I am afraid we have in the Minister's statement of his opposition to this amendment a typical bit of administrative thinking without adequate consideration of what the realities of the situation are likely to be, as Deputy Fitzpatrick said. I say administrative thinking because it is the type of administrative logic that can lead to absurdity. I will tell the Minister why I make a statement like that. The statements I just made are not ones to be made unless there are good grounds for making them. I hope there are good grounds for my making this one.
First of all, let me take the Minister's false analogy with a residence. In the case of a residence, that is completely free of tax. It is the same as the acquisition of any other asset. Where an asset is being acquired with a benefit I quite agree with the Minister that to give an exemption of the debt acquired in purchasing would not be in the same category because what you are exempting is the asset once acquired, in the hands of the person, and if they were to acquire such an asset they can acquire it by purchase. I agree that it would be going too far to attempt to exempt the purchase price of that, although from another point of view the case could be made, but for the purpose of my argument I will admit the Minister's point there. That is a completely different matter. Here we have a case of a property the value of which is going to be adjusted by deduction of 20 per cent of the market value. If it is a productive asset of a certain sort, which is used directly in the provision of employment, is the phrase used in the section, that by itself, if there was a simple asset that is giving employment and is used directly in the giving of employment, and the amendment stops there, that is a benefit.
Now let us look at the practical case. In most cases there will be debts. In very many cases if the value of the asset is reduced by 20 per cent and the value of the debts are reduced by 20 per cent at the same time you are robbing Peter to pay Paul, or you are taking away with your left hand what you are giving with your right hand. To say the least, it is a notional administrative transaction in practical terms.
Incidentially, in a case of debts and encumbrances outstanding at the valuation date, I can understand encumbrances, but where you have the property which is used directly in the provision of employment, the exact meaning of "debts" might lead us to some interesting points of distinction. That is bad enough. In other words, we have a section here which apparently confers a benefit but which in the most practical cases—and remember in most practical cases where employment is concerned there will be debts—we are very likely taking away with B what you give with A.
As Deputy Fitzpatrick pointed out, the situation is worse than that. This is a rather important consideration if the Minister's avowed purpose here is to provide employment. Another administrative error is that nothing stands still or is cast in business. You either go forward or backward, as a general rule. There is no such thing as saying: "I am nicely placed. I have a static business and everything is happy." That is an error that the staff mind, whether it is in an army, or in an administration, or in a big company, or anywhere else, can make.
In the case of an enterprise coming within the terms of this subsection and providing employment, it is probable that the impetus of business will require continued investment to secure expansion, to safeguard employment, and to secure viability by development. I doubt if you would have any difficulty—I could give a large number of individual examples if I were asked— with businesses which have been faced more than once with the alternative of dying either quickly or slowly, or taking their courage in their hands and developing. It is like an aeroplane taking off in difficulties. To avoid a crash the pilot, instead of doing what the cautious motorist can do—pull up and go in to the kerb—has got to put on more power and put in everything he has got to get airborne and get into a safe area. It is the same in business. You must invest, you must develop.
If you concede that practical consideration, which I submit to any businessman is a very real one, then you must concede that that development requires financing. The conventional way of financing is borrowing in some form or another, and borrowing means debt. It can frequently happen in the type of enterprise envisaged in this subsection that the actual initial assets, that is the property, involved and the net market value of the property which is used—I will not complicate it by expanding the argument to the stocks and shares—may be quite small in relation to the debt incurred. It would not be unusual for a business with, say, a property evaluated at £½ million to have a debt of the order of £¾ million. The point is that the debts could be greater than the actual property.
If that is the case, we come to the kernel of Deputy Fitzpatrick's argument, namely, that you give 20 per cent benefit on the lesser, and only allowing 80 per cent on the greater means that you have more debts unallowed for than you have value allowed for. That is an important point in considering the particular enterprises here. It is facing reality. It is a totally different situation from the case where a person buys a residence. Appeals to formal logic, arithmetical or administrative logic, in this case is not the answer. The amendment would correct this.
In final answer to the Minister's point about administrative logic, if you want to help productive assets, if you want to make an exception and you are making an exception here—I am giving full credit to the Minister for his good intentions—why not give the 20 per cent? It will be very easy to check on the debt. There will be no evasion in the debt. By giving the 20 per cent you are actually doing the reverse of what you are doing here. Instead of creating difficulty where there is expansion and development, you will encourage expansion and development. This is one of the things we have been urging from this side of the House. I would very strongly ask the Minister to consider the amendment in that way.