We are hearing a replay of records on this amendment. This is only justified by the essential nature of what is involved in this amendment. I have a certain amount of sympathy for the Minister in the way in which he has presented his argument. He has dragged everything in. It is a typical administrative exercise—paper and talk—but while we have plenty of paper and talk we have a serious depression outside which I concede to the Minister is part of a large environmental problem involving the whole of Europe at least. I will not quarrel with the Minister when he said it was world-wide but it has its local aspects. When a ship is in a storm it minds itself and the captain does not let it founder on the excuse that all other ships are in the same condition.
We have a problem which we are not tackling. We have administration, neat briefs and statements from a Minister, complacent patting on the back for what he has done, theoretical dissertations on the social values and levelling and so on when outside there are 100,000 people unemployed and others afraid of losing their jobs. There is unrest and the Government unable to make up their own mind and having made a complete mess of the remuneration problem. In this context the key to the situation is brushed aside, and that is productivity and economic activity. At the moment there is too much talk about rationalisation and nice tidy paper work. Rationalisation is a great word. Institutes and individuals are saying that it must be economic and so on when the things that matter are people, their jobs and their standard of living. This neat brief from the Minister this morning is all very well in its place, but in the context of what the Government and the country are up against is out of place.
I should like to deal with why we are on productive assets. As the Minister said, and I concede it has been agreed by resolution from the Dáil that unproductive wealth, luxurious wealth, should be taxed and we should have the social aim of levelling out. All that is conceded, but even that has administration and costs.
The Minister said last night that this will promote employment. It will promote employment at the administrative end; it will promote the recruiting of people to collect this tax but that is not productive employment. This is ancillary employment which depends on production. If the basic production and the basic productive economic activity is not there then it is futile to hope it will support the other. What is the problem in the public service at the moment, for instance? The economy cannot support it. Why cannot the economy support it? The economy cannot support it because the productive element of society has, to some extent in certain sectors, collapsed. The economy cannot afford it because productive units have gone out of business, productive firms have gone into liquidation. The economy cannot afford it because a productive element of the building industry has large unemployment. The building industry was producing real wealth, buildings, and it was adding to the totality of the real wealth of our people.
Those are the basics we have to think of and what has to be supported. It is side-tracking the debate to pretend that this is a wonderful social achievement that will benefit us even in normal times. Even if there was surplus wealth around some care in approach to the problem would be needed, but at a time like this it can make no contribution. It could aggravate it. I should like to refer to what I think is a basic confusion here. I am using the word "confusion" because one could lose sight of what we are talking about when we talk about production. The first question is to ask what do we mean by production when we are talking about production in this sense, productive assets? It means the production of real wealth and what is real wealth in practical terms for the community as a whole? It is the production of these things which enable people to live and improve their standard of living and which at least maintain the standard of living achieved and, one would hope, give the further chance of improving that standard of living.
What is real wealth? Real wealth is not just the money. This is the mistake we are making. It is not the pay cheque. The pay cheque is only a chit for the wealth, as we all know now with inflation. It is only a chit, it is only part of the administration of paperwork. The value of that chit depends on the reality that backs it, in the last analysis. With all our modern economists, Keynesian or otherwise, I think one gets back to Dickens when it comes to finance, but it goes back to Adam and Eve when they were told that by the sweat of their brow they would earn their bread.
What is this productive wealth we are talking about? First it is food, the production of food. I concede to the Minister that this is recognised in the Bill, and we urged too the recognition of agriculture as a productive industry. Full marks to the Minister. I should like to go a little bit further with that. I cannot include the whole economy in one amendment on Report Stage. I will have to forego following up the question of the distribution of food and the problem that brings in. I will make the remark that unfortunately the Minister's problems, our problems and all the economic problems of the western world, are all bedevilled by a superstructure of finance and banking which is international and which is bedevilling the whole situation in that the productive units, the productive companies, productive factories or productive units, tend to be chits again which are passed along, the subject of a kind of brokerage, if you like, at that higher administrative level. That is not productive and the productive units are subordinated therein. That is the basic fault as far as I can see but that is beyond our control. That would bring me into arguments of another nature. I merely express that to point out that the basic ill of the west at the moment is this failure to realise the problems of production and distribution in real terms, and to subordinate the administrative to the real physical economic activity instead of the way things have developed where the reality has been completely subordinated to the conventions of the administrative.
That is a general statement and I thank, you, a Cheann Comhairle, for allowing me to make it. But it is important on this amendment to realise that what we are talking about here is first of all real wealth—food, clothing, shelter and the other things that are needed to keep up the standards that we have. It is the production of something tangible. You do not feed people by having a lot of economics about production. You will do it if the farmer does it. You do not rule people by having a lot of great statistics about the clothing industry. Take our footwear factories and their problems at the moment. You do not house people by having a lot of statements about policy on housing and so forth. You have to build houses. Building houses means having material and having workmen, a work force to do it. In doing it you are producing wealth, you are giving employment and you are adding to the total wealth of the community and raising the standard of the individual, keeping jobs. I could follow that right down to the less important things but I have taken these as the principal ones.
What we want here is the necessary production and to do everything we can to stimulate the provision of this production and to stimulate productive activity. I shall make this further general comment about the whole Government's approach to this. Their failure to understand the true nature of productivity and what is involved in real terms, to think in terms of employment has brought about many of the tragic positions we have today. While we are not building up the productivity here that will give us the resources measured in administrative and financial terms to keep people in employment with adequate remuneration, we are drawing on dwindling resources to support people who should be gainfully and progressively employed. We are giving relief. We are drawing more and more, and this is why there is need for all the taxation. The camel is living on his hump. He cannot live on his hump forever.
When we talk about productivity we are talking about everything that can be done in the present situation to stimulate that activity. Take the building industry, for instance. The Minister for Local Government talks about houses and shelter. That is very important, but there is another type of building activity and the building workers of this city of Dublin know it. So do the firms concerned. A number of these were the targets of the doctrinaire socialism and armchair economics of certain people. I am afraid I cannot exclude the Minister for Finance from the category in a certain regard. While that activity exists there will be always people who do not understand; there will always be people complaining. The philosophy of envy was exploited to a certain extent but at least you can say that people were in good jobs, earning good money and that that money meant something.
But the first fundamental error we are making is that we are not concentrating on the promotion and stimulation and provision of productive activity and in so far as this comes into the picture at all it is more or less on the negative side in the provision of reliefs, which of course are absolutely necessary—you cannot let people starve. You have to meet a situation like that. Let me be fair. So far as certain sections are concerned, whether it is outside their control permanently or transitionally, this kind of approach will always be necessary, but it should be as a supplement.
Therefore the bone of contention between the Minister and ourselves on this Bill as to whether it should apply to productive assets or not—"productive assets" is an administrative, if you like, an economic phrase—is that while we must give relief, in giving those reliefs we should do nothing to aggravate the problem. What is the use in giving reliefs on the one hand and imposing extra taxation on the other? The Minister talks about taxing the wealthy, but when he introduced his budget last month it was distributed over a much larger area than the people he is talking about now. If the Minister were to pay a visit to any office in the public or private sector where money is being paid out he would soon find out the realities of the situation. These are the basics behind this amendment.
The Minister stated that this Bill would promote employment. It will promote employment in the administrative side as against the other. It will mean more staff being needed to cater for the extra paper work. Will the return be worth it? There is a total misconception in this Bill which could be very simply rectified by this amendment. The more diversified and complex production is the more you need to have perfected your administration and your financial structures. I understand the difficulties facing a Minister for Finance here with this superstructure of international banking and finance to contend with. Nevertheless, productivity in a tangible sense must be sufficient to support the administration.
A good example to take would be an army. In a war an army are for fighting. They are made up of the infantry, the artillery and the cavalry. They must consists of adjutant generals, quartermasters' departments, paymasters' sections to look after accounting and so on. There is a semi-area like the medical corps, the signal corps, which are supporting services. These are all a necessary and important part of the army. But let us not be misled into thinking that the administrative services could win the war without the fighting services.
The same situation applies to the State. If we take the newspaper industry, about which I know something, we shall see that the most important element is the editorial section, the printer and transport— distribution of the papers. If the papers are not sold then business collapses. In order to do that it is necessary to have accountants, circulation departments, advertising departments, exactly analogous with an army. So it is with the State. If the community have not got the productive element working, if the farmers do not produce the food, if the factories do not produce the clothing, if the building force are not active modernising our accommodation, whether administrative or for human habitation, if our gas company are not producing gas, if our electricity undertaking is not producing electricity, if all this collapses, the wherewithal to support our administrative staff would not exist. The result would be, as we have seen here, that the State would have to try to keep up its administrative level by increasing taxation, and we reach the point where the camel is living off his hump.
It was a necessary counter-balance to the Minister's statement this morning on what he had done. I do not want to take credit from him for what he has done. I have more than once sympathised with him when he said: "I give a little and then you press for more. Where do I stop?" He said on one occasion, rather ruefully, and I certainly had sympathy for him: "It would be better if I did not give anything at all there." The Opposition's job is to press things. We have pressed him for reliefs and so on. I am not saying that nothing reasonable has been said by the Minister, but I am emphasising what I have said in order to show the other side of the coin, to bring a balance and a sense of reality to the discussion launched by the Minister this morning.
The Minister has given many exemptions on section 9. They are listed at (a) to (k). All of them have been approved and can be justified. Frankly, I can understand the Minister's rejection of amendment No. 16. If one goes through the list one finds that only two are directly exempting productive assets. When I say that I am conscious of section 10. I am speaking solely within the framework of section 7. I am conscious of the fact that relief is most properly given to agricultural property and farm machinery, to fishing boats and to hotel premises. We had that on Committee Stage. Out of these 12 subheads, there are only two that can be classed as being in the positive productive category that we are talking about. One is (c) and the other is (d). The first two, (a) and (b), are proper ones to have in and so are the rest. But it is still significant that out of 12 exemptions there are only two —"livestock to which a person who is a farmer within the meaning of section 10 is beneficially entitled in possession" and "bloodstock" which are productive assets and rightly exempt. After that it seems to me that there is a hiatus and I advocated earlier that it should be a broader field. I understand and I allow that there are complications for the Minister particularly in the approach he has taken. We would have to be here for a long time to work out all the ins and outs of the relationship of the shareholding in a public company —I am talking of public companies now, big enterprises in other words— to the productive activity of that. To put it shortly there is an indirect repercussion here. However, there are ways of doing it. To some extent, it is a matter of the quantity of the relief rather than the relief as a whole. We are seeking to get the principle of relief as a whole recognised and it can possibly be adjusted by increasing the partial reliefs in certain areas. The marginal note to section 10 reads "net market value of productive property". However, that section only refers to agricultural property, fishing boats and hotel premises. There is much that is not captured there.
There is the case for the plaintiff, so to speak, on this amendment. I would like to round off what I have to say, since it is Report Stage and I can only speak once, by some further remarks on what the Minister said. I hope that by trying to focus attention on the real issue we can see the rest in perspective. The Minister has made comparisons with other countries. I can understand a Minister doing this. It is a valid point to make in a way. But my answer to that is very simple. We are dealing with the problems of this country in its own specific circumstances. That is more difficult nowadays in the context of our European commitment. It is difficult because of the world situation but it is a question of the commandment "Man mind thyself". The Community must mind itself and this country must mind itself. Therefore I think there is a certain danger in getting involved in paper comparisons with other countries. The same applies to what the Minister said about relief under other codes. He is perfectly right in what he said but the logical conclusion of his argument would be that this has been the situation in the past and we should not try to change it. The Minister cannot have it both ways. He is the first to say that we had not changed it, that Fianna Fáil in office had done nothing and to claim that he was doing something. If you take that point of view you cannot, at the same time, take the point of view that the old codes did not do it and therefore it should not be done here. There is a certain lack of logic in that. The Minister quotes international commentators. These are a bunch of what I might call theorists and economic and administrative specialists and prophets. Sometimes they are right and sometimes they are wrong. They told us that by the beginning of 1976 everything would be all right but the Taoiseach, not so long ago, had to come back and say: "That is not so: The clouds are still there". I have a certain sympathy with the pundits. They are like the weather forecasters before scientific equipment was invented for reasonably accurate forecasting. Even with advanced equipment, meteorologists are often wrong in their predictions. Economic forecasters have not got sufficient information or sufficient means for making reliable forecasts. I must be pardoned if I am a little sceptical about much of the prognostications that emanate from Brussels or anywhere else. I am not saying people are not trying to do their best. In a time of flood a man should look to his own house to see if it is watertight and when he has done the best he can he can then study the impact of the flood on a larger area.
The key to our problems lies in adopting a certain approach, not quarrelling at this stage or seeking to differentiate, although one would be prepared to do it even if misrepresented. The genuine benefit of the people in the long term is what matters. People in politics will always be misrepresented but they must still strive for the good of the people. In this spirit I ask the Minister to consider our proposals. We cannot afford the political conventions at the moment, where one side vilifies the other. Let us be objective. I have tried to be as positive and as definite as. I can be about the mutual roles of administration and production. I have pointed out that the administrative is supported by the productive. But let us also realise that the administrative is as important as the productive. What is involved is a co-ordination and balances. In the case of taxation, if we do not achieve the proper balance the inevitable result will be either that the administrative will be starved, which would be wrong, or else, if the productive element were neglected, then the wherewithal to support the administrative element is gone. That would result in further taxation, further pulling back and fewer people from whom to take money. That is what I mean by the camel living off his hump.
I say these things for the sake of reality and not without recognition of the extremely difficult problems which face the Minister and the Government and not without a degree of understanding and sympathy, notwithstanding the political conventions. There is a difficult time ahead of us and we cannot afford to indulge in scoring debating points or shouting from soapboxes. I am, therefore, avoiding opportunities which the Minister is providing for excess criticism of his policy. I hope the Minister will give me credit for not seizing upon them. The Minister must see that there is a solution to the problem we have been talking about here.
In the section now before the House there are 12 provisions, of which only two can be placed in the productive category though allowance must be made for provisions within the Act as a whole such as section 10. Therefore, I am emphasising that it is the principle of totality of exemption of productive assets that I am speaking of here. One should be reasonable. If the principle were admitted and applied how to work it into the Bill would be a matter for co-operation and understanding and these would be forthcoming from this side of the House. If the Minister adds the phrase "productive property situate within the State" that is all we want to have included. We want that exempted to promote productive activity, economic activity, the provision of jobs, sufficient remuneration for work. I admit it would be a small contribution towards the solution of all our problems at the moment.
Perhaps I should anticipate what the Minister may say to me. He might ask: "Does the Deputy think that by doing this in the Bill he is going to solve all the problems facing the country, the Government and this House at the moment?" Of course, I do not. I know the contribution this will make will be small but it is a worthwhile contribution in the opposite direction and we should do nothing in the way of disincentive even if it were no more than a psychological disincentive. We should not do anything of this nature at the moment.
The justification for making this amendment in the Bill while based on the general principles that I tried to outline is not based on the ridiculous assumption that to do this, or indeed that this Bill at all, will help significantly anything in the State. It will help the present position. It will take more money back into the Exchequer. It is imposing taxation. In some cases it gives general reliefs and I give the Minister credit for that, but by including these productive assets you are at least not providing a psychological disincentive. That simple fact, small as it is in proportion to all the other factors that govern the situation, is in my view ample justification for our pressing this amendment.
It is terribly important to keep things in proportion. The Minister will recognise, I hope, that I have not invoked the social aspects from the point of view of the philosophy of envy that he talked about, however applied. He was able to use that argument both ways. He used it one way earlier in the debate and he used it another way on an amendment yesterday, in the opposite sense. That may be all very well for debating but the Minister might consider accepting the amendment. The Seanad gave a formula.
I have from the beginning of the introduction of this taxation strongly pressed the Minister at all Stages to empower the Revenue Commissioners more. I have asked for a few things and these are relevant to this amendment and its implementation. I have continually asked the Minister to give empowering legislation to the Revenue Commissioners. At the end of these debates I am as firmly convinced as I was at the beginning that given the Revenue Commissioners as they are and have been and their staffs as they are, I would have no hesitation in conferring that discretion. I was glad to see that the Seanad brought in something of that nature.
In the interests of the Revenue Commissioners great care should be taken to avoid complexities adding to their administrative difficulties because I fear that if the Revenue Commissioners become a very complex organisation their high standards may be difficult to maintain. It is the experience of everybody in this megalomaniac world that when you get big organisations where units have to be complex and big to deal with complex problems standards are difficult to maintain. Therefore, while pleading for discretion for the Revenue Commissioners, I will also plead for simplicity for them. I say to the Minister that I will understand arguments about administrative complexity here and if the Minister bases his arguments on matters of that nature then he is on ground where we can have constructive debate.
I have a feeling that the Minister's rejection of our overtures on paragraph (e) were in the last analysis not based on the argument of equity but based on the argument of administrative complexity and unworkability. That I can understand. Although we voted against his not accepting our point of view, nevertheless, I confess personally that I can understand that argument. I can also understand this argument in connection with the present amendment. Then I would say as I have said on so many occasions to the Minister, can you not solve it with discretionary power here or let us have specific examples as to why not?
I have mentioned the case of public companies but one would also mention the case of the property of private trading companies where there is an employment content. All these things come into the picture.
We have been putting this amendment to the Minister, in the temporary absence of the mover, Deputy Colley, who is at an important meeting in the House, on the principle of where production stands in relation to administration. That is the fundamental approach to the argument. I tried to develop that. Perhaps the Chair was indulgent in allowing me to develop it to the extent that I did at the beginning. I thank the Chair and the House for that indulgence. If I was somewhat vehement in the presentation of it, it was for the sake of emphasis on the objectivity and for no other purpose. If one looks at the thing that way, then one has to say that having regard to this subsection, even making allowances for what is elsewhere in the Bill in regard to productive assets, there is still need for some such clause but apart from this there is the principle that there should be no disincentive. We do realise that of course this is not the panacea for our problems. The panacea is certainly not to be found in this Bill. I have not therefore sought to put the thing any further than to say that any disincentive is not helpful at the moment and taxation no matter how you look at it is a disincentive.
I mentioned a number of industries, perhaps the Minister might, even at this hour, consider. If the amendment in its simple form is not acceptable, if it gives rise to administrative difficulties—the arguments against the whole matter that can be advanced from an administrative point of view have probably some element of validity—I am still brash enough to urge the Minister to take his courage in his hands having been given the empowering legislation there to confer the discretion on the people who will be exercising the power, to take care, however, that they are in a position to exercise their discretion and to use their power in the most efficient manner by minimising complexities for them as far as possible.
