Limerick West): It has been agreed to take Financial Resolutions Nos. 1 to 6 together.
Financial Resolutions, 1983. - Financial Resolution No. 1: Televisions.
I move:
(1) That the duty of excise on televisions imposed by paragraph 5 (1) of the Imposition of Duties (No. 236) (Excise Duties on Motor Vehicles, Televisions and Gramophone Records) Order, 1979 (S.I. No. 57 of 1979), shall be charged, levied and paid, as on and from the 10th day of February, 1983, at the several rates specified in the Schedule to this Resolution in lieu of the several rates specified in the Sixth Schedule to the Imposition of Duties (No. 259) (Excise Duties) Order, 1982 (S.I. No. 48 of 1982).
(2) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).
SCHEDULE
RATES OF EXCISE DUTY ON TELEVISIONS
|
Description of Televisions |
Rate of Duty |
|
Colour televisions: |
|
|
with a screen the maximum dimension of which does not exceed seventeen inches |
£78 the television |
|
with a screen the maximum dimension of which exceeds seventeen inches and does not exceed twenty-four inches |
£98 the television |
|
with a screen the maximum dimension of which exceeds twenty-four inches |
£121 the television |
|
Monochrome televisions: |
|
|
with a screen the maximum dimension of which does not exceed seventeen inches |
£24 the television |
|
with a screen the maximum dimension of which exceeds seventeen inches |
£38 the television |
On the question of the increase in television licences, roughly how much is owing by defaulters?
We are dealing here with excise duties, not licences, so the question does not arise on this.
It does arise in relation to revenue.
It does not arise on this and I have not in this file any information on it. I have a figure in my head which I have heard but it would be incorrect to give the House information which might prove to be inexact.
We could not have that. We are not going to debate this budget on the basis of hearsay.
We are talking about raising revenue on televisions. There is also a licence on televisions and revenue is accumulated in various ways. I am asking the Taoiseach to tell me how much is outstanding on existing televisions. The main purpose of my question is to find out why new excise duty should be imposed instead of using resources available to collect money due to the Exchequer.
I have no desire to be unhelpful but there is no official estimate of the amount outstanding. As nobody knows who the defaulters are and how many there are, it is not possible to give an official estimate. A figure of several million pounds has been mentioned by RTE but in the nature of things I do not think there can be any official estimate. The figure would certainly be substantial by any estimate, running to a number of millions of pounds. The yield of the VAT increase here is £0.5 million and the yield of the excise increase is £0.9 million in the present year. The overall effect of the changes is therefore £1.4 million this year aid will be £1.6 million in a full year. The Deputy would be correct in saying that these figures are probably a good deal less than the amount which is unpaid in respect of licences. It is a separate subject but it is one that concerns the Government, as it has concerned previous administrations. We are anxious to take steps to catch up on as much of that licence money as possible and steps towards that end are under consideration.
In regard to this I should like to raise a query about something which is close to my heart. I assume that the exemption for pensioners in regard to television licences will be maintained. Apologies, I have fallen into the same mistake as my colleague, Deputy MacSharry, because this refers to excise duty on the sale of televisions and not television licences.
Anything done here does not have any effect on licences or the exemption of licences.
I understand that but the Minister for Finance in the course of his statement today mentioned evasion and avoidance and this is another example of the Government not being interested in tackling that aspect of evasion as far as TV licences are concerned. The amount runs into millions. The Government by this further imposition of £1.4 million on televisions are hitting at the honest taxpayer once again.
The Deputy is not correct when he says that the Government are not concerned about this. We have inherited a situation where there are arrears, as indeed did each Government in recent times. Fianna Fáil inherited it and we inherited it in June 1981. But, for the Deputy's information, the Government have had some discussion on this matter and are seeking means of catching up on these arrears and avoidance. We are trying to find means of collecting as large a part as possible of the sums that are not being paid. The Government have already concerned themselves with this and the Deputy is incorrect in saying that the Government are not concerned.
In regard to this concern the Taoiseach says the Government have, will the Taoiseach outline to the House how much it is expected will be collected by the measures to be introduced?
I have not said we have introduced measures but that the Government have discussed the question and that proposals in relation to this will be before the Government in due course. There is no official estimate of the amount of money but there are unofficial estimates of uncertain value and it would be unwise of me to give them.
How much?
As they are unofficial estimates and are not Government estimates I do not think I should give them to the House.
Is the figure of £4 million correct?
I have heard figures higher than that but they are unofficial estimates which were not derived from any information or estimates made officially. Therefore, they cannot help us in this debate.
I understand that they may not help us in the debate and that they may not be relevant to the Financial Resolution but the Taoiseach should accept that in regard to the honest taxpayers — we are all concerned about them and they were hit fairly hard today — for a small amount of £1.4 million they are being penalised and at the same time the Taoiseach cannot tell me how much was lost through avoidance. The Taoiseach agrees that it is a substantial amount but he is not prepared to tell the House the measures the Government propose to take to collect that money.
Having been Minister for Finance for about eight months and not taken any action in the matter, the Deputy is not in a position to criticise us for not having acted within eight weeks. It is a separate question to the matter under discussion. The money in question which is not being paid for television licences is not relevant to the Exchequer directly. It is relevant to the question of the RTE licence fee.
That is relevant to the Exchequer.
The level of that fee is obviously higher than it would be if everybody paid their licence fee. On that issue I agree with the Deputy but it does not arise on this resolution.
I should like to ask the Chair if we are dealing with Financial Resolution No. 1 or may we refer to the other resolutions.
If Deputies wish they can proceed as far as possible between 1 and 6 and in the event of a Member wishing to return to any item he may have overlooked he may do so. There may be a certain advantage to all of us in going through this from 1 to 6.
On a point of order, I am sure the Chair will give us the order of the House. It is not for the Taoiseach to tell us how we should discuss these resolutions.
Acting Chairman
The House may discuss the Resolutions, Nos. 1 to 6, inclusive.
I was merely offering my co-operation.
I am a little confused about the huge hikes we had on fuel oil and so on in January. Where do they arise in regard to the budget? I understood the Minister to say that he would be seeking the authority of the House for those by way of a Financial Resolution. I accept that under Financial Resolution No. 3 hydrocarbon oils are dealt with but how will the House give effect, belatedly, to the huge increases announced early in January?
As was done by the Government of which the Deputy was a member in March last year, the increases were brought in in the manner indicated and are before the House tonight in the form of a motion which I will move after the Resolutions. The motion will cover the increases introduced last month.
Will the Taoiseach explain to the House why they should be before the House by way of a separate resolution and away from the group of resolutions which are before us to implement the terms of today's savage budget? What is the reason for this? Members are entitled to an explanation as to the procedural reasons for this attitude.
The excise duty increases were introduced in January in order to avoid the loss of revenue through the delay in the introduction of the budget following the change of Government in exactly the same way as the Government of which the Deputy was a member acted last year when, again, there was a danger of loss of revenue through the change of Government occurring. The procedure was adopted in respect of the ordinary excise duty increases for what are known as "the old reliables". The resolution the Deputy has referred to relates to duty on other oils, heating oils and so on but excluding very heavy fuel oils and petrol. This is a separate imposition on a different product not covered by the excise duty increases announced in January and which will be validated by the House later this evening when we come to the resolution.
I did not ask the Taoiseach for a political explanation about the resolutions. I asked the Taoiseach to explain why the resolution on hydrocarbon oil is before us by way of Financial Resolution while the resolution to legalise the horrific increases announced in January is not on the list before us. Are we entitled to discuss those increases later tonight in addition to being entitled to discuss the terms of the Resolution before us?
Acting Chairman
They will be coming before the House later tonight and we will have a discussion on them.
I am grateful to the Chair. In that event I will deal with Financial Resolution No. 3. What hydrocarbon oils are included in that resolution? What use are they put to? Will the Taoiseach give an indication of the amount of revenue obtained from that oil in 1982 at the rate of 7p per gallon? Will the Taoiseach indicate the amount of additional revenue it is hoped to get by the imposition of the 1p per gallon increase today? I presume the hydrocarbon oil covers heavy industry and in that event it will have a serious impact on employment. I presume LPG will be used by industry and that home heating oil is also included. I should like to know what the Minister for Finance meant when he said that this would not apply to residual fuel oil used by the ESB and that there would not be any change in the concessionary rates already applying to residual fuel oil used by industry, to oil used by fishermen or for horticultural purposes. Will the Taoiseach give us a detailed account of the rates that already apply to residual fuel oil used by industry? What industries specifically, not what type of industry, but what individual industries are exempt from this?
This resolution deals with certain hydrocarbon oils and LPG which are used for non-automotive purposes, subject to exceptions. The main categories of oil affected are diesel oil used in agriculture, in industry and in commercial and home heating, kerosene, lubricating oils, and certain light oils used in industry. Residual fuel oil which is the main type of oil used in industry and by the ESB is not affected by the increase and is not covered by the resolution. There are certain duties on these oils at present: 4½p a gallon when used by the try and 7p per gallon when used by the ESB. These are not being changed. Industry is only marginally affected as the oils dealt with here are the minority of the oils used in industry and have a very limited effect. Similarly the increase is not being applied to oils used in sea fishing.
On a point of order, it is very difficult to hear the Taoiseach.
I am very sorry. I thought I was being loud and clear.
We have not got a clue what the Taoiseach is saying.
I am very sorry about that. Perhaps the microphone is not as attuned to me as I should like. The increase is not applied to oils used in sea fishing.
Is the Taoiseach going back over what he said? We did not hear what he said.
I will start again. I am very sorry about that. These duties are on certain hydrocarbon oils and LPG used for non-automotive purposes. The main categories of oils affected are diesel oil used in agriculture, in industry and in commercial and home heating, kerosene, lubricating oils and certain light oils used in industry. Residual fuel oil, which is the main type of oil used by industry and the ESB, is not affected by the increase. The resolution does not apply to residual fuel oil on which there are duties at present of 4½p per gallon in the case of industry and 7p per gallon in the case of the ESB. This resolution does not affect them and they are not changed. As the great bulk of the oil used by industry is residual fuel oil, and diesel and kerosene and lubricating oils and light oils are relatively unimportant in industrial use, the impact of this on industry is quite marginal.
In the case of sea fishing this increase does not apply. It is not being applied to oils used in sea fishing. There is a charge of 5p per gallon at present and that is not being changed. In the case of horticultural production where there is a 2p per gallon rate at present, that is not being changed. The effects on industry, fishing, and horticulture are either minimal or in the case of the latter two non-existent. A large part of the impact will be in commercial and home heating which will be affected because of the type of oil used for that purpose in particular. The Deputy also asked about the effect on the revenue: £2.7 million in the current financial year and £3.0 million in a full year.
Am I to take it from what the Taoiseach said that the reference today means that where residual fuel oil is concerned it does not apply to any section of industry?
The resolution does not apply to residual fuel oil which is the oil principally used in industry.
Full stop?
Full stop.
It does not apply to residual fuel oil. That is not conveyed in the Minister's speech this afternoon. He said that this increase will not apply to residual fuel oil used by the ESB, nor will there be any change in the concessionary rates already applying to residual fuel oil used by industry. We must remember there are two types of residual oil.
I have explained that, with different rates of duty.
Just a second. Part of the Taoiseach's problem is that he does not listen. That is why we have such a budget before us. The Minister said " ...nor will there be any change in the concessionary rates already applying to residual fuel oil used by industry". Those concessionary rates do not apply to all industry across the board. They are selective. I am asking the Taoiseach to explain clearly to the House what is involved. He said there is no increase in residual fuel oil, full stop. The implication is that there is an increase on some residual fuel oil.
No. The Deputy is reading into the Minister's wording something which is not there. Residual fuel oil is not affected by this resolution. Residual fuel oil is used by industry and by the ESB and, in the case of industry, it represents the great bulk of the oil used by industry. Consequently the impact of the resolution on industry is minimal. I hope that clarification for the third time will leave no doubt in the Deputy's mind.
May I ask you a simple question?
Certainly.
Through the Chair.
Of course. Are there two rates of charges for residual fuel oil? In other words, is there a concessionary rate for some industries as distinct from the general rate?
No.
The Taoiseach should check that.
There is a rate of 4½p per gallon chargeable on residual fuel oil used by industry and that is unchanged and unaffected by this resolution.
So we are absolutely sure it is confined to home heating, agriculture and commercial heating?
No. I told the Deputy it also affects diesel oil used in agriculture and industry and in commercial and home heating, kerosene, lubrication oils and certain light oils used in industry. These represent a very small proportion of the total oil used by industry, the great bulk of which is residual fuel oil to which the resolution does not apply.
It might be helpful if the Deputy consulted page 46 of the pink document entitled "Principal Features of Budget".
We are looking at it.
We are afraid to look at it.
The situation in relation to residual fuel oil may be a little clearer here than in the Minister's speech. That may be what is causing the confusion. If the Deputy would care to look at that, it makes the distinction in the way the Taoiseach has been making it.
It is because of these pink pages that we are asking these questions. These pink pages were not read out this afternoon. I am sure when the members of the Labour Party studied what was in them, as we did, they were horrified to see the second budget. That is why we are asking the Taoiseach to show us what other hidden budgets there may be in the Financial Resolution before the House. These pink pages contain very severe impositions which were glossed over this afternoon in the Minister's speech. They make very interesting reading. I hope the press have had an opportunity to read them and see where the real boot presses. Does the 5 per cent increase in VAT — I know we are not discussing it at the moment but it is relevant — apply also to the hydrocarbon oil increase we are speaking about?
It applies.
Yes is the answer.
If the Deputy will allow me to answer the question, it applies but is recoverable by registered firms in accordance with normal procedure.
Can farmers and home heating firms recover also? There is an imposition on farmers and there is an additional imposition in VAT, is that not the case?
I repeat for the fourth or fifth time that the resolution applies to diesel oil used in agriculture.
And so does VAT.
The Taoiseach should be honest with the House.
It applies and is recoverable where people are registered for VAT.
Deputy Fitzgerald has asked a straightforward question. I am quoting from page 46 of the pink pages to which Deputy Boland asked us to address ourselves:
Hydrocarbon Oils
|
Increase in tax (VAT inclusive): |
|
|
gallon of petrol |
15p |
|
gallon of road diesel |
12p |
|
gallon of auto-LPG |
12p |
It goes on to list further changes in hydrocarbon oils and so on, so I take it that VAT does apply in addition to the increase we are discussing.
It applies and is recoverable by registered firms in accordance with the normal procedure.
Thank you, that is what I wanted to know.
A little bit of frankness helps.
I hope the Deputies opposite read all the decisions taken by the previous Government.
(Interruptions.)
Has the Taoiseach calculated the amount of income that will arise as a result of the increased imposition on televisions and videos? Would he also inform the House how many jobs he expects will be lost in the trade as a result of these impositions? The Taoiseach may not be aware that the duty in the North is 15 per cent VAT and the increase here will now be 35 per cent VAT. As the Taoiseach is aware, quite a number of television and video sets are coming down from the North and depriving many people of their livelihood in the trade. The imposition of the increased rate of duty on televisions and videos will further damage the trade. The Taoiseach has caused more job losses to add to the 180,000 people who are at present unemployed.
Before replying to that, I was seeking to add to the information of the House. Reference was made to the pink pages, page 46, and perhaps I should read out the part which Deputy Lenihan started to read but did not finish:
The duty increase on road diesel does not apply to scheduled road passenger services. The existing rebate of petrol duty for disabled drivers has been increased to offset the duty increase on petrol.
On the question of television and video sets, I have given the figure of revenue with regard to television duties. With regard to video players, it is anticipated that the overall effect of the increases will be £.6 million in 1983 and £.9 million in a full year.
Is the Taoiseach aware that those figures are totally unrealistic, bearing in mind that a television set in the North is half the price of a set here? There is no duty in the North except VAT at 15 per cent. The Taoiseach should not be fooling the House by saying he is going to get a certain amount of revenue when he knows in his heart that he cannot prevent the movement of television sets and videos coming across the Border and depriving our people of a livelihood because of the duty which he is imposing here tonight. The Taoiseach must know he is damaging the trade but it is obvious, from the unemployment figures, that he is not interested in that area. However, we on this side of the House are interested in creating employment. This trade is very worried tonight as a result of the imposition of VAT at the rate of 35 per cent and the increased duties. The Taoiseach will not get the revenue he expects from this quarter.
The revenue figures are calculated to make due allowance for the problem which the Deputy mentions. No-one denies there is a problem in this area because although people are not entitled to import these articles, because their value exceeds the amount of the allowance, nevertheless there is a disturbing amount of smuggling. The customs officials are attempting to control this and have been seizing a considerable number of these articles from individuals travelling from Northern Ireland and paying special attention to roads with a land frontier likely to be used by persons returning from shopping excursions to Northern Ireland. In one area alone last Sunday there were 17 seizures, which is having a deterrent effect. When the seizure rate gets as high as that, people think twice about involving themselves in illegal activities of this kind. There are mobile patrols providing an integrated radio controlled system of surveillance on a 24-hour basis. Extra staff are provided where necessary and additional patrols operate at weekends. Despite the embargo on filling vacancies in the civil service, every effort is made to ensure that staffing levels in the Border areas are maintained at an adequate strength. Considerable efforts are being made to control what is a very real problem and one which is giving rise to grave difficulties for traders in Border areas. The Government recognise this and are giving priority to trying to tackle it and to achieve a rate of seizure which will discourage this type of illegal importation.
The gallon of road diesel went up by 12p on the original increase in January. Another penny is going on hydrocarbon oil. Later on, in another resolution, we are going to have an increase also in VAT on it. Could the Taoiseach tell the House what will be the price of road diesel at the pump when those three increases have been applied?
The penny on hydrocarbon oils is for non automotive carbon oils and therefore, has to be separated from road diesel oil. The figure of 12p that the Deputy read out is, as stated on page 46, inclusive of VAT so the effect on road diesel of the impositions in the budget and the net cumulative effect of what has been done is 12p in total.
Did I hear the Taoiseach correctly when he said that 12p is the total increase that will go on road diesel as a result of the budget?
I may have unintentionally mislead the Deputy. The 12p is the amount at this time, inclusive of VAT, of what has been imposed. The total tax increase on road diesel on 1 March, including excise duty and VAT, will be 21.6p.
That is more like the facts we are trying to extract, even with the limited help we are getting from the pink pages.
Is that the full story?
If I heard the Taoiseach correctly he said there would be a minimum imposition on industry and agriculture in relation to the hydrocarbon tax. Is that correct?
I am sorry it is not the whole story. I should have reminded the Deputy that the VAT element can be reclaimed by registered traders. Therefore, so far as registered traders who are using road diesel are concerned, the total tax increase will be 10.2p. I am sorry if I unintentionally misled the Deputy into thinking it would be more. I am most anxious to give the fullest information.
I accept the Taoiseach's apology. That is the second time I have been misled. It is very difficult to extract the proper information. Will there be a minimum effect on agriculture in relation to the hydrocarbon tax? I understand the type of oil we are talking about is heavy oil which we call here residual oil. I think I am correct in that. The hydrocarbon tax applies to the lighter fuel oil used in industry and agriculture.
I am not sure which resolution the Deputy is talking about.
The easiest definition of residual fuel oil is heavy fuel oil. If I am wrong on that, will the Taoiseach please correct me?
That is a good enough definition for ordinary purposes, even if it is not correct technically.
I know, but I am trying to be helpful.
I agree. The duty under Resolution No. 3 applies to certain hydrocarbon oils and LPG used for non-automotive purposes and does not include residual fuel oil, or heavy fuel oil as the Deputy has described it.
We are talking about light fuel oil which is used by industry. Not every industry uses residual or heavy fuel oil. Is the Taoiseach not aware of this?
I think I have explained that. I pointed out that this duty applies to diesel oil used in industry, to kerosene in so far as that is used in industry, to lubricating oil also used in industry and to certain light oils used in industry. Together these represent a small minority of the total volume of oil used by industry. Obviously it will vary from industry to industry and I made that clear in my earlier reply.
According to a table in the Budget Statement today there is an amount of £17.7 million to be raised on hydrocarbons. Am I correct in that?
I think there is some confusion here.
I am not confused. On the revenue side of the explanatory table issued with the Budget Statement in Item No. 3 there is the note: "Add: hydrocarbon £17.7 million." Perhaps the Taoiseach will give a breakdown of this item?
I think that was explained in the Budget Statement. It includes £2.7 million for the current year deriving from Resolution No. 3, from the impact of 1p per gallon. It consists of two things. There is the £2.7 million which the 1p per gallon to be imposed by this resolution would yield and another figure of £15 million which will derive from future increases in duties related to reductions in the price of oil arising in part from contracts renegotiated by the NPC and in part from reductions in the price of oil already in the pipeline. The £15 million is a separate item but the two together make a total of £17.7 million for the purpose of the summary table.
Will the Taoiseach tell us the intention of the Government or have they already had the agreement of the oil companies in relation to the further imposition of excise duties to bring in £15 million which has been said will not be passed on to the consumer?
Governments do not seek the permission of the oil companies to impose taxation.
I am just asking.
The Minister said in his speech that when this matter arises and when we reach the stage where the impact of the more favourable contracts with the NPC and reductions in the price of crude oil prices reach us, then further action in the House will be necessary. The House will have the opportunity of debating any proposals for an increase designed to yield the £15 million which is not covered by these resolutions. The Minister made that clear today.
I understand. I am asking the Taoiseach when he expects this will be.
From April onwards. At this stage I would not like to give a specific date. There are different components in this reduction and obviously one does not want to come to the House every week for adjustment. It will depend on the scale and time of reductions in the cost of oil for the Government to choose the best time to come to the House and seek increases appropriate to those reductions and also having regard to the part of the year remaining. It will be some time from April onwards.
The Taoiseach said he does not want to come to the House for adjustments every day. He did not come to the House on 7 January. Will he come to the House when he intends taking action on this matter or will it be done by order outside the House?
That would depend on the time when it comes about. The Deputy had the experience himself in Government of using this mechanism in order to increase excise duties so as not to lose revenue by waiting for the House to resume. In the ordinary way these matters are dealt with in the House unless the situation arises during a recess when the procedure which the Deputy as Minister used last year would be applied. For example, if an increase were required during the summer recess, the procedure could be used and it would be validated by the Dáil subsequently. However, if the Dáil is in session it would be brought to the Dáil in the usual way.
In view of the earlier statement by the Taoiseach that the imposition of hydrocarbon duties and tax would have little or no effect on industry, would he now agree that the imposition of £17.7 million in total will have a very significant effect on industry and agriculture? Could he also tell me the effect that will have on the CPI?
I said that the imposition of duties under Resolution No. 3 would have relatively little effect on industry as most of the oils used in industry are not covered by this resolution which raises £2.7 million. As regards the other £15 million, we are talking of additional taxation which would be imposed where oil prices are falling and where it would be possible to secure additional taxation either with no consequent increase in the cost of oil to the consumer, industrial or otherwise, or possibly with some reduction depending upon how much of the drop in oil prices is taken up by the increase in taxation. Therefore, a CPI effect is not involved in the £15 million and one cannot at this stage say whether there will be a CPI reduction. That would depend on the scale of the fall in oil prices during the year.
I ask the Taoiseach to please stop misleading the House about the extent to which light oils are used in industry. The vast majority of light industries and farming use light oil and diesel oil. When you talk about the big volumes of oil used in industry you are talking in total about the very heavy consumption of a very small number of very large industries who use enormous boilers which consume the very heavy oils. The bulk of light industry are affected by this and they would have been expecting a reduction in the 7p and not an increase in it. Therefore, it will have an adverse effect on a wide range of industries and on general farming because of the extent of the use of light oils there. The Taoiseach is misunderstanding the situation and I can understand why. If you take industry, the big volume of oil goes into the ESB and to a certain limited number of very big industries, that is he global volume. The volume used by the rest of light industry, which is very important in this country, relatively speaking is small. You are talking then about the bulk of light industry. That is the relationship which has been somewhat confused here in this discussion.
I would make the point that it would be uneven in industry, depending on the proportions of heavy or light oil used, and I am sure the Deputy is well informed on the point. The impact will be variable. I am sure that that is correct.
Would the impact not be more severe on the smaller industries than on some of the giants the Taoiseach is talking about?
No. Obviously, if an industry uses light oils rather than heavy oils it will be more affected by this. That is self-evident. The imposition itself, 1p, is not very heavy. Of the £2.7 million a very significant proportion of it I think would relate to non-industrial uses. Commerce, the public service and residential use accounts for almost half of the total diesel oil used in the country. The proportion of the £2.7 million which would fall on industry would probably be no more than about £.75 million. I hazard a guess. I am not seeking to give precise figures but the order of magnitude.
I would like to ask two questions and I will not ask any more on this group of resolutions. I want the figure of the CPI impact of Resolution No. 3 plus the VAT implication plus the oil increases, petrol, diesel or whatever, of 7 January. In other words, what is the effect on CPI of the oil increases in today's budget plus VAT and the savage budget of 7 January plus VAT on those? The second figure I want from the Taoiseach is the overall impact on CPI of the six resolutions we are discussing at the moment plus VAT on those. I hope that I have expressed myself clearly enough to avoid confusion of the facts.
I will take petrol separately from what is covered in this resolution.
I have just asked a question about the total figure in two cases.
I want to give the Deputy the breakdown. He will appreciate that the CPI effect of VAT on any one element is included in the CPI effect of VAT generally in the budget. We do not want to double-count. I want to be careful in the answer I give and not to mislead. The effect on petrol is .345 per cent increase in CPI for the increase of 7 January and .245 per cent for the VAT increase on 1 March giving a total of .59 per cent. So far as Resolution No. 3 is concerned the impact of the resolution itself on CPI is estimated at .014 per cent. In addition the VAT increase on 1 May of 5 per cent in so far as it relates to oils covered by Resolution No. 3 will be .083 per cent. Therefore, the total impact on CPI of taxation increases of Resolution No. 3 plus Vat in relation to these oils we are talking about is .097 per cent. The total effect of taxation on petrol both in the increase of 7 January and VAT is .59 per cent. Therefore, the figure between the two, which is obviously what the Deputy wants, is about .69 per cent.
It is .7 per cent approximately.
Yes.
The second figure is a combination of the six resolutions we are discussing and their impact on CPI plus VAT.
There are six resolutions.
The Minister's colleague will want this information very particularly after this evening's budget.
I will have to take them one by one. I will give the total effect including VAT, although of course the VAT element is counted in the CPI effect on VAT which will be listed separately in the budget resumé. For Resolution No. 1 — televisions — the impact will be .01 per cent. In the case of videos there is no significant impact but the fact that videos may not have featured largely in the household budget inquiry when the present CPI base was established means that the figures we have here probably are not totally representative. Even if they were included the effect would be very small indeed as can be seen from the amount of money involved. In regard to Resolution No. 3 I have answered that — .097 per cent is the effect of the resolution and VAT together. In the case of Resolution No. 4 there is no effect on CPI and the same is true of Resolution No. 5. CPI does not take account of gambling. With Resolution No. 6 there is no CPI effect. Foreign travel is not included in CPI.
Even if it was included you would not be able to work it out.
It is £3 million or £4 million anyway even in a recession.
It is £2.3 million in the current year so if it were included in the CPI it would be measurable.
The Minister said in his statement under the heading "Hydrocarbons" and I quote:
This increase will not apply to residual fuel oil used by the ESB, nor will there be any change in the concessionary rates already applying to residual fuel oil used by industry and to oil used by fishermen and horticultural producers.
How many companies are exempt from this hydrocarbon tax? How many companies are at the concession rates? Has the Taoiseach or the Government any plans to extend the concessionary rates?
It is not a question of companies getting exemptions. It is residual fuel oil which has a concessionary rate applied to it so that anybody who uses residual fuel oil benefits from that concessionary rate.
With regard to Resolution No. 6, I take it that in relation to foreign travel tax a change is being made in relation to subsection (1) and it will be on aircraft carrying more than 15 passengers and that the tax will not apply to aircraft, either internal or external, flying internationally which are not carrying more than 15 passengers.
No. In fact a situation has arisen where on a particular route aircraft with fewer than 15 passengers are operating parallel with aircraft carrying more than 15 passengers and this is leading to a distortion of competition. The provision exempting aircraft carrying under 15 passengers is removed by the resolution although obviously charter or executive aircraft would not be covered by it.
Does this mean that charter aircraft flying internationally will not suffer from this imposition of tax?
If somebody charters a small aircraft carrying three or four or seven or eight people this will not apply. I do not mean a large charter. If you charter the whole aircraft and there are tickets issued it is payable. That position remains.
If an operator sets up a service with an aircraft carrying 12 passengers do I take it that aircraft can fly on the international route without this tax being applied?
No, it is now being applied to such cases. It has not been hitherto. One effect of this resolution is to apply it because of a distortion of competition which has arisen on one route because it has not hitherto been applied to aircraft carrying fewer than 15 passengers.
Would the Taoiseach be in a position to indicate how many such tickets were issued last year that this tax now applies to?
No, I have not that information.
What is the possible revenue that will accrue from the tax in the rest of the year?
There were none to Knock airport.
This applies to foreign travel. It does not apply to Knock airport.
The Deputy is getting his special invitation down there and he will be sorted out. I suggest he has more than a single engine aircraft carrying him.
The Deputy is unwise to use phrases like "sorting out" in the light of happenings in recent days. The increase in revenue for foreign travel, as I mentioned to Deputy MacSharry a moment ago, is £2.3 million this year and £3 million in a full year, as a result of the increase in the rate of duty to £5 per person and, although this obviously will be very small indeed, the removal of the exemption in relation to aircraft with fewer than 15 passengers.
Would it be reasonable to assume that there were 200,000 tickets issued for foreign travel in 1982?
I would not like to give the Deputy a figure where I could mislead him. The duty came into operation on 1 September and I understand it yielded £561,000. There have been two rates of duty, £2 for people travelling by ship to Great Britain and the Isle of Man and £3 in other cases.
Do I take it that they are all going to be £5?
The Deputy would be approximately right. It might be a bit more than 200,000 for that particular period.
Will this foreign travel tax apply to a composite Euro rail ticket that would involve a sea or air passage but would also involve a considerable amount of rail travel on the Continent or in Britain?
I understand it will apply to any ticket which involves travelling from this country by sea or by air, which are the only ways you can travel from here.
I want to come back to something the Taoiseach said. I see that the resolution involves the deletion of part of subsection (1) by the deletion of "aircraft means an aircraft suitable for the carriage of more than 15 passengers". I understand the reason those words are being deleted from that subsection is because of some distortion on some journeys. Would the Taoiseach like to elaborate on where that occurred?
It arose from the introduction of eight seater and 15 seater aircraft by one of the air companies on scheduled flights to the Isle of Man creating an anomaly whereby passengers travelling on one of the larger 30 seater aircraft operated by the company were liable for the duty while those travelling on the smaller aircraft were not.
Would the Taoiseach agree that the further imposition of this increase to £5 per ticket will cause considerable unemployment in the travel business where it will end up as being more attractive to cross the Border and purchase tickets there for the purpose of on-flying journeys?
Look at the advantage it would give to Knock.
I would not think so at all.
(Interruptions).
Look at the advantage this would give to Knock.
I suggest we do not localise the discussion.
On a point of order, I am sure the Taoiseach would agree that he is as capable as possible from the Government side to answer the queries that are being put to him without interruptions from some of his Ministers.
I would not make any declaration of incapacity nor can I fail to be entertained occasionally by some of the interruptions from both sides of the House, disorderly though they may be. The imposition of additional duty of either £2 or £3, depending on the form of travel, is very unlikely to divert anybody via Northern Ireland because of that sum of money. I would not say that the effect on employment would be negligible; I would say it would be nil.
My concern is because of the considerable capital requirements of Aer Lingus, the national airline, that it would be a pity if any action taken by the Government now would put further serious financial pressures on the company. With regard to Resolution No. 1, would the Taoiseach be able to indicate the total number employed in that highly technological field of the production of televisions and video players in this country?
I have no information on that particular point.
Is that statistic available?
I am sure it is, but not to me at this moment.
I find it difficult to understand if the Government were making such an impact on this particular type of production that they would have been conscious of the number in employment in that production field at this time.
While there is some manufacture of those sets here the bulk of them are manufactured elsewhere. Any impact on employment would be in the distribution end rather than to any significant degree in the manufacturing sector.
Is the Taoiseach aware that there is manufacturing or assembly of those particular devices here at this time?
Yes. The percentage is very small. In 1982 only 4 per cent of excise duty receipts in relation to television sets related to home produced sets, which is a very small number indeed. If there were any employment effects they would be in the distribution rather than the production sector obviously. There are no figures readily available on the employment in the distribution of television sets.
Would the Taoiseach agree that those particular increases are putting in jeopardy the employment of a very skilful group of people and that the possibility is that there will be massive redundancies because of those levies introduced today?
I would consider that very improbable since the total number of sets involved would seem to be no more than 5,000.
Has the Taoiseach any figure in respect of the now average production cost of a monochrome television attracting the £121 excise duty and also of what percentage of the total production cost would the £121 represent? The answer might be very educational from the point of view of the public.
That would be for the largest colour television available. I have not had occasion to purchase anything of that kind so I am not in a position to say offhand what the percentage would be.
How about the set the Taoiseach has?
It is rented.
Would the Taoiseach not have an idea of what was the production cost of that set?
I regret to say that I do not have that information. I merely pay the rent. However, this may be going beyond the normal scope of the debate.
It would be interesting to know what percentage of the production cost of a television set is represented by the £121.
It has just been confirmed to me that the set we are talking of would be in the region of £600 to £700.
That would be the retail price but I am talking about the production line cost.
I do not have that information. We would have to estimate the figure before being able to give the Deputy a reply but there are considerable mark ups.
Would the Taoiseach be inclined to agree that the amount represented by excise will be more than the cost of production?
I would not agree because I would find it hard to believe that despite wholesale-retail mark-ups being large, they would range from less than £121 to £600. The Deputy is exaggerating.
Rather than delay the House on these six resolutions to which so far we have had sufficient replies, perhaps we could move on to the more important VAT and income levies. Regarding gaming licences and gaming machines, I understand that the gaming licence is for institutions or for premises in which there are gaming machines but are there included in this also premises that might not have gaming machines but which would have video game machines? Is a licence required for video game machines as against slot machines?
There are no gaming licences required in respect of videos. The licences relate to the Gaming and Lotteries Act, 1956, under which are issued District Court certificates. The Act provides that gaming is permissible only in amusement halls and funfairs. The number of such licences issued in 1982 was just under 400 and that number would bring in about £70,000.
The answer, then, is that places in which video games operate are not licensed, do not have to be licensed and that there is no licence fee on the machine. The licence is in respect of slot machines and gaming houses where such machines are used.
Videos are not games. There is an excise duty on videos.
I am not talking about television videos but about video games machines.
The Deputy means the space-invader type game. These are not subject to licence. The licence applies to gaming machines on which you can win or, more probably, lose money as has been my experience.
Regarding Resolution No. 1, has the Taoiseach reached a decision yet on the granting of a television licence increase?
That hardly arises on these resolutions.
I thought the Taoiseach might take this opportunity of giving the information to the House.
Are Resolutions Nos. 1 to 6 agreed?
While we agreed to discuss them together, we wish to have them taken separately.
Resolution No. 1 put and agreed to.