Agricultural Credit Bill, 1977: Committee Stage.

SECTION 1.
Question proposed: "That section 1 stand part of the Bill."

I recall during the last Dáil when introducing a Bill that the present Minister for Industry, Commerce and Energy, Deputy O'Malley, got me into some difficulty because the date had not been changed in the Bill. It was introduced in 1976 and it contained that date in the title although it was not to become law during that year. In fact, it has not yet become law: I am referring to the Bill relating to consumer information. Therefore, I am wondering if the date 1977 as contained in section 1 should not read 1978?

It is the date when the Bill is introduced that is on the Bill.

I accept that this is a matter that is not of great importance but when a Bill becomes an Act and is cited as an Act, the date that will be mentioned is the date on which it became law, not when it was introduced. I am wondering whether the change should be made at this stage in regard to this Bill.

This matter was discussed before——

Not in this Dáil.

Not in this Dáil but in the previous Dáil. There is continuity between Dálaí and the matter was discussed. Any changes made so far as the date is concerned will be made when the Bill becomes an Act.

I am taking it from the Chair that that will be the case. That satisfies me.

Question put and agreed to.
Section 2 agreed to.
SECTION 3.

I move amendment No. 1:

In page 4, subsection (1), between lines 16 and 17, to insert "(b) the raising of crops,".

This amendment arises from a point I made on Second Stage. The growing of crops which is the very essence of agriculture is not included in the nine categories of activity described in the section as being included under the term "agriculture". For the sake of clarity the raising of crops should be so included and I would ask the Minister to accept the amendment. I am sure there has not been a problem about this; otherwise we would have heard about it. However, I am convinced it should be included.

The amendment is not necessary. The list of items from (a) to (g) as set out in the section does not purport to be comprehensive. We know that obviously tillage is agriculture. If we add "the raising of crops", where would we stop in the list of items?

The Government have gone a good distance of the way. The breeding, rearing, or keeping of animals is mentioned in (a) and, therefore, I think that the words "the raising of crops" equally should be included. It has as much to do with agriculture as any of the items mentioned.

One could argue that many things as well as the raising of crops could be added. I am advised that the amendment is not necessary.

Amendment, by leave, withdrawn.
Section 3 agreed to.
SECTION 4.
Question proposed: "That section 4 stand part of the Bill."

I should like to ask the Minister what procedure will be used with regard to money paid under this section. What formal requirements must be fulfilled?

I do not fully understand the Deputy's question.

What procedure must be gone through before money can be paid out of the Central Fund under the powers given in section 4?

There is no special procedure, just advances for share capital.

There is no other form of advance, apart from advances for the purchase of shares?

Has the Minister given any consideration to the matter of the powers under section 8?

We are not yet dealing with section 8.

Question put and agreed to.
Section 5 agreed to.
SECTION 6.

I move amendment No. 2:

In page 5, line 31, after "Oireachtas" to insert "but only after the estimate in which the provision is contained has been approved by Dáil Éireann for the year in question".

My amendment is not directed specifically at the Agricultural Credit Corporation. I have a strong view that money should be paid out only under an Estimate of a Department when that Estimate has been agreed first by the House. The procedure at the moment—this has been the case under previous Governments also—is that money is spent and will be spent throughout 1978 under the Book of Estimates that was published a week ago. In fact, some of the money covered by the Estimates was spent in the first week of 1978 when the Book of Estimates had not even been published.

By the time the Dáil comes to approve the Estimates nearly all of the money has been spent. To my mind the procedure is meaningless. There is no way a Deputy who may question the wisdom of certain expenditure can persuade the Minister not to spend the money because by the time the Deputy gets an opportunity to raise the matter the money will have been spent. This is a grave weakness in our parliamentary procedure.

I have always considered that we should adopt an advance year basis for the agreement of Estimates. The Book of Estimates that we should be considering in our discussions here during this year should be the Estimates for 1979 so that Ministers will not be able to spend money until the approval of the House is obtained. In that way we would have a much more realistic debate regarding public expenditure.

I realise that the power to spend money as contained in section 6 is not a very great one. I am introducing my amendment on this Bill to make a general point, one that is not confined to agricultural credit. Irrespective of whether the amendment is accepted here, I shall introduce a similar amendment in respect of every Bill with which I am concerned where such a provision exists.

If we are to maintain control of the enormous growth of the public sector in our economy we must have stronger parliamentary procedures to ensure that Deputies, who represent the people and who are asked to vote for the taxes being spent by Ministers, have an opportunity of approving and of influencing the Minister's thinking in advance on the amount to be spent on a particular subject and that nothing shall be spent until the House, which is supreme in this matter, has agreed it. Therefore, I urge that nothing be spent under section 6 until the Dáil has first approved it. I would ask the Minister of State also to use his influence to ensure that a similar procedure is adopted in respect of all subsequent enactments and in relation to the Standing Orders of the House.

While valid points were raised by Deputy Bruton, there was raised the bigger issue of parliamentary procedures to deal with finance. We cannot really deal with those in the context of this specialised Bill.

I cannot accept the amendment because the funds must be made available from the beginning of the year to meet the payment of services as they fall due. For that reason the Central Fund (Permanent Provisions) Act, 1965 was passed to authorise the Minister for Finance to issue, out of the Central Fund, before the passing of Estimates, up to four-fifths of the amount allocated the previous year for any vote of service.

Amendment, by leave, withdrawn.
Question proposed: "That section 6 stand part of the Bill."

Am I correct in believing that the money concerned here is for the purchase of shares? Would the Minister of State be able to tell me how much money is provided for 1978 to be spent under the powers contained in this section?

It has nothing to do with the purchase of shares; it has to do with administrative expenses within the Department.

The Minister of State said it had to do with the purchase of shares in reply to an earlier question.

That was under section 4.

Could the Minister of State tell me how much is provided this year and what sort of administrative and other expenses are involved?

Nothing specific is provided; it is merely part of the overall costs of the Department concerned.

How much was spent last year under the powers contained here?

It would not be that easy to quantify. It depends on the number of staff involved in the administration of the ACC, in the department concerned.

Surely the Minister of State must know what was spent last year. I could understand if he came in here and said he could not tell us what would be spent this year because he does not know what will be the full expenses to be met; there may be unpredictable elements in the operation of the ACC. I accept that. Obviously all that could be included would be a general provision under some subhead of the Department of Finance for a specific figure. That figure could be exceeded or not under the normal procedure whereby savings under one subhead are transferred to meet excesses in another. If the Minister of State is asking the House to approve this section he should have some idea of how much money was spent last year, a year for which all records should now be to hand in respect of the administrative expenses of the ACC.

No, because the staff involved—and it is mainly staff— were engaged on many other duties in the Department as well. It is not easy to quantify.

It is Department of Finance staff, not ACC staff?

Yes, that is correct.

Question put and agreed to.
Section 7 agreed to.
SECTION 8.
Question proposed: "That section 8 stand part of the Bill."

May I raise the question here of the passbooks, which are of vital importance at present to the ACC? I am disappointed that provision has not been included as yet. May I ask the Minister of State when these passbooks will come into operation and, secondly, under what section of the Bill are they accounted for?

Might I pass on then to the question of current account facilities? This is something about which I spoke at length on the first portion of the Bill. These facilities are essential to the ACC. They could now be described as full banking facilities so far as agriculture is concerned. Might I have a reply from the Minister of State on both those issues?

There is no necessity for a provision in this Bill to allow the ACC to do so. There is nothing to stop them doing it themselves if they so wish.

Current account facilities?

Passbooks.

I asked both questions.

There is no need for the provision of passbooks. The current account facilities raise general banking questions and these are being considered at present by the Department and the ACC.

I am aware that the machinery has been set up already for the provision of passbooks. Could the Minister of State give us some indication of the date they will come into operation?

This is a Bill endeavouring to tidy all of the legislation so far as the ACC are concerned; we may not have another Bill for two or three years. Do I take it that, so far as current account facilities are concerned, they are out for at least the next three years?

The section gives wide scope to the ACC. The matter of passbooks has already been agreed by the Minister and the ACC and it is a matter for the ACC themselves now.

ACC depositors are looking for these and are worried that they are not being put into operation. They were ready to put them into operation a year ago. When can we expect that the ACC will have these passbooks available to their depositors?

I shall try and get that information for the Deputy as the Bill progresses.

I take it from what the Minister of State says that there is no obstacle in the Bill, as drafted, to the ACC granting full banking facilities if they so decide?

That is a different question altogether.

We are talking about current account facilities now. The section talks about the memorandum of association of the ACC which sets out the objective. The section more or less lays down the parameters within which the memorandum of association of the ACC can be drawn up. I submit to the Minister of State it is open to the ACC under the Bill as drafted to grant full current account facilities to their clients and to amend their memorandum of association accordingly. In particular I refer to subsection (1) (a) (iv) which allows the ACC to provide such other credit facilities as they think proper. Then subsection (3) states:

Nothing in this section shall prevent or restrict the inclusion among the objects of the Corporation as stated in its memorandum of association of all such objects and powers as are reasonably necessary or proper for or incidental or ancillary to the due performance of the principal functions aforesaid and are not inconsistent with this Act.

My reading of those two provisions together indicates that the ACC have very wide powers to move into the full banking field should they deem it necessary, should the Minister, under his overall responsibility for agricultural credit, decide to allow them do so. If the Minister were to make such a decision it would not be necessary to come back with amending legislation. It would be appropriate for the Minister to clarify that point.

The Deputy is right. Current account facilities could be introduced under this section as it stands. It is a matter for the Department of Finance, the ACC and the Central Bank to determine when and on what terms these facilities will be introduced.

How seriously is the Minister of State taking the situation at present? In their operations the ACC take up people's papers and they cannot go to the banks for the current account facilities that are necessary to run a farm today. As far as security is concerned, the ACC must have security. Current account facilities are essential for overdrafts and short-term loans. I should like to know how seriously the Minister and his Department are taking this issue. It was a great mistake not to take the opportunity of tidying up this legislation when the Bill was being drafted. When a man's papers are taken up by the ACC as security we must ensure that he is able to get short-term credit facilities. This matter should be given serious consideration.

First of all, that is a matter for the person concerned in relation to the finance he is looking for. There is nothing to stop him making current account arrangements with his bank while his papers are held by the ACC.

He must have security for an overdraft and his security will be held by the ACC. He may want up to £10,000 over a period of six to eight months.

He can get it from the ACC.

Overdraft facilities help a farmer to write cheques whenever the need arises to do so. If you ask the ACC for £10,000 you will get the full amount in one cheque. Overdraft facilities should be available. He should not be charged interest on the full amount for the period of the loan. I am disappointed that this point was not included in the legislation. I want to know if the Minister is taking this matter seriously, because the farmers are serious about it.

It appears there is provision in those sections to operate a full banking service to promote any object the ACC feel is necessary in agriculture and I welcome that provision. I have only discovered that this power is there. The power given in this Bill is similar to the proposal of the previous Government in relation to the IDA, a proposal which was criticised by the Minister and his party.

I am interested in this matter because I have experience of co-operatives having all their deeds with the ACC. It is not easy to get accommodation from banks when you have your deeds with the ACC. I was associated with a large co-operative which had lodged its securities with the ACC and our bank closed our account very fast. When you have all your securities with the ACC they should provide a full banking service for you. The ACC are doing a great job but they should go a little further and provide full banking facilities for those whose securities they hold.

Is the Minister prepared to accept the proposal on a limited basis in relation to people whose securities are tied up with the ACC?

Accept what?

Current account facilities.

There is nothing to stop the system being operated by the ACC. The legislation does not prohibit it but the matter is being examined as part of a general review of banking facilities.

I know that there is a general review of all State services all the time by every Government Department, and that is a stock answer. I should like the Minister to state specifically who is involved in this review, if there is any time limit for it and when he will be in a position to announce whether or not the ACC will be allowed to grant current account facilities.

As I said, the matter is being discussed by the Department, the ACC and, possibly, the Central Bank. As it stands, section 8 is very wide. It is a matter of policy for the ACC and for the Minister for Finance whether they operate current accounts.

What are the Minister of State's views?

I am not in the ACC. It is a matter for the ACC and the Minister for Finance.

A bit of encouragement would help.

Has the Minister of State received a formal proposal from the ACC to do this?

Can the Minister of State state when he received the proposal?

It has been received and further information is being sought on it.

I asked the Minister of State when the proposal was received and if he will indicate the nature of the proposal. Is it proposed to grant full current account facilities or is the ACC proposal of a limited nature such as was described as a compromise by Deputy D'Arcy?

It is a year since it was received but I do not propose to give any details.

Could the Minister of State state on what basis he is refusing to give details?

Because of the ongoing discussions between the parties.

Does the Minister of State not agree that the Members of this House are entitled to information of this nature?

As soon as there is agreement——

If the matter is agreed there will not be an opportunity for the Members of this House to express their views on the matter. As the Minister of State will only let us see the content of the proposal after a decision has been taken, he is undermining the whole purpose of parliamentary discussion on such matters. Would the Minister of State reconsider his position with a view to making available to the Members of this House the text of the ACC proposal so that a proper discussion can take place before he reaches a decision in the matter?

The matter is an internal one and I do not propose to give the details. However, as was stated previously, a full note will be taken by the Minister and the ACC of the views expressed by Deputies.

Will the Minister of State explain why this is an internal matter. Surely a proposal by a body such as the ACC to engage in full banking facilities will have consequences not only for the ACC but for the other banks and the entire credit market. To say that it is an internal matter is not representing the facts as they are. If the Minister agrees to that proposal, and there is strong evidence in favour of his doing so, it will have consequences for the business obtained by the banks because undoubtedly the ACC will be taking some of their business. While I agree with the proposal all parties are entitled to know the nature of that proposal before a decision is reached. I request the Minister of State to reconsider his position and state that the text of the ACC proposal will be made available.

Because it is an internal matter.

I intend pursuing this matter further on another occasion. I should like to ask the Minister of State if the memorandum of association of the ACC is lodged in the Library of the House or in any other place where its terms can be scrutinised by Members or the public.

It is lodged in the Companies Office.

In view of the fact that this is a company existing under statute would the Minister consider it appropriate that the memorandum of association of such a company should be lodged in the Library of the House as well as in the Companies Office?

There is no problem about that. That can be done if the Deputy wishes.

I would be obliged if that was done.

Question put and agreed to.
SECTION 9.
Question proposed: "That section 9 stand part of the Bill."

I should like to raise a point in relation to subsection (a). That subsection states:

(a) undertake, promote, engage or participate in, manage or supervise any scheme or project which, in the opinion of the Corporation, will, or is likely to, increase, whether directly or indirectly, the productivity of, or be otherwise of benefit to, agriculture, horticulture or fisheries,

I read that provision as allowing the ACC complete freedom to engage in any agricultural enterprise on their own account. It seems to allow them, for instance, to run State farms, to buy up large tracts of land and run farms. It seems to allow them to set up their own processing plants in competition with processing plants in the private sector. Generally, it seems to extend the level of public participation in the agricultural sector of the economy to a wide extent. I know that the ACC's policy has been that of a credit giving institution and that their direct participation in the agriculture economy is largely confined to that sort of activity, but I wonder whether powers as wide as those contained in that subsection should be in a Bill of this type without some check. It is possible under this subsection for the ACC to completely change their policy without referring that change to this House for approval. They could decide to devote a proportion of their resources to buying up farms and running them. I presume they could not do this without the consent of the Minister and I would like to have that confirmed by the Minister. There is an open possibility there which should not be allowed to eventualise without the further sanction of the Oireachtas being necessary.

My second point is in relation to subsection (g) which states:

(g) assist in and facilitate, in any manner it thinks proper, the formation, promotion, establishment, reconstruction or reorganisation of bodies corporate referred to in paragraph (e).

There seems to be a degree of overlapping here between the ACC, the ICC which I believe have similar powers, and, possibly, the IDA. I believe the latter have similar powers to become involved in the reconstruction of companies. I know that in the agricultural processing field the IDA are already heavily involved. If there is an overlap, is that overlap desirable from the point of view of State policy in view of the fact that the ACC, the ICC and the IDA are responsible to different Ministers? However, there is a possibility of overlapping with the result that diverging policies could be pursued by different State bodies in relation to this matter.

In relation to the first point, it is not subject to the Minister's approval under the Act but the Minister, being the only shareholder, would have a say. As far as overlapping is concerned, that is possible; but generally the ACC, the ICC and the IDA have working arrangements under which they avoid overlap. The objective in this section is to give the ACC a promotion role in areas where private enterprise may be deficient. The fact is that the ACC rarely used this power.

Would the Minister of State give the House examples of where they used this power?

It happened in two cases but I would prefer not to give the details.

I can understand that. I have grave reservations about this. I am aware that the power has existed since 1961 and that we did not have a massive State take-over in agriculture in the intervening period. To that extent the point I am making is a theoretical one but it appears that the ACC, on their own initiative, have the power to get involved in areas of agriculture without even the requirement of formal ministerial consent. The Minister of State should consider whether such ministerial consent should be imposed as a condition in future. If the Minister of State indicates that he would be prepared to consider an amendment on these lines between now and Report Stage. I will be pleased. If not I will draft an amendment for Report Stage.

The Deputy must accept the fact that the Minister, being the only shareholder, would have a say in relation to any of that type of activity. I do not believe there is any necessity for such an amendment.

I disagree in general terms with Deputy Bruton because I feel if there is one criticism which can be made of the ACC in recent years it is that those provisions have not been used. There is no IDA for the agricultural industry. This section was included obviously with the intention of its extension at some later stage to cover the promotion of such projects in the agricultural field. I feel this is a very important section and although, as Deputy Bruton pointed out, it has not been used to any extent previously, I believe it could be used very fittingly now. We must encourage a greater degree of risk-taking and intensive development in the various facets of agriculture. I believe that provisions are very clearly laid down here. The only thing which seems to be lacking is their implementation.

The large farmers, unless this kind of provision is here and unless it is actually put into practice, will remain large and prosperous and the small farmers will remain small and will not have the capital and the assistance to grow as the new technologies will allow them to grow. The young farmers who do not have the capital to set up in business also need venture capital and assistance to engage in the new projects based on their knowledge and skill and the technologies which are available to them to take those projects off the ground and get them under way.

This is a very important provision. It will have a very valuable effect in the distribution and creation of wealth particularly with the people who do not have it at present. I am sure we all agree that the larger and better organised farmer who has the assets and the security behind him has done very well since our accession to the EEC. We are deficient in this area which, in my view, needs to be developed and used a great deal more than it has been in the past. It is very important to have this power there. I accept what Deputy Bruton says that perhaps it should exist in another body which have another responsibility. It is not covered by any of the other bodies but is covered here and is here to be developed. The Minister will have a say as to how it should be developed. I am not only in favour of keeping it there but in making a little more use of it.

I agree with Deputy Bruton that the powers are there. It is a bit far-fetched to talk about them buying up land. I do not know what people would think, with the price of land as it is at the moment, if a State body started buying it up. If the Minister allowed that he would not be very long in power. There is no IDA for agriculture. There is nobody to promote industry for agriculture. The reason why they have not done anything in relation to promotion is that all the existing processing firms and co-operatives are financed by the ACC. The ACC lack initiative because if they do something which is badly needed they will hurt somebody to whom they have already given finance. I do not believe there is any danger that they will plunge into this because they are caught everywhere. If they went into this the people with whom they would be in competition are already financed by the ACC. I would like to see the ACC show a little more initiative to help the small farmers. I would like to see this provision left there for that purpose. I agree that, theoretically, what Deputy Bruton says is quite possible but I do not think it is likely to happen.

I would like to come back on what Deputy Woods said. I would not like to be interpreted as opposing the exercise of those powers. My point was that there should be some control on their use to ensure that they did not prejudice the existence of other private bodies involved in agriculture. I rose originally to make that point. I believe in doing so. I have drawn attention to the power which the ACC have which would not otherwise have been adverted to.

I agree with the Deputy that the ACC should give much more attention to the exercise of the powers contained in the Bill. I suggest that the Minister might request the board of the ACC to carry out a specific review in the coming year of their policy in relation to the powers granted to them in section 9 (a) and to report to the Minister within the next 12 months how they see their role develop under such powers. The Minister should request that the ACC's review of this matter should be contained in their next annual report.

Section 9 states that the "Corporation may do all or any of the following" and goes on to say in paragraph (a):

undertake, promote, engage or participate in, manage or supervise any scheme or project which, in the opinion of the Corporation, will, or is likely to, increase, whether directly or indirectly, the productivity of, or be otherwise of benefit to, agriculture, horticulture or fisheries.

That is a very important power for the ACC to have. I agree with Deputy Woods when he said that it is vital to the smaller people. It is very important that the corporation have this power to develop, for example, small processing industries, to cater for a number of small people. It is obvious that the Minister has control because the Minister for the time being is the principal shareholder in the ACC so I do not believe they are likely to do anything that the Minister would not agree with. We should ask the ACC to look at the promotion of processing industries in agriculture particularly in areas where there are small farmers who cannot get a livelihood. I believe if the ACC engaged in this that the processing industry in particular areas could become viable.

ACC, to the best of my knowledge, have used this provision very effectively. In any areas where small processing industries have been set up the ACC have financed them and taken the risks on many occasions. It depends how one interprets what Deputy Woods said, but I would not like to see the ACC going into what we could describe as the research field because that would involve duplication. Their primary objective should be to function as a moneylending institution and to follow through that objective to the last. That is what they are there for, not for research purposes. Therefore, I trust that Deputy Woods would not have this in mind. I assure Deputy Bermingham that so far as my knowledge of the ACC goes, they have taken full advantage of this provision.

I do not think I mentioned the word "research" but in effect I talked about the risks taken in regard to ventures and projects but this depends on how one regards a situation. One might say that to engage in something new could be regarded as research but unless we begin to make some innovations and to invest some of our money there will be no possibility of creating the jobs that are necessary. In that sense I accept that some use has been made of this section but without going into a long debate, the kind of debate which, as Deputy Bruton has said, could be useful in itself, I would suggest that one of the greatest lacks on the part of the ACC has been their failure to put into operation all the possibilities open to them. To have explored these possibilities would have been to the advantage particularly of the smaller and younger farmers and to all those other young people who have the technical know-how and who are prepared to put that knowledge to use. I would support Deputy Bruton regarding the desirability of a review of this section by the ACC in conjunction with the Minister with a view to ascertaining how it might be developed in future. Unless this is done, many opportunities will be lost and many young people who are highly qualified will continue to be frustrated in the various fields of research in agriculture.

When I visited the North of Ireland recently, one of the institutions in aid of agriculture there that impressed me most was the Agricultural Trust which, incidentally, is managed by a man who worked previously in the Agricultural Institute at Moore Park. The Agricultural Trust may take over an idea which has been developed by the research people in the North of Ireland but which has not been developed to the extent that it has immediate commercial viability although capable of being developed that bit further. Having developed it the Agricultural Trust are required to sell it to private enterprise where it is worked on a full commercial basis. In other words the trust have an intermediary role between the research idea —which obviously is oriented towards commercial practice but not developed fully to that extent—and the strictly viable commercial operation. I trust that when replying the Minister will indicate the powers he will be asking the ACC to undertake. They would benefit greatly from a study of the work being done by the Agricultural Trust in the North of Ireland.

The points made by Deputies Bruton, Woods and Callanan are valid and I shall ask the ACC to review their role within the terms of this section.

The section provides for what Deputy Bruton advocates in regard to the Agricultural Trust. There is a certain amount of confusion in relation to what Deputies have said about the ACC promoting private enterprise on the one hand—this is something in which they are involved to a considerable extent—and their promotion of some activity. As Deputy D'Arcy has said, there must have been thousands of occasions on which the ACC have supported the activities of various individuals and bodies.

They are the only banking institution supporting some of these small research programmes. To my knowledge they have taken risks in instances where the commercial banks would not dare to tread.

I am pleased that the Minister of State has undertaken to have this review carried out. It is good to find him accepting suggestions of this nature from the House. However, would he be prepared to consider requesting the ACC to include some reference to the results of this review in their annual report so that Members of the House and of the public who may be interested in the corporation's policy on this issue would have an opportunity of ascertaining the position?

Question put and agreed to.
Section 10 agreed to.
SECTION 11.
Question proposed: "That section 11 stand part of the Bill."

I had tabled an amendment to this section but it was ruled out of order on the grounds that it would impose a charge on the Exchequer. I do not understand the Chair's ruling in this regard but since the ruling has been made it is not possible to discuss the amendment, the main purpose of which was to endeavour to achieve a change in the figure of £20 million in the share capital of the ACC. It may transpire that because of inflation it is found necessary to alter that figure to, say, £30 million. A great deal of the time of the House can be wasted by having to bring in a totally new Bill for the sole purpose of changing a figure in an existing Act.

Is the Deputy discussing the amendment?

As the amendment has been ruled out of order I am discussing the section. Perhaps the Minister would consider providing, by way of amendment, an order making power subject to its having an affirmative vote here, as a sanction to enable him to alter some of the money figures specified in the Bill, thereby obviating the necessity of going through the full process of a new Bill. If we had an order of the nature I am advocating it could be debated here on its own when necessary. This would speed matters up and would enable financial limits which tend to become out of date, particularly in times of inflation, to be adjusted more easily in order to take account of reality. I trust the idea will appeal to the Minister.

On the first point, we are satisfied that £20 million will be sufficient share capital.

I am not questioning that.

The Deputy referred to the necessity of coming back to the House in the near future seeking to increase that amount. Regarding the amendment that was disallowed, share capital is a matter of fundamental importance and, in accordance with standard practice, should be catered for by statute only. Apart from this consideration, the practical advantage of doing otherwise would be nil because it would probably take as long to get a motion through both Houses as it would take to put through a small Bill.

I do not understand paragraph (b) of subsection (6). The subsection reads:

(6) The Minister may, for the purpose of compliance with so much of the Companies Act, 1963, as requires that there shall always be at least seven members of the Corporation or for the purpose of providing a person appointed or about to be appointed a director with any qualification required by the articles of association, do either or both of the following things:

(a) transfer to any person one share for the time being held by the Minister,

(b) require any member of the Corporation to transfer any such share held by him to the Minister or to any other person nominated in that behalf by the Minister.

Is it absolutely necessary for a member of the board to hold a share in the company, even though he is appointed by the Minister? If so, what is the reason for that requirement? Is it of any practical value? It seems rather odd that the Minister should be able to require a person who holds a share to just hand it up. Presumably a share is something of value.

Generally each director is given a share. It is normal when a directorship ceases to hand it back and this applies in the event of that not being done.

It is purely theoretical.

Question put and agreed to.
SECTION 12.
Question proposed: "That section 12 stand part of the Bill."

There is a provision in subsection (3) (a) whereby the Minister can bear losses on foreign currency incurred by the ACC as the result of depreciation in the value of currency in which they are holding some of their assets or, alternatively, receive the gain if they happen to back a winner and invest their moneys well. If the Exchequer adopts a policy of taking all gains and bearing all losses in relation to the ACC's holdings of foreign currencies, it would seem that the ACC have little incentive to be careful about the way they purchase foreign currency because they know that the ACC will not suffer one way or the other. If they happen to buy the right currency which rises in value the Minister will take the gain and if the currency declines in value the Minister will bear the loss. I realise this is qualified by the fact that the Minister is the principal shareholder and he can direct them as regards general policy, but a matter like this would not be referred to the Minister and would be dealt with by the ACC themselves. What is the thinking behind this provision? In practice would the Minister exercise this power only in the event of a very large loss or gain?

In general the ACC carry their own exchange losses and receive gains as well. They do so at normal commercial risk. The Minister for Finance agreed to bear exchange losses on World Bank loans because that was a condition imposed by the bank. That is the only case in which it was done.

Question put and agreed to.
SECTION 13.
Question proposed: "That section 13 stand part of the Bill."

Would the Minister of State give some details about the advances he has made to the ACC in the recent past?

Total advances amount to £12.5 million.

Over what period?

Over no fixed period, over so many years.

What are the mechanics whereby these advances are made? Is it a standing figure that the ACC have with the Central Fund which they can use at any time or were they given on a particular day a cheque for £12.5 million which they have had ever since?

It is only done on rare occasions as required.

Are they in receipt of any advances at the moment?

They have £12.5 million.

Is that just recently?

It goes back over a number of years. It is three years. It is three years since the last one.

What are the purposes?

It is only if they cannot finance their lending programmes from other sources that they would go to the Minister for Finance.

Is any standard repayment requirement imposed on the ACC or are these absolute advances that do not have to be repaid at all?

It depends on the conditions at the time, but the interest rate chargeable to the ACC is the Exchequer lending rate applicable at the time the advance is given and that is paid twice yearly.

Is it only a loan?

It is only a loan and can be called in or they themselves can decide to pay it off whenever they so wish.

Question put and agreed to.
SECTION 14.
Question proposed: "That section 14 stand part of the Bill."

I should like to know if the provisions of subsection (4) have been fully complied with in that the Minister is obliged in respect of each guarantee, that is, the guarantee of each loan undertaken by the ACC, to lodge in the Library of the Oireachtas the particulars of the guarantee. That provision is not complied with merely by the Minister lodging a statement in the Library of the Oireachtas giving in general the total amount of loans undertaken by the ACC and guaranteed by the Minister. It is complied with only if the particulars of each guarantee are lodged. That is quite clear from the wording of subsection (4). I should like to ask if the provisions have been complied with in full.

Yes. They have not been done yet for 1977 but when they are done they will be laid before the House.

Will this give particulars of each individual guarantee?

How long after the guarantee has become effective are the particulars laid before the Houses of the Oireachtas?

They are given annually, whatever takes place during the year.

In view of the fact that the purpose of lodging particulars of a guarantee is to enable Members of the Oireachtas who are interested to make sure that the Minister is not granting guarantees irresponsibly and unwisely undertaking liabilities on behalf of the taxpayer and also in view of the fact that the financial situation justifying the guarantee could change rapidly for the worse, would the Minister of State not agree that it does not afford any significant protection to provide that the particulars of the guarantee should be given to Members of the Oireachtas up to 12 months after the guarantee has taken effect? Would he not agree, therefore, that in future he would comply with the provisions of this section as and when the particular guarantee becomes effective and that every time a guarantee is given he will lodge particulars?

It is generally accepted that these things are done after the end of the financial year as soon as the figures become available. That has been sufficient.

Would the Minister of State not agree that the figures concerned are available to the Minister at the time a guarantee is given? He must have the information; he does not have to wait until the end of a financial year to know what he himself has done. Why must the House wait for 12 months, during which time the financial situation may have changed considerably?

I think it is better to give a complete statement rather than be coming in at irregular intervals.

Would the Minister of State not agree a statement would be more complete if the information were given when it becomes available?

Not necessarily.

Would it not be better rather than wait until a year has elapsed during which time the only information in the Houses of the Oireachtas—namely, the statement for the previous year—is rapidly becoming out of date? If the Minister wants to give a complete statement he should give all the information as and when it becomes available rather than wait for 12 months and then lodge the information at a time when that information will only be complete on the day it is lodged and may become out of date the following day, if another guarantee is given, information about which would not become available for another 12 months?

I do not think there is any necessity for it.

Why have the provision if one is not going to give the full information?

The complete information is given every year.

Up to 12 months after liability has been undertaken.

Not necessarily. There might be a guarantee in December and that would be known shortly.

I will introduce an amendment on Report Stage.

Question put and agreed to.
Sections 15 and 16 agreed to.
SECTION 17.

I move amendment No 4:

In page 10, lines 49 to 53, to delete all words from and including "nominated" in line 49 to the end of the subsection and insert "elected to either House of the Oireachtas, he shall, on being elected, cease to be a director of the Corporation".

My purpose in tabling this amendment is to allow a person to remain a member of the ACC until such time as he is actually elected. A situation could arise where, if a person were nominated but defeated in an election, he would be off the ACC for good by virtue of the fact that he was nominated even though at the end of the campaign, perhaps 21 days later, he would again be eligible to become a member because he had not been elected to the Dáil. Membership of the ACC is in some sense a political office, not in a party sense but in the sense of an office exercised in delegation of the functions of the Minister. Members of the board are people with a knowledge of public policy and it is quite likely that such people would have an interest in becoming Members of the Oireachtas. If members of the board are nominated but fail to be elected they automatically lose their positions in the ACC. I realise that there is the problem that, if they were nominated, they might use their positions as members of the ACC during the campaign to gain support. I would not wish my amendment to facilitate that sort of operation because it would be both dishonest and undesirable. Perhaps the Minister would consider, instead of accepting my amendment, some provision to enable members of the board to continue as members but not to exercise their functions for the duration of the campaign or put some constraint on them to avoid any suggestion that they might be using their positions for political purposes.

I could not accept this amendment. I do not believe any Deputy or Senator would agree that sitting directors on any State board should be placed in the position of possibly canvassing as prospective candidates in an election. That could not be tolerated. I have no objection to the provision. Deputy Bruton says he would not like to do anything that would facilitate the possibility I have mentioned. I could not accept the amendment. This provision appears in many other Acts. It has worked extremely well.

I think Deputy Bruton's suggestion of temporarily suspending a member is an excellent one. If elected he could resign. If not elected he would still be a member of the board but I am inclined to agree with the Minister of State because of the possibility of abuse.

I am so inclined, too.

I do not think we should start playing about with words here. By and large, everyone accepts the situation.

The Minister of State is probably right.

Amendment, by leave, withdrawn.
Section 17 agreed to.
SECTION 18.
Question proposed: "That section 18 stand part of the Bill."

It is almost 30 years since the subject matter of this section was the subject of a lengthy and colourful debate here in February 1947, approximately two months before I was born. Deputy James Dillon was particularly eloquent in his criticisms of the provisions of this section. I think he was a little more suspicious of the motives of the Government than was actually warranted by subsequent events. I would like to ask the Minister now how this provision with regard to ability in the use of the Irish language operates. What sort of tests are imposed on staff to ensure they get this credit? How much credit in monetary terms is involved? What is meant by the phrase in subsection (d) "subordinate duties"? Apparently people in a subordinate capacity are not entitled to get this credit even though they may be fluent gaelegeors? If one is not subordinate, whatever that means, one can get this credit if one is able to speak the Irish language. Is that really fair? I presume that what is sauce for the goose should be sauce for the gander. Perhaps the Minister of State would elaborate on what actually happens?

I take it that it is a matter for the ACC as to what credits will be given for the knowledge of Irish.

What credit do they give?

That is a matter for the ACC in relation to the post in question.

Does the Minister of State know?

This is a matter for the discretion of the ACC board in consultation with the Local Appointments Commission.

Do they give credits for the ability to speak Irish?

I am sure they do.

I would like to know whether they do or do not. I do not expect the Minister of State to have every fact about the operation of the ACC at his fingertips, but we are authorising them to give credits. It is a re-enactment of an existing provision. We should know what we are authorising in relation to the giving of some preferment to people who speak Irish.

This is a new provision. Irish was essential before, but now the provision allows the ACC in consultation with the LAC to give credit for Irish.

It seems that the board of directors have the authority. What criteria are they using to set standards?

It is a matter for discussion between the board and the Local Appointments Commission whom they consult about any posts they have.

Can we take it that it is really not the directors who will use the criteria but the Local Appointments Commission?

There will be consultation between the two.

I thank the Minister for clarifying the fact that up to now Irish was compulsory, but that now a financial credit scheme is to be introduced for people who speak Irish. Is this a new departure in public policy in relation to bodies of this nature? I believe it is the Minister of State's Minister who is responsible for the promotion and the use of Irish in the public service. Will this institution of credits for people who speak Irish be adopted on a systematic basis across the whole public service? If so, we should hear a statement as to the thinking behind this proposal. I can see difficulty in a system of credits where the credits could be so easily availed of that everybody with two words of Irish could get a credit so that there would be practically no incentive involved, or alternatively the standard could be so high, and the credit so substantial, that people would receive credits for ability to speak Irish, although that ability would not be necessary in their jobs. I understand that in some aspects of the ACC's operations the ability to speak Irish would be very important. For instance in the local office in the Gaeltacht the ability to speak Irish would be vital, but for an officer in headquarters in Dublin who would not be dealing with the public the ability to speak Irish would be unimportant. Since we are authorising a credits system, and since this is a new provision that seems to mark a departure from the previous policy, the House is entitled to a little more information as to precisely what is intended to be done under the new powers which the ACC are being given in section 18.

Previously, Irish was essential, but the position now is that people who have Irish will get a credit. It will not be financial, it will be marks at an interview or an examination. The details have to be worked out between the ACC and the LAC.

For promotion?

It does not apply to promotion.

Credit for what?

For having Irish.

If the credit is not financial and it does not help one with promotion what sort of credit could it be?

For employment.

It is in relation to taking on new staff? If they speak Irish they will get credit at the interview?

It is only for new staff, not for promotion.

Could the Minister explain what "subordinate duties" mean? Who are the people who will not be allowed to get these credits?

Subordinate duties are normally the duties of cleaners and staff like those in the ACC.

But not the secretarial staff? They would be in a position to get credits?

Will the Minister spell out in some detail what this credit means? I take it that it involves entrance into employment in the ACC. If we are making a provision here we should have some indication of what this means. I presume on a points system one would get a few extra points for being able to speak Irish.

The Local Appointments Commission are involved and the matter will be worked out between them and the board of directors of the ACC.

The Minister should have a look at the categories of people who are being excluded to see if it is fair to exclude people who are employed in what are very loosely described as "subordinate duties". The relevance of Irish may be no greater for many of the people involved in non-subordinate duties who will get credits for their ability to speak Irish than for those involved in subordinate duties. If the object of the provision is not so much to aid the efficiency of the ACC in dealing with Irish speaking members of the public but to promote generally the use of Irish regardless of whether it may be useful, the credits should apply to everyone. If the object is to aid the efficiency of the ACC I agree that the credits should apply to those involved in dealing with the public through Irish.

The question is that section 18 stand part of the Bill.

According to what has been said it seems that extra marks will be given at an examination for the knowledge of Irish. A situation could arise where none of the people with a knowledge of Irish would reach the required standard, even with the bonus marks, and the ACC could find themselves with no Irish speaking staff. It is not now compulsory for any member of the staff to have Irish. The ACC could find themselves in a situation where they would have nobody on the staff capable of dealing with an Irish speaker from a Gaeltacht area seeking a grant. This is an important point.

I do not believe that it could occur that there would be nobody with a knowledge of Irish on the staff. I am sure that when the board of directors and the Local Appointments Commission sit down to decide on what credits will be given for Irish they will ensure that there will be a sufficient number of Irish speaking people in their employment. I will have a look at the points raised by Deputy Bruton and I will see what can be done.

Question put and agreed to.
SECTION 19.
Question proposed: "That section 19 stand part of the Bill."

I raised a point on Second Stage in regard to where the Minister for the Public Service controls the salary of the chief officer of the corporation. He does not control the salary of the second or third in command of the corporation. He does not control the salary of some people who might be brought in for special skills, for instance the law officer of the corporation, but he does control the salary of the chief officer. I am not speaking now of the ACC; I understand in other public bodies to which this provision applies—and it applies to nearly all public bodies which are based on statute—the chief officer, as a result of the Minister exercising his control, was in some cases earning less than people who were working under his direction. That is not desirable.

To an extent one's salary is valuable not only from its monetary point of view but also as an indication of the public's appreciation through the Minister of the value of the work one is doing, and it does not seem appropriate or conducive to the proper running of a body like this that a situation should be allowed to arise whereby a man who is the top man who has to take the responsibility, subject to the board, for all decisions, should be earning less than people whom he has the responsibility to direct.

Deputy D'Arcy may have some evidence from closer knowledge of the operation of the ACC that this has occurred in the ACC. I have no such evidence, but I think it has occurred in other public bodies. I ask the Minister for State if he will make a statement of his Government's policy in relation to this matter and if he will ensure that this situation does not arise in the ACC. I know that this is a matter for the Department of the Public Service rather than for him but I ask him to consult with his Minister, who is also Minister for the Public Service, with a view to giving such an assurance, if not now then on Report Stage.

I agree with Deputy Bruton on this point. I cannot see why the right to decide the salary of the most important officer in any of these organisations should lie with the Minister. Deputy Bruton has said that this has happened in other institutions as a result of this provision which we are now considering for the ACC. While this did not happen in the ACC it almost happened there. I cannot see why the Minister wants to retain this power. We have had fixed wage agreements for the past five years or so, and surely it should be left to the discretion of the boards of directors to state what the remuneration of their chief officers should be. This has caused serious frustration in a great many areas over the past three years in particular and unless the Minister has some extremely sound reason for retaining this power I believe it should be withdrawn. If the board of directors are to have the responsibility of the entire staff of an organisation I cannot see why they cannot be entrusted with fixing the remuneration of the chief officer concerned.

This provision was in the 1975 Act and it is being included in any Act that does not already contain it, as the occasion arises in the Dáil. The Minister was very strong in this regard in his reply to Second Stage. He would question the competence of any board where as suggested by Deputy Bruton, the chief officer would have less than some subordinate officers.

It could happen and it has happened.

If it does happen the matter of competence of the board in question is raised and it is something that would have to be looked at very seriously. This is a matter of the Government's pay policy and as a result of the chief executive's salary being approved by the Minister, the salaries of all the staff are concerned then, and it is a matter for the Government's pay policy being implemented. With regard to some specialised staff or some unusually skilled people being required, if they be required on a part-time basis or temporarily, the matter can be discussed between the board and the Minister. The Minister is quite emphatic in regard to this provision and is anxious that it be fully adhered to not only in relation to the chief executive but down the line as well.

Is the Minister for State aware that this has caused serious frustration in certain semi-State bodies? If he is not he should make himself aware of it. I have evidence that it has happened. Will the Minister for State answer?

There is serious unrest with everybody about pay and conditions at all times.

Is the Minister aware that this has caused serious frustration in some semi-State bodies as a result of its implementation?

I am not so aware.

I suggest that he make himself so aware.

If the Minister is so concerned about the matter as the Minister of State says, why is the control confined just to the chief officer?

The Minister in his reply to Second Stage debate expressed his concern in this regard.

As he is concerned why is he concerned only about the salary of the chief officer not of other officers?

He feels that so long as the control is exercised in relation to the chief executive officer the differentials there will be maintained right down to the bottom.

As a result of a report brought out two or three years ago— I cannot name the report at the moment—the chief executives officers' remuneration was frozen. I am sure the Department of Finance are well aware of all this. Can we take it that this will never happen again?

Question put and agreed to.
SECTION 20.
Question proposed "That section 20 stand part of the Bill."

In view of the fact that this is a new section perhaps the Minister would give an explanation as to why it is necessary.

Section 20 relates to superannuation provision and terms governing the grant of pensions, gratuities, allowances or other payments on the resignation, retirement or death of a member of the staff of the ACC or any other arrangement to provide benefits additional to these. It shall not take effect unless it has the consent of the Minister for the Public Service. As the corporation already have a superannuation scheme which, in accordance with their Memorandum of Association, is subject to ministerial approval and which is governed by a trust deed, it is felt that for the purpose of overall supervision and coordination of superannuation in public sector employment it is sufficient to provide for ministerial control over any future changes in the superannuation terms.

I do not claim to understand the superannuation aspect of pay, but I take it that in this instance the superannuation fund will be contributed to by both employers and staff and that they will undertake the full cost of creating the fund. In such circumstances why is it necessary that the Minister should control the scope of the fund if the contributing parties wish to change its terms?

It has been controlled already in accordance with their memorandum of association. This provision is to cater for any new future changes.

There is still the question of public policy. The full cost of fund maintenance will be borne by the staff. If that is not so, who else will contribute, and how much?

Partly staff and partly the company.

Will there be any contribution by the Exchequer?

Not as far as I know.

What will be the relative rate of contribution as between staff and company? If the only contributors are to be the staff and company, why should the State, through the Minister for the Public Service, have control?

I do not have the details of the scheme.

The purpose of having a company separate from the State is that they would be able to function separately. If, as the Minister has said, he is to appoint members of the board of directors, he has a general overseeing control and I should have thought that that control would be sufficient, that he would allow the company and staff to make their own superannuation fund arrangements and that he would have sufficient confidence in the company to allow this to be operated without requiring the approval of the Minister for the Public Service for any change in the terms of the fund. I could understand such control in the case of salaries: there might be questions in regard to general pay policy. However, we are talking about a superannuation fund, about pensions, and I should be grateful if the Minister would explain more fully why this control is necessary. Is it because he thinks the ACC might give more favourable conditions to their staff than other State companies?

There is a common approach by the Department of the Public Service to superannuation. There is an effort to evolve a common superannuation scheme for all public servants.

Is this control in relation to superannuation normal or are the ACC the first company to be so bound?

This was introduced when the opportunity arose, just as in the case of the CEOs.

Which companies in the public service are subject to such control and which companies are not?

The only one I know of is Nítrigín Éireann.

(Cavan-Monaghan): Is the Minister saying this provision is being inserted and that State companies are being controlled in respect of pensions at the same time as they are being controlled in respect of CEOs' pay?

It is all part of Government pay policy.

(Cavan-Monaghan): Has the control been introduced in respect of CEOs' salaries in cases where superannuation control has not been introduced?

That could be so but I am not sure.

(Cavan-Monaghan): I think the practice has been to introduce a section controlling the pay of the CEO but this is the first occasion on which at the same time a provision has been introduced to control pensions.

It was introduced in the Racing Board two years ago.

(Cavan-Monaghan): Am I correct in thinking that on several occasions CEOs' salaries have been controlled but their pensions have not?

It is unlikely.

(Cavan-Monaghan): I can tell the Minister it is so.

Does the Minister not agree that instead of doing this piecemeal he should make up his mind to do it for all State bodies once and for all in one Bill? Otherwise some State bodies will be subject to control and others will not, and those not subject to such control could engage in putting up their prices, so to speak, and we could have precedents by those without control which would be emulated by those subject to control. Is this a desirable provision, doing it in this piecemeal haphazard way? Because this is being done in this way, some State bodies may not be subject to this kind of legislation for 20 years and their pension funds will remain uncontrolled.

That will not be so. Where the opportunity arises we will bring in legislation.

The opportunity may not arise.

Where it has not arisen the Minister for Finance has been in touch with State bodies pointing out this position to them.

So he has been exercising control without statutory authority.

Exercising pressure rather than imposing control.

(Cavan-Monaghan): A number of Bills were introduced in the recent past in one of which control was taken over the salaries of CEOs but control was not taken over pensions as is being done here. Why have the ACC been singled out?

Which Bill is the Deputy talking about?

(Cavan-Monaghan): A number of Bills.

Give us one.

Progress reported; Committee to sit again.