Under section 2 the Minister proposes to take constructive action on the movement towards equality in relation to female taxation. This subject has been debated fully and we have all heard comments from various quarters but in the Bill we have the first positive indication of a change in the structure of taxing females. It is now proposed to permit married women to opt for a combined assessment of taxation with their husbands. That is a new freedom and it is my view that all married women will welcome it.
The provisions in section 7 give us another indication of the Minister's anxiety to get individuals involved in the firms where they are employed. In this section the figure of £2,000 has been detailed as acceptable for the acquiring of shares and this measure gives employees working in a public company an opportunity for real participation in that organisation. It is acceptable and desirable within companies that the individuals creating the wealth should now be encouraged by section 7 to be actively involved.
In a company producing good results the figure of £2,000 would give a welcome income to an individual who has contributed over the years to that organisation. Because it is a public company the figures are available, and the individual knows that his or her investment will be soundly based on practical results over the years. It is to be welcomed that the Minister has recognised the reasoning that individuals should have the opportunity of investing in the company to which they have devoted their energies and been dedicated over the years. The figure of £2,000 is realistic in today's monetary terms. Section 7 will find great favour with a number of people.
In section 9, positive action is taken in an area to which a good deal of lip service has been paid in the past. The cross-Border worker taxation arrangements, as outlined in section 9, for the first time create a real incentive and give real encouragement to cross-Border development. There is no doubt that there is a good deal of interchanging of labour along the Border and section 9 recognises this and gives it due attention. It rectifies what has been a positive problem in getting tax assessments from the Revenue Commissioners on both sides of the Border. There were adverse effects on people's finances because of the lack of this provision. Section 9 will find wide favour in that part of the country. There will be a greater utilisation of the committed EEC finance available for cross-Border development. It will smooth that path and is a very welcome measure.
Section 19 which deals with manufacturing companies develops a formula for easy progress in the area of company expansion, with the proviso of an increase in employment. The 3 per cent growth, interlinked with the 25 per cent corporation tax relief and the 19 per cent increase in sales in 1976, is a very neat financial package and gives the small manufacturing organisations some worthwhile relief so that they are not tied up in red tape and Revenue Commission bureaucracy. It is a positive, clear-cut method of assessing growth and increased employment.
In section 19 the onus is fairly and squarely on the companies' auditors. This minimises the necessary paper work and also recognises the reasons why companies should expand and increase employment. That is in direct contradiction to Deputy Desmond's philosophy that there is no real incentive for the private sector to create new jobs. I disagree with Deputy Desmond. I do not know how any private company or semi-State company could prosper financially without creating employment. While we may be in an era of automation and technical advance—and possibly the level of knowledge of the employee may have to be higher—if companies are to earn more finance they must increase output particularly in the manufacturing sector. Naturally that requires additional jobs.
It is totally incorrect to state that the private sector can profit greatly and yet not create new employment. The Revenue Commissioners have a great insight into public and private companies. With the information gained by assessing companies' accounts over the years expertise is developed, and the Minister can readily know how companies are performing and whether they are making excessive profits. Any Minister charged with the responsibility of looking after our financial affairs will give detailed and due recognition to performance in the area of profit making.
Our company taxation provides a fair balance, around 50 per cent. In the Bill there is also potential for relief on the reinvestment of profits which is another indication of the Government's strategy planned, if you like, on the private sector. There is a benefit to the community at large in the job creation area by giving this type of reinvestment relief on company profits. When one tries to identify State investment and State involvement in the private sector, one walks a very tight rope. It needs to be carefully balanced.
In the Finance Bill and in the budget the Minister has balanced the country's finances very intelligently. The private sector has been given the necessary encouragement to invest and expand and create the necessary jobs. The Minister can still collect a satisfactory level of company tax. It is wrong to suggest that the private sector will profit too much from this budget. It will not, and that suggestion should be denied positively in this House.
On 1 February the Minister introduced the budget and dealt in great detail with overall financial policy. Since then, this aspect has been highlighted and it is neither helpful nor factual to over-emphasise the advantages in the budget for the private sector. The job creation programme is outlined in the documents accompanying the Minister's speech detailing 10,000 new jobs in the public sector. If my reading is correct, there will be 3,170 jobs in the building and construction industry of which 1,670 will be direct labour. Here we have a mixture of some 50 per cent new job creation by central or semi-State agencies.
Surely this mix is an acceptable arrangement between State investment and private enterprise. The figure of 50 per cent is satisfactory. There will be major investment in many areas— roads, hospitals, IDA factories and so on. The Minister is to be complimented on recognising the need for rapid development in the building sector, a sector which had slowed down to a snail's pace in the concluding years of the Coalition's term of office.
I am having difficulty in assessing the true unemployment situation in my constituency. The overall unemployment figure is available, yet there has been a great increase in the number of advertisements in the situations vacant column in the daily newspapers. There is a need to study this area in order to determine the balance between the number unemployed and the many organisations seeking staff. While there have been many representations made to me in regard to unemployment in my constituency, it is certainly not the biggest problem. The Minister and some of his colleagues in the Cabinet should discuss ways and means of placing more unemployed people in the newly-created situations.
The youth employment scheme is already under way. In my constituency a number of schemes were proposed for youth employment and some of these schemes are being implemented. The recruitment of 150 first-year construction apprentices by local authorities is desirable. I hope that the finance made available for that scheme will be fully utilised.
The proposed incentives mean that manufacturing industries will have the facility for further investment. The free depreciation which will be available to industrialists for expenditure on new buildings with effect from 2 February is very desirable. This clear-cut financial policy will allow companies to build new premises which will, in turn, create more employment. The financial arrangements for those two schemes and the free depreciation being allowed for new plant and machinery are incentives to industrialists to expand.
Another great aspect of this Bill is that small companies will have their corporation tax thresholds raised from £10,000 to £20,000 and from £15,000 to £35,000, depending on their category. Much has been said of the need to assist small companies. In increasing the tax thresholds for those companies the Minister has given them reason to expand and reinvest.
The assumption of the exchange risk liability by the Exchequer for the Industrial Credit Company with the European Investment Bank is also very desirable. In the past five years nonsterling currencies changed their values rapidly and created burdens for people who were not international financial experts. It had a detrimental effect on companies investing in equipment outside the sterling area as the fluctuations were excessive and threw the investment programmes of small companies into chaos. The recognition of this anomaly by the Minister is a move in the right direction.
The new duty-free facility should assist the sale of Irish products. There is no doubt that the commuters between our two countries will benefit and the output of Irish companies should increase as a result of this positive move.
Much has been said of the abolition of the wealth tax. It has been said that it was unworkable, inefficient and did not justify the reason for introducing it. We recognised the problems in this area and the Minister has taken positive action. The lack of comment from the people who are supposed to be most upset about it may be frustrating for the Opposition. The abolition of this tax has not created complications and we are better off without it.
The taxation of farm incomes has already been dealt with. The amount of finance to be derived from this source —£24 million—is a reasonable contribution, particularly when one considers the need for reinvestment in farming. There must be a balance between the taxation policy and the need for investment in farming. It is hard to assess Deputy Desmond's criticisms of the abolition of tax on co-operatives.
Here is the ideal control arrangement for worker participation in an organisation. The co-operative is the ideal way for everybody involved, the farmer members and the employees, in getting the maximum return for investment. Normally over the past ten years the need for equipment investment in the rapidly expanding co-operatives has utilised the finance produced in the way of profits. If any co-operative was profiteering excessively, naturally those members and the individuals employed were going to get the benefit. If there was a great need for further investment in capital expenditure, naturally the co-operative would invest in that area, and this would create employment. The employment thus created would normally be in the country and away from the highly populated areas. How any Government could justify the taxing of co-operatives is beyond the understanding of this side of the House and the Minister at the first available opportunity has abolished such taxation. This will make a real possibility for these organisations to expand, to create employment and to invest continually in the food processing industry, and this we all agree is highly desirable. Over the years we have had many reports and heard many comments on the need for added value and for further processing. When one wants that sort of expansion, to tax the organisations endeavouring to achieve the maximising of Irish food exportation does not make a lot of sense. In abolishing the tax on co-operatives the Minister for Finance has taken the right decision. A qualification on the abolition of that tax which, is very desirable, although it may not meet with favour from a lot of the processors, is the fact that sales to intervention will not be exempt. This is a positive step towards urging on our co-operatives—and also private enterprise in the food processing area particularly—that they cannot abuse the EEC floor prices guarantee situation by putting their products into intervention. It is up to the co-operatives and the private operators, as the Minister for Agriculture has urged recently, to sell their products other than to intervention. The fact that the Minister has recognised this and has exempted sales to intervention agents is a welcome and progressive step.
Regarding value-added tax, I welcome the provision for the restoration of the 1 per cent recoupment allowed to VAT-registered customers of unregistered farmers in the income tax year 1978-79. The provision for the option of different methods of assessing tax is also welcome. I would like to think that many farmers will opt for the accounts system which will enable them to organise their affairs efficiently and they will see a real return on capital invested and so will get the maximum advantages of the tax system. They will realise that borrowing and reinvestment done constructively with the assistance of their accountants will bring investment and progress into farming.
The Bill should bring about the right financial mix for the private sector, the semi-State organisations and the co-operatives. There is some financial relief for employment-creating agencies. The Minister in balancing the situation has created the environment for job creation which is so much part of the integral plan of our Government.
We are now at the halfway stage of 1978, and the budget and the Finance Bill giving effect to it have already proved that this was the right financial strategy. The private sector have the opportunity of expanding and of contributing their fair share of tax. For the individual there is a purpose in striving to progress and to improve his income because the taxation burden is far lighter than it was under the previous Government. We heard time and time again, particularly in the last two years of the Coalition's term of office, that it was no longer profitable to work. The high taxes were a great disincentive. The number of manufacturing organisations could not get staff to work overtime in food processing which could have increased our exports.
The financial strategy may be criticised from the far side of the House, but the record stands and contradicts the argument now being put forward by members of the Opposition on this Finance Bill. I welcome the measures in it and I believe it will achieve its aims.