well earmarked to try to save existing industries?
Mr. Kenny
Companies fall away and it is not the fault of the ICC or the IDA and they must replace these companies by other companies. Is that not the logic of the situation?
Does that mean the Parliamentary Secretary accepts the fact that the ICC cannot do something the Government are failing to do?
Mr. Kenny
The Deputy is putting words into my mouth that I never used.