(Dublin Central): Before we adjourned this debate I was discussing the merits of this wealth tax and its effects on business. I was endeavouring to find out the purpose behind this Bill: whether it is designed to embrace a large section of the community and what the return to the Exchequer will be. When we look at the valuation of agricultural land, we come to the one firm conclusion that this is designed to catch people who are in business on a large scale. It is designed specifically for that type of person. In terms of employment, there is no point in looking at a small farm of 40 acres or a small shopkeeper. Where will we absorb the 103,000 people unemployed? Will it be in the industrial areas or the construction industry? We must concentrate on this section of the community when we are considering this wealth tax.
According to a report previously published in this country there will be a reduction in the number of persons employed in agriculture. This is a tendency in every country in Europe, in America and in any other country you wish to mention. The general pattern of people employed in agriculture in the EEC countries is around 16 per cent of the working population. The number of people employed in this country averaged, in the last statistics taken, at 25 per cent. I am informed that this trend will develop in this country also; there will be a diversion from the direct engagement on the land probably to manufacturing of the by-products of agriculture. These workers must be absorbed in factories, in construction work and in the services, unless we are to have 200,000 people unemployed. I believe that this package is not taking into consideration the profitability of a company at all.
The White Paper and the Bill do take into consideration that all businesses do not give the same results. They have conceded that in the Bill by valuing agricultural land at 60 per cent. I believe the thinking behind it was that the return on capital investment in agriculture would not give the same return as in industry and in business. Of course the same principle applies in business: every business varies in its profitability. Some businesses, probably with high automation and the techniques they employ, have a very low labour content and very high profits. That is not the type of an industry we would want here. We would want industries with a high labour content and quite often manufacturing industry with a high labour content has not the same return in capital. We have only to see the various companies in the weaker sector of our industrial arm that have closed down recently. That was due to low profitability.
There is no provision in this Bill to vary the one per cent in relation to the different types of profits : it is right across the board irrespective of whether you have a high return on capital or not. I believe basically that this is wrong, that some steps should be taken to look at the profitability of the company and see that there is a variation as regards the rate of wealth tax.
We know that in countries like Germany they allow the wealth tax against income tax, but there is no such provision here. They allow a portion of it. It is quite obvious that we are aiming here—perhaps from an administrative point of view it is more acceptable—at uniformity but certainly from a business point of view anyone seeing the returns of companies in the Independent, Times or any national paper any morning can see the drastic downturn in the profitability of companies. This downturn in profits is bound to have an effect on the companies. We all know that when a company are doing well everyone within that company, the employees and everyone involved in it, also do well. By and large you will find that in any business or any company once the profits are right the directors of that company will plough back profit into the company: they will give better conditions to their employees; they will up-grade the type of factory they have and this gives confidence. This is what confidence is all about.
If you have 40 or 50 employees in a factory or in any type of business and they see that the company is ploughing money back, they know perfectly well that their jobs are secure. They know that the directors or the board have every intention of staying in business and expanding the business. This can only happen when there are sufficient profits in the company.
On the other hand, if you see a company being run down gradually and profits are bad you will find that the workers themselves are losing confidence. They are worried about their jobs. Even the trade unions, in my opinion, have quite often overlooked one of the most important factors in employment: I do not think that shorter working hours or wages are the vitally important factors where employees are concerned. The first and most important factor for any employee is security of job life—will it continue, will he have pension rights? That is the first basic requirement of any employee—continuity of employment and pension rights. After that, he can talk about shorter working hours and increases in salary. But, there is no good in continuing as we are at the moment with employees getting 25 per cent and inflation running at a corresponding figure and the factory being undermined. It does not make any difference what you give an employee if this position continues because he will find that he has no guarantee that his job is going to continue. We should be aiming at building up confidence in the industrial sector, building up confidence in the trade unions and the employees. You will not do it by going to Brussels or to the Arab countries for a loan and bringing back £80,000,000.
