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Dáil Éireann debate -
Wednesday, 11 Jun 1975

Vol. 282 No. 1

Private Members' Business. - Wealth Tax Bill, 1975: Committee Stage (Resumed).

Question again proposed: "That section 2 stand part of the Bill."

Before Private Members' Time I was making the point that the Wealth Tax Bill in its present form is, first of all, pandering to the lowest instincts of man with its suggestion of a share of the cake without working for it—in other words, the neighbour who would rather look at the man next door working to improve the lot of himself and his family while he himself does nothing and at the same time expects a share of the profits from that man's labours. I do not think anyone would like to see that situation, except the Government that we are unfortunately saddled with at this time, a Government who are pandering to this type of base instinct for nothing but low, cheap, party politics.

The people are more intelligent than this regime suspect because the people can penetrate this pretence of sharing out the national cake in equal slices. They know that without incentive and without giving a man an opportunity to provide employment for others, there will be no wealth in this country. It is about time we nailed the lie that this measure will affect only a couple of hundred people. This Bill knocks jobs; it knocks jobs at present and it will knock jobs in the future. It knocks jobs that were already lined up. It will chase industries away from us and discourage those who are prepared to invest to provide extra employment.

The suggestions made by Deputy Barry Desmond last night that it is only a fiddly little Bill, that it only affects a few people are wrong. This Bill hits every man, woman and child and despite the public relations operations of this Government, they cannot hide this from the people. Some months back they said the Wealth Tax Bill would share out the wealth of the country equally among the people. We knew then that this was a false promise and a false proposal and despite the best efforts of the Government Information Service to hide the true meaning of the wealth tax proposals from the people, they realise that if any tax proposals are put forward which rather than being an incentive, are a disincentive, they will stop employers and industrialists from expanding their businesses and will stop other people who are prepared to open up industries. It will hit jobs and will hit every man, woman and child in this country. All we have to do is look at the figures. What is happening at the moment? There are more than 104,000 people on the live register. A large proportion of last year's school leavers still have not got jobs but the fact that they never got jobs means that they are not included on the register. I would estimate that at least 20,000 people still have not got jobs.

There are 50,000 unfortunate school leavers at present sitting for their examinations. They have been studying hard for five years and as if they had not enough worries heading into their Leaving Certificate examination they have the extra worry of where they are going after they finish in a fortnight or three weeks' time. Where are they going to get the jobs? That is another 50,000 on top of roughly 125,000 at the moment. Even the most conservative of economists at this stage are estimating that we will have more than 160,000 to 170,000 unemployed in autumn or early winter. That is 170,000 plus the school leavers. We are talking about the sort of figures which one finds it difficult to talk about because they are so desperate and so terrifying and the effects, social and psychological, are so appalling to even think about— figures of around 250,000. We are only a State of about 3,000,000 people. Then we have the party of the Left, the party of the people, the new republicans of 1969. They have forgotten about it at this stage because "republican" is a dirty word in the mouths of some of the Ministers on the other side of the House. They do not like to mention the word because they think 1916 should never have happened. The Chief Whip of the new republicans, Deputy Barry Desmond, said last night that this is only a fiddle diddle of a Bill, that it will only affect 200 or 300 people. We are talking about nearly 250,000 people. The Minister for Lands says it is an innocuous sort of a Bill which is not causing any harm one way or another. It is a Bill that goes part of the way towards causing an unemployment situation in which nearly 250,000 people will be out of work.

Deputy Desmond is a Labour member and in the tradition of Connolly and Larkin I would have expected him to be on his feet attacking the whole concept of any legislation which would cause further unemployment at this difficult time in our history. I would have expected him to be voting with us tonight on our footwear motion because of the death pangs and the death rattle of the footwear industry but he was not voting with us. He was telling us that he was going to support a Wealth Tax Bill which is based strictly on the policies of envy and has no relation whatsoever to basic economics. Wealth tax is only one part of a trio of Bills. No package could be more designed to exacerbate an already appalling situation in employment and in the economy generally. This Government have taken up the time of this House during the last number of months with no other Bills except the Racing Board and a few other minor Bills. Where is there one job being provided in those three taxation Bills? In relation to a letter read into the record by Deputy Colley, the Minister for Lands went to great pains to emphasise to foreign industrialists that they would not be liable for wealth tax because, assuming the parent company is based outside the country, they would be excluded. Assuming the subsidiary company is an Irish registered company you would be paying wealth tax on the shares of the company based in Ireland.

But if the shareholder was, say, an American or an Englishman would he not be paying wealth tax on the number of shares that he owned?

(Cavan): I have said that several times.

If not, the Minister can correct me.

(Cavan): The Deputy is still wrong.

This Bill is giving a benefit to the owners of factories which are foreign based because they will not be paying wealth tax but our native industrialists who are prepared to invest their money here are being penalised.

(Cavan): The Deputy is still wrong.

I have no doubt that the Minister will have plenty of opportunity to reply. I will make my point in the meantime. Are we to have a situation whereby an Irish industrialist is to be penalised for investing money in an Irish company while a foreign industrialist will escape scot free because of the fact that he is a native of another land? Do we want to see ourselves in this situation? We are an independent State but listening to some of the speeches of some of the Ministers one would not think so. We are not mirrors which must reflect all the errors of that section of land which is across the Irish Sea. If the Government of today had their way we would be tied to them. Deputy Desmond came in here last night praising Denis Healey, the Chancellor of the Exchequer, for his wealth tax proposals. Who in his right mind in any country at the moment wants to be associated with the legislative proposals of the UK Government? Deputy Desmond seems to think that they were the greatest thing since fried bread. Ask any man, woman or child anywhere and they will tell you that the UK at the moment is in an appalling state because of the very proposals which Deputy Desmond told us here last night would only affect a couple of hundred people and not to worry if Fianna Fáil tried to protect the rich—a lie and it is time that that lie was nailed here.

I do not think we should be trying to follow the proposals of Denis Healey or anybody else on the other side of the water when we see the sort of mess they have got themselves into over there. They got into that mess through the very type of policies and suggestions that are being put forward by the Government, the type of wealth tax proposals, the politics of envy as I keep referring to it and that is all you could refer to it as.

Some of the countries in Europe have a wealth tax but to assume that we are of the same development standard as they are would be a gross misuse of the imagination. We are in the EEC with nine countries. Instead of proposals of a kind which will make us equally unattractive to industrialists, we should be offering every incentive to home and foreign industrialists to provide jobs, to create employment, to create wealth. The late Seán Lemass, God be good to him, had an old saying that in a rising tide all boats rise. If there were a strong economy here, strong employment and investment, everybody would get a share of the national cake. With the growth of the cake, the share would get larger. But you have a situation here where you have a contracting economy, demonstrated by the statistics, and consequently the share becomes smaller.

We are not at this stage in our history ready for a wealth tax. In my opinion we will never be ready for a wealth tax. I am opposed to the basic principle of a wealth tax. But allowing for the Government's opinion that a wealth tax is necessary some time, this is the wrong time. It is the wrong time in the wrong place, as the song goes. We have an under-developed economy, an economy which is contracting and there is a proposal from the Government to bring a wealth tax into that type of situation which will further exacerbate an already appalling unemployment situation.

What should we be doing? There was great talk at the time of the election about abolition of death duties and it was going to make us a very attractive proposition to industrialists and to people with money that they would not have to pay death duties. That was, of course, a hollow promise. It was removed in May and the inheritance tax was sent in in its place together with a wealth tax and a capital gains tax. The argument made for the abolition of death duties applies with greater force for not introducing a wealth tax. Leaving aside the wealth tax as it is introduced here with its penal clauses, of getting neighbour to tell on neighbour, and commissioners knocking on your door because they do not like the way you comb your hair or something else, the situation is that we are one of the weaker countries in the EEC with the highest rate of inflation. A number of years back, the Irish papers talked about the rate of inflation in Italy and the lira going into crazy tailspins. Of course, with the Government Information Service that we have one does not read of that sort of thing now in the context of Ireland because it does not make nice reading.

We should be making ourselves the most attractive unit within the EEC for foreign industrialists to come in but the packages produced by the Government are doing the direct opposite. We are becoming less attractive day by day, further exacerbating the unemployment situation. Nobody wants to see a deterioration in the employment situation despite the snide suggestions on the Government side when any of us speak about it that we are prophets of doom. If you include graduates and school leavers together with those on the live register, there will be a quarter of a million people unemployed before Christmas.

What have we got as Government proposals to deal with this situation? We have spent months talking about Government taxation proposals but there has been no incentive offered to anyone to come in and put a few bob into the country and get a factory going. It is all knock, knock, knock— the politics of envy.

I can excuse the Minister for Lands —I knew him first by reputation and I have known him since I have come into the House. He is an honourable man and he represents a party that have in the past supported the traditions of free enterprise and private enterprise—a mixed economy. I can have sympathy with the Minister for Lands because he is in a situation where the tail is wagging the dog. If the Fine Gael Party do not agree with the propositions put up by the Labour Party the Coalition will fall apart and no longer will there be ministerial cars. I am not saying the Minister for Lands is anxious to hold on to his portfolio for the sake of a State car. That would be unfair to the man and I do not want to be unfair to him because I appreciate he has the best interests of the country at heart. But, having the best interests of the country at heart, I would appeal to him and his colleagues in Fine Gael, to forget power just for power's sake and to think of the country. I am sure in his heart of hearts the Minister for Lands realises that at this point in time the best thing for the country is that this proposal for a wealth tax be torn up and thrown away and to invite in foreign industrialists, to let home industrialists invest again and continue to expand rather than stand still as they are at present. They should be given an incentive to invest money and to create jobs. Then we will all be well off. An unfortunate Fine Gael Party is being led by the nose by the left wing operators of the Labour Party. There are many honourable men in Fine Gael who do not like to see what is going on, including Deputy Dockrell who has already spoken on this proposal.

In the year 1975 discussion should be about inflation and employment If the Dáil is to have any relevance whatsoever to Irish life in 1975 its relevance must be to create extra jobs and eliminate the curse of inflation. If we are to judge from the legislative proposals of the Government they do not know inflation exists and they are unaware that we are heading towards a situation where over a quarter of a million people will be unemployed. What they are talking about is "take, take, take" from the section of the community who are prepared to invest their money and to create jobs. What are they getting in return for all the disruption and the problems they are creating for the business section of the community? I quoted a figure earlier of £3 million but I understand the Minister for Finance has quoted a figure nearer to a £1½ million.

I have the report of a Dublin County Council meeting of 9th June, 1975, and it is related to the case I am making. The council currently have overdraft facilities totalling £2 million. Revenue accounts for £1 million and capital another £1 million. The accommodation on the revenue account is required to carry the expenses pending the receipt of the rates and payment of recoupable items, mainly Road Fund grants——

(Cavan): On a point of order, if a filibuster is to take place I would respectfully suggest that the speeches made should be in order and should be related to the Bill. There obviously is a filibuster and I would ask the Chair to ensure that the speech is related not alone to the Bill but to section 2 of the Bill which is under discussion.

The paper I am quoting is related to the Bill and to section 2. Section 2 reads:

Subject to the provisions of this Act and any regulations thereunder, with effect on and from the 5th day of April, 1975, a tax, to be called wealth tax, shall be charged, levied and paid annually upon the net market value of the taxable wealth on the valuation date in every year of every assessable person and the rate of tax shall be 1 per cent of that net market value.

The suggestion is that we impose a tax. Having imposed a tax we are entitled to ask where the tax money will go. The document I was reading was the report laid before the county council. It says:

Our cash position has recently been worsened by the failure of the Board of Works to release a loan of £1½ million due on the 3rd June, 1975, against our Small Dwellings loan application of £7½ million for the first six months of this year. Total receipts to date under this heading amount to £3½ million in the current year. Due to the shortfall in the rates and the unanticipated delay in meeting our draw from the Board of Works——

(Cavan): This is completely out of order.

There is talk of raising £1½ million. If we had a strong buoyant economy rather than an economy which is suffering under the threefold burden of a wealth tax, a capital gains tax and inheritance tax, a situation would not exist where the Government were not able to pay £1½ million which they owe to Dublin County Council under the Small Dwellings loans scheme. A situation would not exist where the county council would have to borrow another £1 million on an overdraft. We have the ball at our feet. All that is required of us is to kick it over the bar. We have a strong potential for foreign investment and for investment by our industrialists. What incentives are there when a Wealth Tax Bill, a Capital Gains Tax Bill and an inheritance tax are imposed on us?

The Minister for Lands has suggested that it is an innocuous tax. It is a "fiddle diddle" tax according to Deputy Desmond, and affects only a couple of hundred people. It is chasing money out of the country; it is preventing money from being invested here; it is preventing investment by people within the country. Every £ that is not invested in industry is one more job lost.

Where will the school-leavers sitting their Leaving Certificate at the moment go? Where will they get jobs? Where have half of them gone from last year? Where are the 105,000 people on the live register at the moment? What is the Government's suggestion? It is a Wealth Tax Bill. A tax on what? There will not be any wealth left in the country if the present trends continue.

Let us not kid ourselves: the Government have the strength to put this Bill through. They have the numbers to walk through the lobby and vote against us. They will force this Bill through—not Fine Gael—but Labour, and Fine Gael are to blame for going along with them. The damage will have been done and the taxes will have been charged.

Will the industrialists not pass on this tax in price increases to the housewife who is already overburdened with price increases? Of course they will. They will not just accept a wealth tax each year and say: "That is unfortunate, that is out of our profits". They will pass it on to an already overburdened housewife who has to face the increasing possibility of her husband being out of a job. The Minister and Deputy Desmond can politely tell us: "It will only affect a couple of hundred people". To use Deputy Desmond's suggestion: "fiddle diddle" for that suggestion.

Coupled with the unemployment problem there is also the inflation problem. When this taxation is passed on to the housewife and the consumer generally it will cause extra inflation. The Irish Press of Wednesday, June 11th, carried a heading: “Secret Plans on Inflation”. “Cabinet Letters to Both Sides”. We should have sent them on a copy of the Wealth Tax Bill. That would have sorted it out. At a time when the Government are issuing secret letters trying to curb and cut back on inflation they are introducing legislative proposals which will further aggravate an already difficult situation. There is nothing in the threefold package we have before us that will not create further inflation. Inflation is directly related to unemployment. The higher the inflation rate the higher the unemployment rate. We have the highest inflation rate in Europe.

The catchword at this time, with the problems of inflation and unemployment facing us, should be confidence. It should be a feeling of confidence in our industrial sector, in our employees, in our work force. The housewife should have confidence that when her husband comes home on Friday evening, he will not have to tell her he is on a three-day week or that he has become unemployed. The business community should have confidence in continuing to expand and create new jobs, as they had confidence prior to 1973 before the change of Government.

I do not want to hear about oil sheikhs or anything else. Every country in Europe has recovered from the effects of the oil crisis except ours. When the Government Information Service have nothing better to do they hark back to the oil crisis. Every country, except Britain, who is the sick man of Europe, has got over the oil crisis. Our Government still fall back on it because they do not like bad news being given to the public. One cannot keep bad news from families with children trying to find employment and fathers being thrown out of jobs or put on a three day week.

We should be encouraging increased investment, not imposing a wealth tax. The Taoiseach was quoted recently as saying—of course, it was changed by the time it appeared in the newspapers the following morning—that we were living on borrowed time and we would have to do something about it. This is the Taoiseach of a Government bringing in three Bills which will shorten the bit of borrowed time we have.

I should like to relate the effects of this Wealth Tax Bill to my own constituency of North County Dublin. In this evening's papers we read that Aer Lingus had a £4 million loss this year. I had the pleasure of accompanying an Oireachtas deputation out to Aer Lingus last week. We heard of their problems for the coming year. Relate these to the Wealth Tax Bill and the other capital taxation Bills before the House. If we had a strong economy, if we had movement on the part of the business community, if we had people going abroad on holidays, people using the airport, flying to and from Europe, and industrialists coming in here, Aer Lingus would not be facing the problems they have to contend with today. Many of the causes of their problems are outside the control of this Government. I admit that. There are economic problems in America and elsewhere, but there are many things we could be doing to assist Aer Lingus. What are we doing? We are bringing in, as part of a threefold package, a Wealth Tax Bill which will result in a lack of investment here and inhibit movement on the part of the business community. That will mean fewer passengers and less freight for Aer Lingus. Every vacant seat and every loss of a ton of freight makes problems for them. Aer Lingus have made a wonderful contribution to the economy of North County Dublin. A number of people in my constituency work in Aer Lingus and are affected either directly or indirectly——

(Cavan): Again, I must draw the attention of the Chair to the fact that the Deputy appears to be totally out of order in discussing a matter that is in no way related to the section, not even remotely, and I must ask that the Chair would enforce order.

Acting Chairman

The Chair is the judge of order, Minister, and will maintain that type of order he thinks relevant to the debate. This is a wide-ranging section. It is a section under which tax is imposed on global or worldly wealth. What is the definition of worldly wealth? Regrettably, the debate is widened because of the scope of the section.

(Cavan): I would respectfully suggest to the Chair that, whatever else——

Acting Chairman

The Chair takes the view that the debate is wide-ranging and is not, therefore, easily curbed.

(Cavan): I would respectfully point out to the Chair that the workings of Dublin Airport do not seem to come in any way within the scope of this section.

I can appreciate the embarrassment of the Minister when the problems of unemployment in any area are brought before him, a member of a Government which came in a short two years ago in a healthy employment situation and changed that to a situation in which we are facing the prospect of almost a quarter of a million people unemployed. I can understand why the Minister raises this point of order. If I were on the Government side, I would probably feel the same way about it but, even if I were on that side, I would not be a party to introducing legislation that is going to exacerbate further the unemployment situation. The Fianna Fáil record on unemployment is second to none.

We have a boatyard in Malahide in North County Dublin which is facing difficult problems because of raging inflation, the highest inflation rate in Europe. This boatyard can be helped if the Government take some action to reduce the rate of inflation. Almost 100 per cent of their orders are export orders. With inflation running at its present rate, their effectiveness on the export market is consequently reduced. What action are the Government taking? They are saying that in section 2 subject to the provisions of this section and any regulations made thereunder, from 5th April, a tax to be called a wealth tax shall be charged. This will not reduce inflation; this will increase it further. We know that unemployment is directly related to inflation. The higher the rate of inflation the more unemployment there is.

What I say about Malahide can also be applied to Balbriggan. Wavin, Technicon and other companies are all suffering from the critical illness of inflation and all we are getting is Government lip-service which says: "We must reduce inflation. We are trying to reduce inflation. Come and talk to us and, perhaps, somebody will come up with a bright suggestion which will save us making a decision. Inflation might just go away and stop bothering us". Every housewife knows inflation is rising. Every time she goes out to shop she sees what is happening. This Wealth Tax Bill will increase inflation still further, rather than reduce it. We should be trying to reduce it. If the Government have any concern about the inflation rate and the unemployment situation they should be introducing proposals to remedy them.

The explanatory memorandum says:

Section 2 imposes the charge to wealth tax at the rate of 1 per cent, and provides that the tax shall be charged, levied and paid each and every year on and from April 5, 1975. Tax is payable on the net market value on the valuation date of the taxable wealth of an assessable person. There are three assessable persons, namely, the individual, the discretionary trust and the private non-trading company, each of whom is a taxable entity. The market value is ascertained in accordance with sections 8 and 9 and the net market value is arrived at by making certain allowances for reliefs from that market value and for debts in accordance with the provisions of sections 10 and 11.

Section 8 (3) provides:

The market value of any property shall be ascertained by the Commissioners in such manner and by such means as they think fit and they may authorise a person to inspect any property and report to them the value thereof for the purposes of this Act and the person having the custody or possession of that property shall permit the person so authorised to inspect it at such reasonable times as the Commissioners consider necessary.

There is no ground for debating section 8 now. The Deputy will wait until we come to the section.

It is mentioned in the explanatory memorandum and it is also mentioned in section 2 and it is relevant on how the net value is ascertained.

There is no ground for debating it now.

I bow to your ruling but I think it is an appalling situation that one can have the valuation officer knocking on the door in the middle of the night to count the knives and forks and see exactly what is in the house. In regard to any tax, it should be related to an individual's or a company's ability to pay the tax out of profits, out of the money earned, be it a weekly wage or a monthly salary.

The guiding principle should be that if you make £X you are liable to pay a percentage of that sum to the State. We must have tax to keep the country going but that is not what is included in the wealth tax. This Bill says even if you lose money in a particular year, if you have a bad year on a farm or if you have a bad year in a business, you still pay the wealth tax. If this is not the straw that breaks the camel's back I wonder what is? There are many companies struggling at the moment for survival and the Government are suggesting the wealth tax which the Minister very rightly says does not relate to private companies but it relates to the shareholders of such companies.

(Cavan): The worse a company does the less that will have to be paid because the shares will be less valuable.

There are many family owned companies split between members of families and their shares in the company, even if the company are not making money, will be liable to tax. A shop on the main street of a town might not be doing very well but the value of the premises will affect the value of the shares in the company. The owner of the shares is liable for the tax on the share value even if the company are not doing well. The company might have some chance of improving and creating employment but if they have to pay wealth tax on top of the other taxes they have to pay there is no great likelihood of this happening. We all know the extra expenses businesses have been forced to pay because of this Government.

The Minister said earlier that farmers do not have to worry about the wealth tax because the threshold is such that £200,000 and 50 per cent value is taken into account. Deputy Desmond gave the lie to this particular view held by the Minister. Deputy Crowley, when speaking earlier, made the point that we have the wealth tax and it might be only 1 per cent now and the thresholds may be a certain figure but once the Bill becomes law this can be changed very easily. During the Second Stage debate Deputy Bermingham, a Labour Deputy, also made the same point on the 5th March last.

(Cavan): On a point of order, repetition is obviously out of order. I have been sitting here all day and the particular point the Deputy has now made has been made at least ten times. This has been repeated ad nauseam.

The point was not made by me. It was made by other Deputies. Deputy Desmond nailed his colours to the mast and said that the Bill was brought in in a fairly diluted form so that it could be sold to the IFA and others but once the Government had got it the sledge hammer would come in and the thresholds would change. That is basically what he said. I believe when the Government are stuck for a few pounds they will change the thresholds and the percentages in relation to this wealth tax. They have not paid Dublin County Council the £1½ million they owe them. If the Government are stuck for money in the autumn and this Bill is law by then they will come in and change the thresholds and the percentages. It will be like last December when the Government were stuck for £30 million and the Minister for Finance came in to the House and by the stroke of a pen he increased the price of petrol by 15p. We all know he will increase the thresholds on farmers and change the percentages from 1 to 2½, which was what he had in his mind in the White Paper. He had to back down from his original suggestion because of the criticisms he received all over the country.

I appeal to the Minister, who is standing in for the Minister for Finance, to go back to the Government and ask them to realise what is being done to the economy by this proposal. He told us that it will bring in £1½ million but the damage it will do to employment is far greater. Unemployment figures are almost 105,000 and school leavers will add about 50,000 to that. Economists have told us that later in the year the figure is likely to reach 160,000. When the school leavers of last year, who have not got jobs, are added to that figure it will reach almost 250,000. Lack of incentive to industrialists, whether foreign or home based, will create further unemployment. I appeal to the Minister to realise the unemployment potential of this Bill and also the inflationary elements in it. I also appeal to his colleagues in the Fine Gael Party to press the Government not to impose this further crucifixion on the people of Ireland.

(Cavan): The principle of imposing a wealth tax was accepted by the House on the 12th March, 1975, when the Second Stage of this Bill was passed after a protracted debate. That established the principle of imposing a wealth tax. We are now discussing section 2 of this Bill, which is the section that imposes the tax. It is significant that there was no amendment down to this section.

This is a Committee Stage debate, the purpose of which is to amend, where it is thought necessary or desirable, the Bill which was accepted in principle by the House on the 12th March last. I rise simply to make the point that what is taking place now is a filibuster. It is an abuse of this House. I want to put that on record to let the House and the country see that this is sheer obstruction. Most of the Deputies who spoke today had not even read the Bill. They made Committee points they did not understand. Deputy after Deputy came in and repeated parrot-like what some other Deputy said, which was obviously dchurned up somewhere else. I want that on the record so that the people will know about it.

The Minister is aware that an effort was made to have this Bill dealt with by a committee of the House.

(Cavan): We put that proposition forward but it was not accepted.

Because of the effects of this tax we were not satisfied to allow it to be dealt with by a committee. We were anxious to express our views in this House and, as representatives of the people, we were entitled to do so. Is the Minister saying that we did not have that right?

(Cavan): It should be done in an intelligent way and in a way appropriate to Committee Stage of a Bill.

That is for the Chair to decide.

I do not think the Minister is the person who should judge intelligence in this House. The stark reality of section 2 is that it introduces a new tax and that message should be got home to everybody. I do not think we ought to introduce such a new tax at this stage in our development. If section 2 is passed it will hinder progress and initiative. Government Deputies have argued in favour of this tax on the lines that because other countries have it we should have it. The fact that other countries operate this tax is no reason why we should introduce it.

Have we not got sufficient measures at our disposal to enable the Government to obtain money by taxation? Deputies on the Government side implied that it was wrong to have or to create wealth. I do not think any fair minded person would accept that argument. There is nothing wrong with a person being successful and it is good to see industries creating more jobs and the standard of living of our people being improved. The effect of this tax will be that if shareholders of a company make a profit, even if they wish to plough that profit back into the company, it will be less a 1 per cent deduction for wealth tax.

(Cavan): This Bill has nothing to do with profits.

The wealth tax will also limit the inflow of capital by foreign investors at a time when we need all the money we can get from abroad. That money is needed to help us readjust and bring back a standard of living we were used to two and three years ago. We ought to foster companies and aid individuals who can generate wealth and create employment. In this regard it is not a good argument to put forward that the concessions are good and the rate is low.

We got an insight into Government thinking in regard to wealth tax when Government Deputies pointed out that it would be easy to increase the threshold. They expressed the view that they would have preferred it to have been higher adding that they accepted the 1 per cent but that there would always be another round. Are they hints of what is to come? Why are we not dealing with legislation which would have the effect of reducing inflation? It was always the desire of my party to create jobs for those who had to leave agriculture, not only to absorb those who were leaving school, but also to continually pare away the number of those who are unemployed. This is the record we advanced against what the Government advances under section 2 of this Bill.

There is no need for me to remind people of the situation and to prove how this policy works. The figures of unemployed alone prove it: approximately 68,000 unemployed in March, 1973. This a spring month, and now in a summer month, when unemployment should be at its lowest, it is at a peak, I hope, but I am afraid we still have not seen the peak.

(Cavan): The previous speaker anticipates a quarter of a million.

Perhaps the previous speaker is right but it is not for me to judge. However, at the moment it is some 103,000, over three people out of work for every two—if you want it in simpler terms—when the Minister's Government took office.

Where will the school leavers go? I do not want to labour this point, because I can appreciate the difficulties for intending school leavers with examinations upon them. They are aware of them because they are more educated to the facts. In considering this Bill and section 2 of it, my mind went back to a tragedy of some two years ago which saw the leading industrialists of our society die. It was most regrettable. These were members of the Confederation of Irish Industry. At that time we felt a huge personal loss, but there was also a feeling of depression and anxiety throughout the nation that we had lost many of the best brains, many of our entrepreneurs, many of those who would do good for our society. There was a lack of hope there for a while. Therefore, to those who say the plain people of Ireland welcome this wealth tax and section 2, in particular, I say they do not and that their feelings were really exposed at the time of that dreadful tragedy. People ought to ponder this point before they rush headlong, further wrecking the economy, with measures such as these. If these men were still with us I believe they would be shoulder to shoulder with our colleagues in the CII saying: “No, not at this time. A wealth tax is not appropriate at this stage of the development of the country”.

In talking of wealth, we ought to consider that the wealth of this country is our people. People are seen to best effect when they are working. I challenge the Minister to say that this measure, which is taking up a lot of the time of the Dáil, will create something new by way of employment, by way of making our people happier, more content, so that they can be more creative. This tax is premature, being brought in at a time of complete lack of confidence in the economy.

Might I ask the Minister for Lands to listen carefully to the views of this House, not to adopt the attitude he is adopting, that we are here with one aim in mind, simply to filibuster? This is not so. I am here, and I know my fellow Deputies are here with one intention, to see that good measures are introduced and that further hardships will not be brought to people's doors. It is not my intention to filibuster.

The rules of this House would allow me to speak again on this stage, but I shall conclude by asking the Minister to please change his view of Opposition speakers at this time. Let us see some open Government rather than the shop-window-blocked-up effort. He should listen to our views. He is here representing the Government and more particularly in the place of the Minister for Finance. I hope he will have a good chat with the Minister for Finance on the Minister's return from his important visits in Europe and not say simply that the Opposition created a filibuster. We speak as responsible people who are opposed to this measure at this particular time in the growth of our economy.

I rise on this section because I have something to say in regard to the wealth tax. I feel I have a right to say it and that I am not abusing the privilege of the House in any way. I can safely say that never before in my short time as a Deputy for Kildare have I been exhorted by so many people to make their views known on this matter in this House. Scores of constituents of mine, not all of them supporters, have asked me to express their views, and I mean to do that. Possibly they are aware that their representatives in the Fine Gael and Labour Parties whom they have sent to this House will not express their views here. I can assure the House that the views I shall express are my own. They will not be parrot-like, because I have never had occasion to ask anyone to write or make a speech for me. While what I have to say may not be very palatable, it will, I hope, be intelligible, if not to the Minister at least to the people I represent.

A wealth tax is to be introduced from 6th April, 1975. In the explanatory memorandum we are told that the reason for the introduction of this tax is to implement the proposals of the White Paper on Capital Taxation. This indicates to me that this tax is being introduced because there is a conglomeration of parties in office at the moment who feel they must keep their promise no matter what the price. This is the product of two sections that are acting in discord, and it is obvious to me that the two components of this Coalition can never act in complete harmony. One of them has communistic leanings and its avowed object is to distribute the nation's wealth and it is obvious too that the other party must tag along, making sounds and signs with no action, to placate them. It is obvious to me that if this policy is pursued and if by any mischance the present administration continues for very long more, there will be very little wealth to distribute in this country.

The country is in dire straits and at this stage, with inflation and unemployment—possibly this has been repeated ad nauseam, but we cannot repeat this often enough—when you have a country in the dire straits this country is in, strong measures are needed to rectify the economy and make the wheels turn again, but a weak Government is not prepared to take strong measures and if it is the fear of being said to have backed down which will not allow them to do what they should it is high time the Government remembered that the country should come before party and perhaps the leader who is referred to as the person who places the nation first might put the nation first with regard to this section, as he did on the night he voted with us on the contraception issue, but I fear that personal thoughts will not allow them to do that.

It would be well to ask ourselves at this stage if this tax is needed at all at the moment. Even since this tax was first thought of and when plans for the production of the White Paper were being mulled over, there has been a distinct change in atmosphere and climate, and I note with a certain amount of pleasure that the proposals have been modified. The modifications have been made by reason of representations received from individuals, corporations, organisations and others, and I can well understand that there must have been shoals of representations with regard to it. We should ask ourselves what is the plan of the Government in introducing this tax. Is it to collect taxation? The amounts mentioned here very from £1½ million to £3 million, not a very considerable amount for such a very stern measure. Is it possible that their attitude is that they have decided that they will do away with wealth altogether, whittle away the wealth, if you can call it wealth, of those who come within this bracket?

I say to the Minister and the other members of the Government that therein lies the main difference between the policies we have pursued so successfully for many years and the policy they are now pursuing. Their policy in relation to this section will have the effect of dragging those who are up down to the level of others, while we pursued a policy that succeeded in uplifting people, and I am sure that those who take time off to view the situation and compare it with the situation which we handed over something over two years ago will find the change saddening indeed. Fianna Fáil policy was one that uplifted the people but the present policy will have the effect of dragging everybody down.

I noticed that Deputy Crowley mentioned that there was no protest from the IFA. I suppose he was referring to the fact that when our Government were in and certain things were happening which the IFA, or the NFA of that time, did not agree with we had considerable protests. I can assure Deputy Crowley that I have had many representatives of the Kildare members of the IFA with me and as far as the farmers of Kildare are concerned—and I am sure that any Minister visiting Kildare in the near future and even the Taoiseach may be well aware of this by now— will find that the Kildare farmers are up in arms with regard to this tax. I have had representatives from the county executive of the Kildare NFA and their organisers and individual members and a deputation from south Kildare with me, and I have spoken to my own neighbours, whom I would not class as my supporters up to now —they have been of a different party —and they have told me that they are very disturbed by the implications of this tax.

I can assure the House that never before in regard to any measure have I heard such an uproar as I have heard with regard to this tax. It is generally felt that the National Coalition Party must be gone mad at this stage of our development, in the economic situation as it stands, to bring in such a measure, and the only excuse that the diehards who support the party the Minister represents will give for bringing it in is the tug-of-war which must go on in the Cabinet between the two conflicting factions, but the result is chaos. I am reminded very much of a book which I have been reading lately called Mao Tse Tung and I were Beggars. One was a student and the other a teacher. They went on a month's tour through China and Mao Tse Tung was a student. Even though the two people were of different natures and different ideologies, they seemed to get on pretty well for a time, although they did part later on. I can see a marked resemblance between the present tour of the third Coalition Government and the student and teacher who were involved in this tour.

Is it not madness to think that when our little country is falling apart about the ears of the Irish people this Bill is brought in? Above everything else, I maintain that the effect of this clause and the introduction of wealth tax will have the effect of undermining the very industry which is the foundation of all Irish industry and all successful industry in Ireland, the farming industry. It has been pointed out by people on the opposite side that this is a fiddle-diddle tax that will not affect many people, but I want to point out that a widow with two dependent children whose wealth is valued at £200,000 will be allowed to deduct 50 per cent of her agricultural land to a maximum of £100,000, leaving £100,000 due for wealth tax. She will get a widow's allowance of £90,000 and £5,000 for two dependent children at £2,500 each, leaving £95,000.

(Cavan): What about the house and contents?

She will still have £5,000 liable to wealth tax at a rate of 1 per cent at the moment. This very section, relating as it does to every assessable person, will have a disastrous effect on the farming community in so far as those who are engaged in contracting work are concerned. There will be a distinct disincentive for farmers or their sons to engage in contracting work because of the dangers of the taxation and their allowances will be halved. I can foresee a situation where only those who are professionally engaged in contracting work and charge a much higher fee and work strict union hours will take on combining and silage cutting, and small farmers who may not come within the scope of this Bill directly will be very severely affected indirectly by the consequent increase in contracting charges, and they too will be forced to pass on this increase in their milk and beef supplies and all other agricultural products and we will again see a situation where the madness of this Government will drive up prices and we will eventually price ourselves out of the world market.

No matter what anybody says about amendments tabled to this legislation the items that originally appeared in the Bill, it would be reasonable to expect, are the original thoughts of the Minister. It was and is still held that if the Revenue Commissioners feel that a neighbour of a person being caught for wealth tax is witholding information, they will give him 30 days to supply that information and if he refuses to supply it, he will be fined £1,000 plus £50 per day after 30 days are completed. The word that has been bandied about—with good reason I am sure—is "neighbour"; everybody comes within that category. I think that shows the original thinking of the Minister when he put this informer clause, as I would call it, in the Bill.

The particular date mentioned in the Bill is 5th April. Farmers in certain parts of the country buy cattle in October and possibly keep them on silage and sell them all before 5th April. The money would be put in the bank and if it represented more than one-quarter of a farmer's wealth at the time he would not be classed as a genuine farmer. That point deserves mention.

There is no inflationary clause in the Bill. I know there is nothing to prevent the Minister from raising or lowering the threshold but inflation is now running at such a rate that everybody is conscious of it and those who are not caught for wealth tax this year will see themselves caught for it next year or the year after unless there is an inflationary clause in the Bill. Obviously, more and more farmers will be caught each year if this clause is not included. With the present inflation rate of over 20 per cent, one can see this matter will have to be examined and the farmers met in some way.

The present rate of tax is 1 per cent. Business people usually consider a rate of 10 or 12 per cent reasonable and those with money to invest in a bank could easily get that return. It has been proved to my satisfaction on figures from the Institute of Agriculture that the return from capital investment in agriculture is approximately 2 per cent. If you were very successful it might range between 2 and 3 per cent. If we take away 1 per cent in wealth tax, it will leave very little for reinvestment in agriculture and more than ever now we need massive investment in agriculture.

Nothing brought this home to me more than a recent visit to England where I travelled on the M1 and saw English farms for the first time. I could see the product of 1,000 years of uninterrupted progress there. Much of what we would like to see on Irish farms has already been achieved there. Therefore, there is no comparison between the two countries or between Ireland and countries such as Holland and the EEC countries whose farmers are possibly the best in Europe. We want to encourage people at this time but this measure is only a discouragement to anybody to improve his lot in farming.

There is a difficulty about the valuation to be placed on land. Irish farmers are at a disadvantage compared with their EEC counterparts. There are no rates on agricultural land in England but there are rates on it here. Because of our geographical position Irish farmers must pay more to transport their goods to the EEC.

(Cavan): British farmers pay income tax.

So will our farmers. This Government have rectified that. The Minister may be able to elucidate this point. An accountant who has information is supposed to make it known. Up to now, it was always felt there was need for secrecy in the case of the legal profession and their clients. Will that secrecy still be observed if this informer clause is enforced? I believe it will have to be either removed completely or considerably watered down if it is to be acceptable to the people.

The principle of this Wealth Tax Bill appears to be wrong because it can be changed at will; the threshold can be lowered. There will be no incentive for private enterprise; it will help to stifle any venture in that way. People will endeavour not to expand their businesses or holdings any more than the threshold for wealth tax. I hope an inflationary clause will be introduced and that something will be done regarding the difficulties that face small farmers forced to rely on contractors. When we consider all the difficulties, will the end result be worth the candle? Will the measure bring in enough money to warrant the imposition of this tax?

As a direct result of this proposal I have seen substantial holdings for sale in Kildare. In my own county I know of somebody who will now be paying wealth tax as a result of this Bill. He is already paying death duties and it is likely that this man who built up his herd of cows from four to 16 in a few years, who is up to his ears in debt with the ACC, will be paying death duties which arose under our Administration and wealth tax and income tax under the present Administration. While the short term effect of the measure in bringing in a certain amount of money may appeal to the Government, the long term result will be disastrous.

Having shown that capital investment in farming brings in an average income of 2 per cent, I need scarcely say that there will be less incentive for people to invest or stay in farming and more likelihood of them selling out. City people or people with an urban mentality might be under the impression that only the very wealthy will be affected by this Bill. Many people with large holdings and who are engaged in a system of beef production will come within the ambit of the Bill. Beef production is very necessary to our economy and any falling off at that level would have its effects down along the line to dairy herds, calves and so on. While beef production has always been satisfactory here it must be conducted on an extensive scale but, sadly, this proposed tax will inhibit this aspect of farming.

The Minister is making no provision to cater for inflation. Neither is there any provision to cater for the consequences of a bad year. This year, indeed, may be a very bad one in which to introduce a measure of this kind because certain matters are occurring now in respect of which the farmer has no control but which could have a disastrous effect on his income. However, if he is assessed at a certain level he will have to pay wealth tax regardless of any reduced income he may suffer. There has been no crop or grass growth during the past month. This may result in a serious recession in the industry and in a glut in the meat market as a result of the vets' strike. Apart from the absence of these provisions the date being fixed for payment is one that comes into effect before the legislation is enacted. It has been suggested by this party that the date should be changed. I trust that on his return the Minister for Finance will at least accede to that request.

We have a long way to go before reaching the stage of inputs into farming that we would wish for. This measure will have a disastrous effect on the industry. In saying this I am conveying the thoughts of ordinary people in my county who have worked hard at farming. Some of these are people who up to now supported this Government but even they are convinced that this measure is an act of lunacy.

The Bill, too, contains some inconsistencies. For instance, it would appear that, as a result of it, two people who would live together without being married might enjoy a greater allowance than another pair who regularised their union. Also, a man who would marry a business woman, say, a hotelier, would find that his wife's assets would need to be less than a quarter of the threshold if he were to be classed as a genuine farmer.

There is the possibility, too, that land near a town could be loaded with a 25 per cent extra valuation. If the land in question is used for agricultural purposes, obviously, it would produce no more than, and possibly less than, land in a very rural area especially when one considers that land near a town is subject to a much greater amount of trespass by way of dogs and of the dumping of refuse and so on than is land in other areas. A farmer would need to have his combine harvester set very high before beginning to cut a crop in such places. It might well be that land in Kildare in the vicinity of the dual carriageway would be valued at £3,000 per acre for wealth tax purposes. In such case a farmer would seem to be caught in a net from which there was no escape because if the land is valued at a low rate, he could be caught afterwards for capital gains tax. The trinity of taxes being processed appears to be much more penal in their implementation than were estate duties. Some people with whom I have spoken told me that they would be prepared to settle for a tax of the estate duty nature but which would keep pace with inflation rather than to have the taxation code proposed here. The introduction of a gift tax at a lower rate to counteract what might be lost by the evasion of estate duty would be more attractive to many people than the tax we are discussing.

This country needs whatever investment it can get, but instead of encouraging people to come here the Government are enacting legislation to keep them away. There would be nothing wrong with a situation in which Ireland would be classed as a tax haven. Ours is a very small country—some might say, insignificant. Our economy is weak and we have a very high inflation rate. This Bill would be very difficult to administer. It is my opinion that it will treble the present staff administration.

Farmers accepted the principle of income tax. I am glad to say that members of the IFA who have approached me found this principle acceptable but they are not prepared to accept this form of wealth tax. I understand that it has been pointed out to members of the IFA who have attended seminars that if one can prove one is not domiciled in Ireland there is much scope as far as this Bill is concerned. At least the Kildare farmers went home with the impression that aliens would get preferential treatment to a greater degree than they ever got before.

It is sad to note that this measure is being brought in at this time when one thinks of the change there has been in our economy in the past two years. In 1973 all was going well but today the pattern is very different. This week two of my sons are sitting for examinations. Two years ago the prospects of their being employed in their own county were bright but there are no such prospects now. A couple of years ago, too, I spoke with the personnel manager of one of our factories and he told me that business was booming, that there were great plans in hand for increasing production and for embarking on new lines. Today, with the aid of very good management, they are very fortunate to be able to retain their existing staff but unless there is some change soon for the better, this will not be possible. Irish Ropes is one of the few concerns that have been able to maintain their staff level.

Everywhere I go I am asked, not only by my supporters but by those who up to now supported the Government, whether there is any hope of putting this crowd out.

This is section 2.

I see, Sir. It does appear that the Bill may do good in that way because in the long run it will have the effect of removing the Government that introduced it. That is the only good thing I can see about it. Then we will try to clear up the mess.

What is necessary now is a move that would give people a certain measure of confidence and hope in the future and a sound base on which to plan for the next quarter of a century. A wealth tax will not do that. A wealth tax, we are told, will bring in, not £3 million, but simply £1½ million. It will help to run down the economy. I have every reason to believe that already it has frightened away millions of pounds of investment capital. Mention of the wealth tax and the other taxes has frightened money out of Ireland and has stopped money from coming in.

During the week, when we were speaking about the betting levy Bill the Taoiseach refuted the allegation that I made, but I have every confidence in the information given to me by a well-known horse trainer who numbers among his patrons wealthy people who have considerable investment in this country, people who are au fait with fiscal matters and who would know what happens in the higher levels of finance. He has told me that the first week this measure was introduced millions of pounds were frightened out of the country and millions of pounds will continue to leave the country as long as these measures are in operation.

It would appear from the Bill as it stands at the moment that this tax will increase the charges farmers in tillage will have to pay for combine work and farmers in milk will have to pay for silage work and that will be passed on to the consumer of agricultural produce.

I should like to deal with the thinking behind the Bill. The concept could be said to be sharing—sharing everything equally. This is something no country has succeeded in doing to anybody's satisfaction. Russia, which may be classed as the ultimate in measures of this kind, has proved to be a monumental failure. Anyone who is familiar with what goes on in Russia will know who shares what there and how people who are in a certain bracket can get preferential treatment to others. I made the point before that if all the wealth of the country were shared equally this week it would be necessary to have a further share out the following week due to somebody's misfortune or flutter that went astray.

We are the party who have always stood for free enterprise and open trading. Before the last election the White Paper would be directly involved in this—the party the Minister represents promised that a form of taxation related to the ability of the person to pay would be introduced and Fine Gael in Government would abolish estate duty on property passing on death to widows and their children and replace it with taxation confined to the really wealthy. Many people in my constituency who do not feel they are really wealthy now see that they will be brought into the tax net.

(Cavan): Very few people do feel they are wealthy.

Those who feel they are wealthy today feel they are poorer tomorrow. That is a tendency that has crept in recently. I feel poorer on this side of the House than I did when I was on the other side of the House, and there are more reasons than one for that. They now see, even though they would not class themselves as in the wealthy bracket, that they will be caught by this trinity of taxes and that the farming community in particular will be caught.

It is no harm to remind those who voted on the basis of that promise that they cannot divorce one section from the other in this. They were reminded that if they voted for one party they were to give their preference for another. There would appear to be no difference between the two parties now. We have a proper policy in our party that is geared to the needs of all the people whether big or small.

Farmers have come to see me in Kildare. They have seen their Fine Gael and Labour representatives. They asked that we would stand up and express their views on this Bill. I hope I have done that. They wanted to know what we could do to persuade the Government to change these wealth tax proposals.

At the risk of the Chair being repetitious, on at least three occasions the Chair has said that on sections of the Bill Deputies should not make Second Reading speeches.

I have been asked after the Second Stage to make people's views known on this Bill. I know that the other representatives for my constituency were asked to make their views known. Perhaps they have done that in private. Maybe some of the changes can be attributed to their good work behind closed doors. The people who asked them to make their views known hoped that they would do so in public and that their part would not be simply a walk-on part, that they would just walk in when the bell would ring; that they would make the views of their constituents fearlessly known in the House. Their constituents gave them many lines to say. I hope they will not forget them.

In the budget, when it was first mentioned that a wealth tax would be imposed, it was suggested that 10,000 people would be brought into the tax net for the first time. The Labour representative for Kildare expressed the view that this was good—good— and since that he has expressed an opinion with regard to this taxation that 1 per cent—1 per cent is mentioned here—is not sufficient. I would hope that he would come in and tell us more about his views on this matter. The Minister for Lands, Deputy Fitzpatrick, has commented that this viewpoint has been repeated ad nauseam in the House. While it may have been repeated ad nauseam as far as the Minister was concerned, the people who have been really nauseated are the farming population of Kildare who voted for the party the Minister represents the last time and were asked to vote for the Deputy I refer to as another preference.

It shows the thinking behind the Bill when two Labour representatives who have spoken on it have indicated in one case that 1 per cent was not enough and in the other case that it would be easy to adjust the wealth tax later. This is an indication that this is the beginning of the taxation and that thresholds can be lowered or the percentage can be increased later.

This wealth tax will be a deterrent to the provision of new jobs. It is hardly necessary to say that it could not have been introduced or implemented at a worse time when thousands of jobs are being lost. We are told that for 20,000 jobs lost today, 16,000 new jobs were created. What is necessary is to create a climate helpful to the creation of jobs. That means an investment of money. I should like to hear the IDA representatives tell us of the position with regard to persuading people to invest in Ireland since this measure was introduced. Has it been more difficult to encourage people to come here? I am sure it has not been easy. There appears to be a slowing down in this matter.

As a result of measures such as this our credibility has been lost and confidence in the country has been eroded. People are inclined to think this is not the ultimate in taxation which the present Government will implement. They say it is the beginning of taxation and they wonder what will come next. There is nothing to prevent a change. A promise that was made with regard to a tax on mines has been changed, and it will be very easy for the present administration to make other changes also with regard to other taxes.

Will the Minister indicate if he is prepared to agree with our proposal that the date of 5th April should be changed to 5th October? It is a sensible suggestion——

(Cavan): We voted on that yesterday. The Deputy was present and he cast his vote when there was a division.

The Minister will not agree to the suggestion?

The Minister and the Government have entered into this discussion with closed minds and any suggestion, irrespective of its merits, that comes from the Opposition will not be acceptable. Do the Government not realise that people whom they class as wealthy will have to sell a piece of their land each year to pay this tax? It will slow down their efforts in many lines and some of them will get out completely.

It is easy to prove that any country which has been progressive has not adopted taxation such as this. I would classify America as an example— maybe not today—of a country that has progressed in a century and a half from a wilderness to prosperity, as an example of what free enterprise can do in an economy. If we want to promote any initiative we must give a reward for extra work, but this Bill has the effect of stifling initiative. It is geared to drag down rather than uplift. All sensible people, in many cases supporters of the Government, have asked me to impress on the Minister and his party that they want this legislation scrapped. I speak as a man with very little of the world's goods but I represent all types of people— big farmers, small farmers who will not be caught for years by this legislation but who are aware of the effect it could have on contract work, and factory workers who have seen the effects of legislation that has been introduced.

More than two years ago when we were in Government I remember remarking in this House that industry was booming in Droichead Nua and the present Minister for Agriculture said it was starting to rock. I told him it was rocking round the clock and that industry was booming, but that situation does not exist now.

Legislation that was planned in a situation of full employment and wonderful prospects is not so enticing or palatable to the people today. We are in a period of intense recession. Last March we were told we could expect an upsurge in the economy at this time of the year, but the upsurge did not come. We are still experiencing the downturn; we do not know if we are at the pit of the scale although I hope we are.

Everyone in the country who is concerned about the economy says it is time the Government stopped this madness and gave up this legislation. I include in this road workers who have very little money, who are out with hooks cutting the grass verges at the sides of the roads where last year they used some type of mechanical aid; professional people such as doctors who have arguments with the Government; veterinary surgeons who are in trouble with the administration; nurses; doctors; teachers; small shopkeepers who are ground down with tax. All these people are sincere and honest and they are concerned about what the Government are proposing here.

Members of this House must have misgivings about the direction of the economy under the present Government. In the history of our nation no Bill has created more difficulty or depression. Yesterday and today we discussed the position of the footwear industry. This is a time when we should be encouraging every possible investment in order to create employment. Experts have predicted that a further 25,000 people will be out of work by October or November. We must also take into account the great number of school-leavers who will be unable to find employment.

In themselves taxes are necessary and when they are applied judiciously they can be to the benefit of the people. The Government have said that this is a tax on wealthy people, but no Government can catch the really wealthy because they keep their cash in a liquid form and they can move it from one investment to another. It must be obvious to financial experts that the level of cash which our commercial banks are required by law to hold has reached a level much below the safety margin. This is due to the removal of cash from the country. This should be a danger signal to the Government to re-examine the path they are treading.

The effect of extreme taxes imposed in the past on industries, particularly on food and other necessities, has been disastrous. Last evening I listened to the Parliamentary Secretary to the Minister for Industry and Commerce trying to explain why our boot and shoe industry is to some extent phasing out, indeed heading, I believe towards complete extinction. The argument was that our people were not being competitive; they had not tried to capture markets. I doubt if that is true in any walk of life; it is certainly not true of the boot and shoe industry. This industry was established away back in the early years of this century, established before the State was founded. There was a famous boot and shoe industry in Killarney. It produced an excellent product. It is now in dire straits and so is the factory in Tralee. It is a sad state of affairs. How is it that, with all our alleged ability, we cannot get the financial experts and the economists together to steer the country away from the disastrous path along which it is travelling? The colossal rise in inflation has had a disastrous effect on our boot and shoe industry. So has dumping from slave labour countries. These manufactures are coming in from Britain packed in British cartons. The customs people and all others concerned should subject these imports to a thorough inspection because it is these imports that are bedevilling the situation here.

We cannot afford to lose whatever people of wealth we have. We are in grave danger now of lossing them. Already a great deal of money has been shifted out of the country. I have had numerous inquiries from German industrialists about this proposed wealth tax and they have asked me to try to get it across to the Minister for Finance that this tax will seriously militate against industrial expansion. One cannot help feeling this tax is the offspring of extreme Socialist thinking. Thinking about this tax, and looking at the extreme Socialist States, one understands why they have to build great walls and barbed wire fences to keep the people inside.

All Irishmen are anxious to own something. No one is naïve enough to think this proposed tax will remain unchanged in the future. This is the thin edge of the wedge and, as time passes, the rate will be increased and the exemption limit reduced. In due process of time land owners may find themselves caught in this iniquitous tax net. People are depressed at the prospect they see ahead.

This tax will adversely affect our tourist industry. The industry has been in dire trouble for the past few years. Now the industry may find itself saddled with this imposition. The Taoiseach and the Government should have second thoughts now about this Bill. At the moment the country is facing ruin and disaster. There is no work. Increasing numbers are finding themselves unemployed every day. Industrialists and business people are desperately trying to find ways and means of reducing their work force in an effort to meet rising costs.

Our people have brains and ability but they are overburdened with taxes. Again, there are too many getting money they are not earning. This tax could be the last straw that breaks the camel's back. Business people with premises they no longer use because of modernisation and rationalisation will be caught through valuation in this tax net.

There has been an increase in exports in the early months of this year because factories built years ago now have the expertise to produce first-class goods. Three years ago there were colossal imports of building materials. Now the stockpile is diminishing and we will be compelled to import once more and we will have to pay many times what we paid for our original stockpile to keep even the limited programme we have going. The cost will be in the region of £3 million to £5 million. These are the facts. They must be available to the Government. These imports will further increase the imbalance in our balance of payments. The economists and the Government must be able to assess this position. This is true of the building industry and the imports necessary to keep it going.

This year is likely to be a disastrous year for farmers. They have been held up by the veterinary strike and now with the shortage of fodder and grass it means that many of them will have to sell their stock for whatever they can get for them. This is another problem facing us to which we must give serious thought.

There is also the difficult problem of finding jobs for approximately 50,000 who are leaving school this year. There is no place for them to obtain jobs. Many of those in so-called good jobs are now redundant and are forced to live on the bread-line. We should bring back the capital which has been pushed out of the country. A lot of money needs to be channelled into agriculture, industry and tourism. Since last October I have asked several times in the House that a sum of money be allocated to get turf production going but the Government had no money to put into it. We have had magnificent weather when large quantities of turf could have been cut in the west. It is economical to cut turf now because it can be bought at £7 a ton. Coal now costs over £40 a ton so turf is very good value.

(Cavan): I am slow to interrupt Deputy O'Connor, but surely a discussion on turf has nothing to do with this Bill?

I am referring to the wealth that has been pushed out of the country. A sum of £250,000 would have been of great benefit in the production of turf but the Government would not give it.

(Cavan): On a point of order, at the very best that is a broad Second Reading point and has nothing at all to do with this section of the Bill.

I am trying to get the overall pattern. This Bill is a disastrous measure that will do more harm to the economy. This will send badly needed money out of the country. There must be experts from the Department of Finance who know that the 42 per cent of the people's money, which the commercial banks are supposed to hold liquid, is far below that at the moment. This is because the money has been removed out of the country quickly. Perhaps the Minister for Lands would explain that to me? Am I still speaking out of line on this Bill when I mention that?

I am speaking of facts which I know and which are obvious to most business people in the country. It is the job of business people to try to get people back to work. This is why I mentioned turf. If money is floating around it should be used to supplement people's incomes and not be pushed out of the country. During my years in this House I have never been one to stand up and speak on matters outside that of the debate in question or to speak politically. The country is in great danger. If some effort is not made to put it back on the straight and narrow path disaster will follow.

Surely there must be a distinction between a Second Stage speech and one on the section of a Bill. Surely that contribution must be confined to the section with which we are dealing? These are obstructive tactics used by Fianna Fáil.

That is not a point of order.

It is rather late in the day for the Deputy to take over the duties of the Chair.

I am not speaking as an ordinary Deputy tonight.

On three occasions today the present occupant of the Chair asked Deputies to try to relate their remarks to the section of the Bill we are dealing with and to keep to the wealth tax without getting into an economic debate as such.

It is very difficult to speak on the narrow matter of this section without bringing it into the whole context of the economic situation today.

That is a Second Stage speech and it is out of order.

Deputy O'Connor without interruption.

As I mentioned, it is necessary to get money into agriculture and into industry. The £1½ million which the Minister for Finance will get out of this wealth tax should be used for some of those purposes. We all know it will not be long until the tax is increased and everybody in the country will be caught by it. We know it cannot catch the wealthy man because he can shift his money to any part of the world to make more money for him. If the Bill was to serve any purpose that is the type of person it should catch. It is catching the business man and the hotelier. Eventually it will catch the smaller people. I hope I have got the message across here that I have tried to get across. I believe that we are facing a disastrous period between now and Christmas. I hope I am wrong. Now is the time to get our economy back where it should be and reduce unemployment.

(Cavan): As I said earlier, the principle of imposing wealth tax was accepted by the House on 12th March last after a protracted Second Reading debate. The House divided and the principle of imposing a wealth tax was accepted. This is a Committee Stage debate. I note there are 28 amendments to the Bill tabled in the name of the Minister for Finance. There are 32 amendments tabled in the names of Opposition Deputies, and that seems to indicate that they accept the principle of the Bill. Their amendments are obviously tabled in their efforts to improve the Bill. It is significant that there is no amendment to section 2 nor has there been any motion tabled to oppose the Bill. I suggest that the time of the House would be better spent in dealing with the 28 amendments tabled by the Minister for Finance and the 32 amendments put down by members of the Opposition. Do the Opposition not want to deal with their own amendments?

Section 2 is fundamental to the whole Bill.

(Cavan): It contains the principle of imposing a wealth tax, and that has already been accepted by the House. There is no amendment to that section. This is political play-acting, obstruction and filibustering of the worst type.

I cannot understand why the Minister is trying to dictate to the Chair. The Minister has been endeavouring to do that throughout the day, and he is now supported by a Government back bencher.

(Cavan): I am appealing to the members of the Opposition to behave in a reasonable manner.

We had two contributions from the Government side during this long day on this section. The Minister for Lands gave a wide-ranging speech on it also and in the course of that he covered three or four tax measures. An hour after the Minister made his contribution Deputy Barry Desmond made the most wide-ranging speech that has been made to date on this Bill.

(Cavan): We have been discussing section 2 for ten hours.

The length of the contribution by Deputy Barry Desmond was not matched by any Deputy on this side of the House. It is true to say that some of our Deputies ranged very wide on the Bill but none of them matched Deputy Desmond. Section 2 is the kernel of the Bill. It is ridiculous for the Minister to say that we have not put down an amendment to it, because it must be obvious from the tone of the contributions by our members that we are opposed to section 2.

The longest speech today was made by Deputy Gerry Collins by a mile.

(Cavan): Deputy Desmond did not speak on this section today.

An Leas-Ceann Comhairle

On three occasions the Chair has drawn the attention of the House to the fact that on Committee Stage the House is expected to discuss what is appropriate to the section and not all sections of the Bill. To do otherwise might be deemed Second Reading speeches. Section 2 deals with the charging of wealth tax, and in regard to that section the Deputies are bound to keep to that and nothing more.

Fianna Fáil are opposed to this section. The reason we have not put down an amendment to this section is simple: we are opposed to the section entirely. We do not accept the principle of the Bill. Wealth tax must be considered in conjunction with the other taxes the Minister proposes to introduce. We oppose this tax because it is being introduced at a time when our economic position is far from satisfactory. Section 2 will not help the Government to get the country out of the serious economic difficulties we are in; the reverse will be the case.

To a certain extent I agree with capital gains tax if it is directed against speculators but I do not agree with it if it is directed against individuals who, by their own initiative and hard work, have acquired assets. Our economy was built up by hard work on the part of industrialists and successive Fianna Fáil Governments; by people who showed their confidence by investing money in the country's future. To an extent the Government are paying tribute to the economic achievements of Fianna Fáil Governments by endeavouring to impose a wealth tax. The Government feel that the economy is such that it can bear a wealth tax. There can be no doubt but that this is the wrong time to introduce this tax, and the Government should withdraw this Bill. There has been no growth in our economy for almost two years and our national wealth may be reducing in view of the fact that there are 103,000 people unemployed.

I cannot see how this wealth tax, as it is envisaged in section 2 of this Bill, will get employment for any of those 103,000 unemployed. The reverse could be the case. As a result of this Bill many more people could find themselves out of employment before this year is out We should bear in mind that industry, which is already badly hit by redundancies, massive lay-offs, uncertainty, and lack of positive planning on the part of the Government, will be in a very shaky position following the imposition of this wealth tax.

It should be borne in mind that industries must pay on their assets and not on their profits. If an industrialist has sufficient assets as to come within the limits of this Bill, whether his profits be nil or whether his business shows a loss for a particular year, he must pay the wealth tax at the rate of 1 per cent of the net market value of his assets. An industrialist may have spent a life-time building up his industry, expanding it, creating more employment, and at the end of the day he finds he has to carry this burden, at a time when he is probably making only a very marginal rate of profit, possibly just enough to meet his payroll bill and maintain himself and his family.

Again, many an industrialist could find himself with a bank overdraft. He might hope in normal circumstances to get around the bend within a few years, but now, in addition to running his business at a loss for a few years, he must pay 1 per cent of the net market value of his assets. I believe many industrialists will not take the chance and there is great danger that if this section is passed, many of them will decide to close down. The worst feature of the situation is that people with money will not invest or buy shares in industry or will not buy it out for the simple reason that they will be afraid that the day will come when they will be in the same situation as a man who was forced to sell out.

Therefore, under section 2 of this Bill there is no incentive whatsoever to expand, to build up assets, whether by way of improving factory premises or buying new plant and machinery, which is now necessary in any industry, particularly in modern trading conditions, to meet the requirements of top quality goods at the minimum price in European and world markets today.

This proposed wealth tax could well be playing a big part in the difficult situation in which the footwear and textile trades find themselves. There are many factors involved in the sorry position of these trades today, but there are a number of persons in this country who would have bought shares and who would have bought some of these factories and made a fresh start by putting in modern plant and machinery and retraining staff, but these very people are apprehensive of the effect this section of the Wealth Tax Bill could ultimately have on their position generally.

People with money who would normally have come to the assistance of ailing industry will not do so now for many of the reasons I have just stated. I am convinced that the provisions of section 2 of this Bill have had a very serious effect on the construction industry already, and it certainly will mean the loss of more jobs to the construction industry within the next 12 months. During the past 12 months or so, thousands of workers in the construction industry have lost their employment for many reasons, but one of the reasons is certainly the proposed wealth tax. Even as late as this afternoon at Question Time the Minister for Industry and Commerce stated——

This is a Second Stage speech.

——that a number of proposals to set up industries were postponed.

This is scarcely appropriate to section 2.

These proposals were, I suggest, postponed by reason of the fears which the proposers had of section 2 of the Wealth Tax Bill, and I cannot see any more relevant point in discussing section 2 of the Wealth Tax Bill than this point and the other points I have made during the past 15 minutes or so.

The Chair has pointed out that the principles of the Bill were originally dealt with on Second Stage.

I am speaking of the effect which section 2 of this Bill will have on the construction industry as well as on other industries, and I intend to mention more industries still which will be affected by section 2 of this Bill.

The Deputy should keep to the material relevant to section 2 which is before the House.

I do not intend to get into an argument with the Chair, but I mentioned section 2 of this Bill at least 20 times during the last 15 minutes or so.

That still does not make the speech relevant.

Progress reported; Committee to sit again.