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Dáil Éireann debate -
Tuesday, 14 May 1985

Vol. 358 No. 5

Finance Bill, 1985: Committee Stage (Resumed).

Debate resumed on amendment No. 33:
In page 14, before section 13, to insert a new section as follows:
13.—Chapter III of Part I of the Finance Act, 1984, is hereby amended—
(a) in section 11 (1), in the definition of ‘associate', by the insertion after ‘participator' of ‘except that the reference in paragraph (a) of that section to a relative of a participator shall be excluded from such meaning',
(b) in section 12 (4), by the substitution of the following paragraph for paragraph (b):
‘(b) if the company is not carrying on that trade at the time when the shares are issued, unless the company—
(i) expends not less than 80 per cent of the money subscribed for the shares on research and development work which is connected with and undertaken with a view to the carrying on of the trade, and begins to carry on the trade within three years after that time, or
(ii) otherwise begins to carry on the trade within two years after that time.',
(c) in section 15, by the insertion in paragraph (b) of subsection (7) of `and section 26 (2),' after `subsection',
(d) in section 26—
(i) by the deletion in paragraph (b) of subsection (1)—
(I) of ‘was incorporated in the State and', and
(II) in subparagraph (ii), of ‘wholly or mainly in the State', and
(ii) by the substitution, in subsection (2), of the following paragraph for paragraph (a):
‘(a) that the subsidiary is a 51 per cent subsidiary of the qualifying company;', and
(e) in section 27 (8), by the substitution of the following paragraph for paragraphs (d) and (e):
‘(d) that any amounts received by way of dividends or interest are, subject to a commission in respect of management expenses at a rate not exceeding a rate which shall be specified in the deed of trust under which the fund has been established, to be paid without undue delay to the participants,
(e) that any charges to be made by way of management or other expenses in connection with the establishment, the running, the winding down or the terminating of the fund shall be at a rate not exceeding a rate which shall be specified in the deed of trust under which the fund is established,', and the said definition of 'associate', the said paragraph (b) of subsection (7) of section 15, and the said paragraph (b) of subsection (1) of section 26, as so amended, are set out in the Table to this section.
TABLE
‘associate' has the same meaning in relation to a person as it has by virtue of section 103 (3) of the Corporation Tax Act, 1976, in relation to a participator, except that the reference in paragraph (a) of that section to a relative of a participator shall be excluded from such meaning;
(b) In this subsection and section 26 (2), ‘51 per cent subsidiary', in relation to any company, has the meaning assigned to it, for the purposes of the Corporation Tax Acts, by section 156 of the Corporation Tax Act, 1976.
(b) the subsidiary or each subsidiary is a company—
(i) falling within section 15 (2) (a), or
(ii) which exists solely for the purpose of carrying on any trade which consists solely of any one or more of the following trading operations—
(I) the purchase of goods or materials for use by the qualifying company or its subsidiaries,
(II) the sale of goods or materials produced by the qualifying company or its subsidiaries, or
(III) the rendering of services to or on behalf of the qualifying company or its subsidiaries.".
—(Minister for Finance)

When I reported progress last Thursday I was commenting on some questions raised by members of the Opposition in relation to the amendments proposed in the Bill regarding the scheme. I think subject to correction, that I mentioned that the Bill dealing with unit trusts had been circulated and that we hoped to have it on the Order Paper next week. As I said, that will allow the funds to carry out advertising and I expect that will give added impetus to activity under the scheme.

In relation to the designated funds themselves, in reply to some questions from the other side of the House I wish to point out there is no lower limit on amounts that may be invested in designated investment funds but the funds themselves, for their own internal administrative reasons, may put a lower limit on amounts going in. However, that is a matter for the funds themselves. They are not constrained to act in that way by anything in the legislation.

Deputy O'Kennedy raised a question in relation to the period of retention of investments. He thought it was too long and he considered investors should be able to cash in their investments in qualifying companies after two years. He suggested that we should encourage investors to buy and sell shares in those companies. On both points I would have fairly serious reservations. The scheme is intended to get the necessary seed finance into qualifying companies. We do not want to have a situation where the funds could flow out of a company again fairly readily. In essence we want the equity to be locked into the company for as long as it takes the company to get into a position in which it can successfully begin trading and make progress in its chosen niche in the market. It was with that in mind that the provisions of the 1984 Finance Act were framed.

If there is a situation in which a company can itself raise money on the stock market or on the unlisted securities market, by definition, that is not the kind of company we have in mind in this scheme here. As I said both last year and this year, the scheme was targeted at the provision of finance for companies which would not otherwise be able to raise the kind of capital they require. Companies that can get a quotation on the unlisted securities market and, of course, even more, companies that are quoted in the normal way on the stock exchange have another avenue by which they can raise funds, have other means of gaining access to equity and, therefore, would not need the benefit of this scheme. Whatever is the situation with which we are dealing, whatever the position of companies applying for this, we must recognise that the supply of venture capital is not unlimited. To the extent that a scheme such as this would be broadened, the inevitable effect of doing so beyond the kinds of limits we sought in the 1984 Finance Act would direct funds away from the companies that need this kind of equity most towards those which have other means of raising funds. Therefore a broadening of the scheme would go directly counter to its objective which I think I can fairly say is shared by all sides of the House.

I think it was Deputy O'Kennedy who spoke of the alleged difficulty that advisers to companies and to potential investors have in working their way through what he chooses to call the gobbledygook of the provisions of the 1984 Act. That is a grand word to use if one wants to have a go at a scheme like this. Deputy O'Kennedy is probably fairly familiar with the provisions of the 1984 Finance Act. If one examines them very closely——

Very closely.

——one will very quickly find that in any particular case one would not have to go through all of the provisions because not all of them would apply in any given case. Therefore, it is a little disingenuous to pretend that in each and every case the investor or his advisers would have to go in detail, line by line, through the provisions of that Act.

I think I have a great deal more appreciation and respect for the ability of investment advisers and accountants than Deputy O'Kennedy appears to have. It seems to me that, once one has been through it once, then there is no great difficulty in going through it again, applying the provisions or assessing their impact on any specific investment proposal.

I do not think that the length of the provisions of the 1984 Act in itself presents an obstacle. There is ample evidence of the fact that accountants and investment advisers of one kind or another can fairly quickly familiarise themselves with far more complex legislation, indeed seem fairly quickly to familiarise themselves with the whole corpus of the given year's Finance Act, finding their way through it very readily.

They are making money out of it now. They are the only people who can.

They are, of course, making money out of it. They are in business to provide a service and if they can get people to pay for it, the best of luck to them. I am not impressed by arguments that contend that it takes a lot of time, money and so on to find one's way through these provisions. That is not the case.

We have quite an amount of work facing us on this Finance Bill over the next few days. If I cannot succeed in persuading the Minister on any one issue then I do not intend to repeat the arguments made. If the Minister's mind is made up then we had better proceed to other issues.

Before leaving this one, let me note the difference between the position of the Minister and Government and ourselves. Arising from what the Minister has said — and I want to make this very clear — there is a very sharp difference between the Government approach to venture capital and the Fianna Fáil approach. What the Minister said in the House today demonstrates that fairly clearly. Among other things the Minister has said that the purpose of this scheme is to ensure that equity capital will be locked into the company.

That is what I said.

——in response to the case I made to reduce the retention period so as to encourage investors to participate in this new scheme. If the Minister genuinely believes that one will encourage investors by locking their equity capital into companies for a fixed period, as he demonstrates in this Bill, then he is ignoring the reality of those interested in equity participation. They are not interested in having their money locked into any scheme without being able to release it except on terms determined by the Revenue Commissioners, the Minister or his officials. They are interested in seeking a tax break — that is what it is — for investment in industry or services that badly need it. It is time we generated that climate here, as it has been generated elsewhere. Clearly what we need is a new climate for investment and participation in equity particularly through a venture capital scheme. The Minister, in introducing it, has not the courage or the imagination really to promote venture capital in the way that its real potential would be realised. If it is locked in, that is a guarantee that nobody has ever opened the door in the first instance in order that it may be locked in, in the final analysis.

The Minister demonstrated also, in the course of the Second Stage debate — here again there is a dramatic and sharp difference between the Government and Fianna Fáil on this issue — that he is not concerned with those who are not in the risk area. He made that clear in his Second Stage speech. According to the Minister this is not to be used by groups who can find other sources of funding. Is the Minister not aware that the biggest problem confronting native industry at present is in raising equity capital participation through investment? As has been demonstrated in the last two years in particular, unfortunately the vast bulk of them have had to have recourse to borrowings through the banks. The cost of funding such borrowings has brought a very considerable number of them to their knees. The Minister does not have to look any further than the agencies of Government — Fóir Teoranta, the Industrial Credit Company, the IDA, even the most informal and casual consultations with the banks, never mind the Dun and Bradstreet growing list of liquidations, to discover that the major problem confronting the domestic sector is accumulating and providing the necessary capital.

Last year when this was announced I thought that this was a way out. I thought that for once we would be wholeheartedly agreeing with the Government in this measure because the promotion of venture capital is necessary, as I have demonstrated and is being done elsewhere. It is occurring in the United States, Switzerland and the Federal Republic of Germany, where even trade unionists are venture capitalists. They have a real stake in the success of the economy. I thought we were going to merge into that reality but instead the heavy hand of bureaucracy has been laid on it and the Minister, in the cold detached way of his which does not seem to be related to the reality and need outside, is again imposing many conditions. It is fine to say that if one reads through the 26 pages issued last year it will all become simple at the end of the day. Has one the time to read it closely?

If one was to get paid for it one would read it.

Potential investors are not interested in reading things closely.

Is the Deputy suggesting that people invest without knowing the details?

I think I hear from Deputy Owen again. I did not know the Deputy was interested in the scheme but if she is I would be interested in hearing what she has to say.

I hope that is not a condescending remark. I am back again.

It is not. If the Deputy will let me know what she said I will understand her first comment. I did not hear it.

The Deputy expressed surprise that I might be interested in the scheme and I said I hoped it was not a condescending remark.

I am referring to the comment the Deputy made that gave rise to that surprise on my part.

I said that I was back again.

Why is it noteworthy that the Deputy is back? I did not make any comment about that.

The Deputy welcomed Deputy Owen back.

The first comment came from Deputy Owen and I do not know what it was. If it was worth saying it is worthwhile hearing.

The Deputy was suggesting that people would invest in a scheme without knowing the details of it.

No, I did not say that.

The Deputy said they did not want to read the small print.

If the Deputy wishes to misrepresent me in that way she is free to do so. What I said was that a potential investor was not interested in having to read through 26 pages of a Finance Act that has so many qualifications, limitations and restrictions, before knowing whether he should place his £500 or £1,000. An investor wants to know if the scheme encourages investment in venture capital. He would be able to make a measured judgment on the fund being promoted. He would use his business judgment to see if there would be a profit for him in the venture and a means of making a major contribution to the much needed equity in Irish native industry. If those signals are clearly there such an investor will get going but if they are not — they were not last year and are not now — he will not invest. I made that point to illustrate the sharp difference between the Government and Fianna Fáil on this issue.

Anybody who knows, whether it is international or domestic capital, the basis on which investment capital is channelled will be aware that the one thing one does not do is to tell people that if they invest they will be locked in. A way out must be provided. It is my belief that Deputies Bruton and Yates, and others, share that view. I should like to comment on what I see as unnecessary limitations. The limitation to the manufacturing sector and to what one might call Shannon-type services, and the computer service area generally, raises a sharp distinction between the approach of the Government and Fianna Fáil. The construction industry have publicly pleaded to be included in this programme. We have supported that plea. In fact, I was in advance of them last year when, on behalf of my party, I made that plea in the course of the debate. The construction industry meets the criteria set by the Minister in terms of a risk venture because, obviously, it is in a depressed state and represents a great risk for those involved. In that case it should be used as an incentive to invest.

Is the Minister aware that most major construction companies are not investing here? Smaller companies do not have the funds to invest because of VAT and other restrictions imposed by the Government. The consequence is that they are short of capital. If one checks with bank managers one will realise that construction companies are in a state of total depression. They cannot meet charges on their borrowings. If we want to lift them out of this we should look at that area.

The tourism sector, hopefully and belatedly, will get a boost this year. If it does not we will be the only economy in western Europe that will not get a boost. It is worth investing in that industry.

Has the Deputy not heard what is going on?

I am afraid I have. I have observed too.

Did the Deputy say he was afraid?

The extraordinary thing that has happened in the tourism industry is that at a time when all the advantages should be in our favour because of the depreciation of our currency against the dollar, for which we are paying dearly in other directions through the Minister's ill-advised borrowing programme, we have not been compensated by a huge growth of tourists from the US. I accept that this year there are encouraging signs of an increase over last year's figure. There would need to be. I must put on record that even the ethnic Irish-American community have not been coming here but have been overflying to France, Italy and other European countries. I met them last year in Europe. Last year, and the previous year, we erected the barriers. Deputy Owen may choose to smile at that news.

I was wondering why the Deputy did not spend his holidays in Ireland.

I did holiday in Ireland.

I wonder how the Deputy met Americans in Europe.

On two occasions I paid two official visits to Europe. On the first occasion I went to address the University Institute in Florence and on the second occasion I travelled to Brussels. Even in Brussels, which is not noted as a tourist trap, Irish-Americans were there in greater numbers than in Ireland. The remainder of my holidays were spent in Connemara, as usual.

The potential is great this year but if we want to give a real boost to tourism, to provide the facilities that are necessary to reach our full potential, from the Hook in Wexford to the North-west of Donegal, we can do it. As Seán Lemass saw some years ago, it is time for a new signal and new optimism. There are very few things we can turn to now except our own resources and tourism is one of them. However, the Minister refuses to include tourism in this area. I do not see why he does that. He has said that it would be all too broad and if we broaden it it would go towards a conclusion directly counter to the intention. I would have thought that the Minister in introducing the scheme last year had hoped to make a whopping great success of it and the broader it became the happier he would be. He does not seem to have made up his mind on that. The result is that, like last year, we will be surrounded by limitations, qualifications, restrictions, ifs, buts and whatever. At the end of the year the result will not be much better than it was last year. The Minister will not be able to say that the scheme will qualify only for tax breaks from early January.

It appears that I am speaking for the record because I do not think I will persuade the Minister to change his mind. I wish I could. If I managed to persuade him to change it would be as much in his interest and in the interest of the economy. If the Minister has decided that that is it there is little point in going further about the matter.

Deputy O'Kennedy does not seem to be getting the message that there is a fairly specific aim to this scheme, with which he agrees. But before getting on to that I will repeat for the benefit of the House the remarks I made at the beginning of our discussion on this amendment. What has been brought about so far, bearing in mind that the tax relief came into operation only for applications made after 1 January this year, is that we have two investment funds designated. Ten companies have applied for authorisation to issue certificates to subscribers where the amount of investment is around £1½ million; 20 companies have applied for outline approval for investment and at the last count there were 32 cases where inquiries were made about various aspects of the scheme. If Deputy O'Kennedy is worried about advice being made available to people to bring them through the terms of the scheme, the Revenue Commissioners provide a full advisory service to anybody who wishes to have any provision of the scheme clarified. Quite a number of people now involved in qualifying investments have taken that advice and used that facility being made available by the Revenue Commissioners.

Deputy O'Kennedy does not like the idea of investors being locked in for a period. This is where the difference emerges and it is a difference of emphasis rather than anything else. I am concerned principally with developing the productive capacity of the companies and with developing their capacity to employ people. Deputy O'Kennedy puts the accent more on the investor. A very revealing remark that he made was that investors want a tax break for investment.

Do not misrepresent me. It is too serious for that.

Before Deputy O'Kennedy gets excited, I appreciate that point but the emphasis in drawing up the scheme had to be on getting the funds into companies where it will improve the productive capacity of the companies and increase employment. In any scheme like this a balance must be struck between the interests of the investor and the interests of the company in which investment is taking place. The balance we struck in the scheme in last year's Finance Act was in favour of the company where the investment was taking place. That is appropriate, and it does not take away from the fact that I agree with Deputy O'Kennedy's contention that we must have regard for the situation of the investor. We have produced a very attractive scheme for the investor. If an investor in the 60 per cent tax band subscribes £10,000 in a company, the tax relief is £6,000 so the investor is getting a £10,000 investment for £4,000. That is a perfectly adequate response to the concern of the investor. Deputy O'Kennedy does not like the idea of capital being locked in and he referred to firms who have difficulty in raising equity and are obliged to borrow funds for their development. I can understand Deputy O'Kennedy's concern but for a company, there is not all that much difference between borrowed funds and venture capital that comes in for a short period of a couple of years and is then withdrawn. The company is no further ahead. The scheme had to strike a balance between the interests of the investor and the interests of the company. One could conclude that if anything, we struck the balance in favour of the company while bearing in mind that the tax relief for the investor is a worthwhile relief.

It is not true as Deputy O'Kennedy has alleged that I am not concerned about the position of companies that are not in the risk area or who do not come within the terms of the scheme. They have other means of raising capital that are not available to the kinds of companies we have in mind whether they are new companies or expansions of other companies. They have other avenues of access to funds. If they were brought under the scope of the scheme they are more likely to suck off a large proportion of the funds available than the new companies or the expansions of companies that we have provided for in this Bill. At the end of the day the argument boils down to the really important objective of the scheme which is to get new activity going. The most effective way to ensure that available capital, stimulated by the tax break provided for, goes into the area we want most developed is through this scheme implemented in last year's Act with the modifications provided for in the amendment we are now discussing.

Lest what the Minister put forward as being my opinion is taken to be my opinion, I would make it clear that it is not and that I am well capable of expressing my opinion. The Minister put it too neatly when he said that I was concerned only for the investor and that he is concerned for employment. That is not true. It is because this scheme is concerned with the investment provisions and regulations that I addressed myself to the investment aspect. I hope I demonstrated to the Minister that the only real interest, at the end of the day, is the generation of employment. To create employment we must generate investment. The level of investment over the last ten years but particularly over the last three or four years has been dropping drastically. The only way to guarantee even the maintenance of employment, not to speak about generating new employment is to create a new atmosphere of investment. That has been accepted by economists and businessmen over the last two years. What we lack is an investment climate, without which the jobs will not follow. I assure the Minister that I am at least as concerned if not more concerned about employment than the Minister. Our respective records will show whose opinion was more correct having regard to the employment trends for 1984 and 1985.

The Minister seems to work on the basis that venture capital, if it was to be freely negotiable and exchanged, would leave the potential promoter in the same position as if he had borowed from the bank. It is usually the case, the Minister said, that when venture capital is withdrawn it leaves the promoter perhaps in a worse position than if he had borrowed his funds from the bank. I am not talking about a situation where it is withdrawn completely. I want to see it being a matter of marketable, negotiable, commercial activity where people will buy and sell the shares that follow here. It is unreal on the Minister's part to say that if it is not locked in it will be pulled out completely. Create a market for venture capital so that those who may not have gone in on the first day can get into that market on the next day. If the Minister does not accept my view I must abide by that, but I adhere to it strongly.

I do not want to misrepresent the Minister. We tend to pick on words and then to represent the words used for our own purposes, but when the Minister says that the other companies have other means of raising capital from the kind of scheme he has in mind here I begin to question what kind of companies the Minister is thinking of. Is he thinking of only those who can get finance from no other source at all?

Is he thinking of those whose risk activities are of such dimension that a normal prudent investor would not want to know about them? Must they be that way before they will be considered for this scheme? I am glad it is not so because the Minister has tended to convey the impression that these sections are concerned only with companies who are really at risk, really short of capital and can get it from nowhere else. Normal bona fide trading companies who could do with an extra injection of venture capital in which people would like to participate do not seem to be included at least in the Minister's mind even if they are included in the scheme. If they are included, why the restrictions? Before you can qualify for this scheme must you prove that you are on your last legs, that you can get it from no other souce except at a high rate from the bank? If that is not his intention, then I still do not see why the restrictions and qualifications are there.

We have a major problem of venture capital in this country or, as it is commonly called, vulture capital. The Belfield report, as it came to be called, was leaked in relation to the problems of many small companies. Their biggest problem was that they were under-capitalised and overdependent on loan capital for raising finances. Therefore these interest charges strangled them. The State's response to that has been firstly through the establishment of the NEA who have a role in venture capital but over the years that role has seemed very limited. It seems to be totally zoning in on high technology projects and does not meet the venture capital needs. When the Minister introduced this expansion of business development scheme last year it was welcomed but I think there was general misapprehension because many people in industry said that the scheme was not working or was not getting off the ground during 1984 when the operative date was 1 January this year.

I welcome the Minister's amendments here because they deal with some of the major complaints that have issued. The previous clause relating to families provided for limitations on the qualifying companies who could reap the benefits of these types of investments and relatives of the investor would not avail of it. I understand that brothers and sisters will now be eligible for it and I welcome this provision. Recently a gentleman contacted me. His brother had a company which qualifies for export sales relief and that man will benefit by this. However, I hope the Minister will clarify the operational date of this. Was it the beginning of this tax year or 1 January this year? Parents of sons and daughters do not benefit from this. Consider the liability that can arise in relation to capital acquisitions tax when transfers without any appreciation of wealth take place within a family. In the normal course of handing on a family business from father to son surely it would be reasonable when, as is the case, the younger generation have ideas for expanding the business that they could avail of this also, given the £25,000 per annum limit.

Another objective of these amendments is to deal with the administrative expenses that the managers of these designated funds have. Apparently there has been some caution about some of these trustee designated funds that the expenses would not be sufficient to allow them to be really interested in this and thus ensure that we would get the best type of expertise. The amendments do not state what the percentage of the expenses would be. I see that a deed of trust would be arranged between the investor and the designated fund manager. Is this envisaged to be 3 per cent, 8 per cent, or what sort of figure are we talking about? Deputy O'Kennedy and the Minister seemed to be at issue over the question of these funds being locked in. Deputy O'Kennedy in his last intervention seemed to be having an each way bet on this. He said that he did not want the investor not to have the flexibility to pull the funds out but at the same time he was not suggesting that the company who were having these funds invested in the company would lose out.

I did not say that I did not want the investor not to have the flexibility of pulling the funds out. I do not mind answering for the case I make but not the case the Deputy represents me as making.

I thought the point that Deputy O'Kennedy was making was that three years is too long. Is that correct?

If one could interpret that three years is too long the Deputy is saying that that does not give enough flexibility to the investor.

Or to someone who would wish to purchase from the investor.

More important is the company. After all, the investors are doing this because they are getting a mighty tax break on it, up to 60p in the £ perhaps. The purpose of this whole scheme is not to give attractive investment opportunities to compete with gilts or whatever. The point of it is to get equity into companies who otherwise cannot get it in. Knowing something about a number of small companies, I suggest that three years is the minimum period for which they would want these funds. If they have a programme of financing either in the start up or the expansion phase and if there is a withdrawal of equity, then the rug is pulled from under them. I am not saying that Deputy O'Kennedy suggests that that would happen, but it would create great nervousness among these small companies who would be reaping the benefit of these types of investments. Three years is a very short time in financial planning for a small business, given that equity is cheaper than loan financing in many respects and that these share-holdings will have no preferential status. It is pure risk equity. I suggest that three years be a minimum because if equity was pulled out in less than three years there would be no point in going to the bank and you could only call for the receiver or the liquidator.

I agree with Deputy O'Kennedy on one point regarding tourism. Recently the Joint Committee on Small Businesses carried out a detailed examination of the tourism sector. No case overall can be made for tourism for this scheme but a case can be made for hotels. I ask the Minister that in future years when these designated funds are up and running he will look again at this. We have section 84 loans, ICC loans, AIB moneys and so on and it seems that the hotel sector has lost out. Something like 60 hotels have closed over the last several years and there have been rationalisation programmes in others. It is estimated in the annual Stokes, Kennedy, Crowley report on the hotel sector that the rate of return on capital invested in hotels is down to 1.4 per cent. This is a vicious circle because if the profits are not there, there is not the capacity to reinvest, then standards drop and bed occupancy drops and order books decline. We must remember that hotels mostly attract the tourists with a lot of money to spend and have a greater proportion of overseas revenue through tourism. If one of the qualifying conditions for manufacturing industry is an export related factor, one could equally argue a long term case for hotels. I would like to see the Minister, in years to come, travelling that road.

I promise the Deputy I will.

He will not be able to wait that long.

I do not think I will have to depend on Deputy O'Kennedy. I am glad the Minister has recognised the special needs of research and development. We are behind in this area. We are greatly dependent on multinationals for research and development. As a percentage of gross national product we spend something like 1.2 per cent on research and development. This is an appallingly low figure because many of our European competitors spend at least five times that amount. I hope we will eventually move in the direction of the Small Business Institute of Research in the United States where they have very complex and sophisticated techniques for assisting universities and research institutions with technological problems in the work place. I am glad this is being considered, especially in the start-up period, allowing the necessary two year time span for the company to get started.

Has the Minister given any consideration to the stock exchange and their damning failure to develop small business stocks? It might be possible to use a scheme like this to bring this about.

To date, all small companies are totally dependent on the banking sector for capital and steps like this are moving towards the venture capital area for equity. However, there is a specific need for small businesses to be able to raise money on the stock exchange through the punter or the financial institutions, pension funds and so on. In the Government's discussions with the stock exchange, would they seek to introduce equities or small business stock for a particular segment of the market and in order to encourage investors, would they consider some form of tax relief in that area?

I commend the Minister for removing some of the red tape restrictions on this scheme——

Which the Minister introduced last year despite our appeals.

The United Kingdom had a very unhappy experience with this scheme. I am glad our Minister is persevering to make sure this scheme works, unlike Mr. Lawson who decided to ditch it. The Minister is on the right track. He has made provisions which meet specific problems raised and I hope each year we will see a progression and widening of this scheme to meet investors' and small business needs.

I join Deputy Yates in welcoming the relaxation of this scheme. It is great to see a Minister come back into this House to relax the provisions of a scheme which he introduced earlier and finds that people have not been using a scheme which was designed in good faith, for nefarious purposes. We might not like the fact that it was a bit restrictive last year, but the Minister is relaxing it this year and it has not been exploited in such a way which will damage the economy.

What the Deputy is saying is that it can only grow from last year——

I am glad to see the brother and sister provision, but why is it necessary to retain the restriction that a person cannot become connected with a company within a five year period? A logical way of approaching venture capital is to have people who would be bringing managerial expertise, experience, contacts and so on to the company and not just money. I do not fully understand why it is necessary to prevent someone becoming closely connected with the company as time goes on. The 1984 Bill restricts that area. Perhaps the Minister would look at that because that is an area which could be relaxed without causing damage to the scheme.

The relaxation in respect of research and development is welcome. The Minister has extended the start-up date from two to three years if 80 per cent of the money is going to research and development. As Deputy Yates said, this is a big weakness in some of our companies because it takes time for a company to evolve an idea to start-up date and there are funding needs at an early stage. I would almost question whether there is any need for a year's restriction to be put on it because people are hardly likely to invest funds in research and development unless they hope to see a company at the end of it. I cannot see that allowing them even four years, as in this case, would do any great damage. If the plan flops they will lose their money. Therefore I do not think the extension would be damaging.

There is a need to look at the possibility of a scheme such as this applying to services other than those which have the 10 per cent designated manufacturing rate. There are a number of smaller scale services which are, perhaps, equally valuable to the economy and certainly valuable in the sense of providing employment. The old argument as to why manufacturing was singled out was that it was the productive base and that once you expanded the productive base other things could build on top of it, and that gave it its primacy. But there are many services other than the international traded services that could be regarded in a similar light. It would be logical for the Minister to look at scheduling in-services year by year that could also qualify. The tourist industry is obviously one that directly earns foreign exchange but there are other services which might equally have that attraction.

I understand the present legislation bars the possibility of converting a loan into equity where a relative has put up loan capital at low interest to his son, brother or sister to get a business going. I realise this would probably bring in an element of retrospection and that people would be qualifying for this relief even though they invested prior to the date, but he could look at the fact that some relatives might have put money in quite recently and set a date beyond which they would not permit this. The investors who might be setting up a relatively small scheme seem to go for loan capital first and I wonder if it would be possible to allow such a conversion or would the possible abuses offset the value of such a concession?

As far as the extension of the class of person is concerned, as raised by Deputy Yates, the provisions of this amendment extend the availability of this facility to husbands, wives, ancestors, lineal descendants and brothers and sisters of those who are running the company, so it covers the family members.

With regard to management expenses, we have removed any restriction on charges that may be made by a designated fund. The 1984 Act placed limitations on charges made on the way into the fund and on the way out but did not make any specification as to the level of day to day management charges. The effect of the amendment we are now discussing is to remove those two stipulations in regard to the level of charges, which means that there is now no legal requirement or specification as to the level of charges. However, where a fund is making a charge— and funds will always make charges — we require that that should be specified in the agreement entered into with the investor so that the investor knows when he puts his money into a designated fund just what he is getting into in terms of the charges made on his money on the way in, on the administration and on any interest or dividend that may be due to him from the fund. There is no specification, however, of the level of charges once this amendment is made.

In relation to companies which benefit from this scheme then going to the market, I must point out, as I did last year, that, given the kind of company we have in mind, it seems that one of the first moves a company of that type would make if it were going for a quotation would be to participate in the unlisted securities market. There is already a provision in the rules governing that market that a company should be trading for three years before they can participate. As I said when bringing in this scheme last year, that seems to fit in reasonably well. To put it the other way round, the scheme fits in reasonably well with that particular requirement.

I am not convinced that the situation in relation to hotels is quite as Deputy Yates outlined. Specifically, hotels and the tourist business generally are not completely cut out of any of the schemes he mentioned. There is a capital scheme for tourism development with which I am sure the Deputy is familiar. However, we are not discussing that matter.

Deputy Bruton raised the question of the possible conversion of loan capital to equity and the fact that many small businesses go in the first instance for loan capital rather than equity. The latter, of course, is the case and has been the case up to now because there did not seem to be a proper vehicle available for the attraction of equity into smaller companies. This scheme is a means whereby I hope we will be able to ensure that there is a flow of equity capital into smaller companies. If this scheme is used to the extent available we should see a movement of smaller companies away from loan capital and into equity capital of this nature.

However, this problem has been identified fairly clearly in recent years. It is not simply a matter of making an equity vehicle available to small companies. There is also the problem of preparedness among the owners of small companies to accept equity capital from outside. That should be less of a problem now with this scheme since we have allowed relatives into it. Nevertheless, there is some evidence that the owners of small Irish companies appear to be over reluctant to have their ownership of the company diluted by having equity participation from outside. I think there would be agreement on all sides of the House that, to the extent that we can do it, we should encourage people to move away from that line of thinking, understandable though it is.

On the specific question of the conversion of loan capital to equity, I wish Deputy Bruton to understand that I would not like to be drawn too far into an analysis of what the mechanisms might be. I am sure he can see a way in which the result he desired could be brought about and I do not want to go into it in detail here. For the moment, the less said about it the better. We have made the adjustments to the scheme which were necessary and I will not go any further than that.

On the question of allowing investors to sell the shares that they take up in a company in a shorter period than is provided for in the Bill, we would then have to provide, following Deputy O'Kennedy's suggestion, that the relief available on the investment would in some way be transferred to the second buyer. That would require, logically, the withdrawal of the relief from the first buyer and a qualification of the second buyer for further relief. The provisions needed to give effect to that would probably be even more counter-productive and more worthy of the description of gobbledygook than anything contained in the 1984 Act. I do not see that it would be particularly productive for companies. If people want to become investors it is far better for the companies involved to be first time investors in an expansion of a company or in a new company of the kind for which we have provided rather than using up their investing capabilities by simply stepping into the shoes of people who have already invested. Basically, we are talking about the expansion of the pool of investment.

Deputy Yates raised the question of when the access to benefit begins for family members. The amendment simply provides that the relevant sections of the 1984 Act should be amended by the additions in the amendment before us. This would mean that anybody who is now thinking of investing would become eligible to apply for the relief. Strictly speaking it applies from 6 April. Since there is now an extension of the period, anybody getting involved from here on in those categories would qualify for the relief straight away on qualifying investments. That should take care of Deputy Yates' concern which I understand would allow an expansion of the investment pool.

I thank the Minister for his answers to the various points raised. I am glad to hear about the family situations. He asked me to reflect further on the capital schemes which are available for hotels. As far as I can remember, the AIB Finance for the hotel sector in 1983 was something around £5 million. Through Bord Fáilte there has been a substantial erosion of the capital grants schemes. Now only shower units or bathrooms are catered for. Since the time when there was a decorating and development scheme, the position has got substantially worse as regards State funding.

I can see that there would be difficulties in widening the scope of the scheme. One point has to be borne in mind. Surely there should be some form of priority for capital intensive sectors which by their nature have a capital problem and require venture capital. There are precedents in other countries for doing this for hotels which have in excess of 50 per cent overseas revenue. There are various different mechanisms for narrowing it down to an export emphasis. The Minister also mentioned the mis-match between the investor and the small business fund. I strongly endorse that. If a company has a really good idea the banks or the designated funds want 51 per cent, but the company does not want to give them anything. If it is a middling to bad idea, it is vice versa. The company is prepared to give away 51 per cent but the banks do not want to know. A mechanism could be established at local level so that we could have local investment in local businesses.

On the question of the administrative expenses the Minister explained fully the way the change in the operating expenses works. I understand there is no control. Is it envisaged that there would be a rule of thumb as regards what would be reasonable expenses in this regard? I know they will be established in a deed of trust but, from the investor's point of view, the attractiveness of the designated funds would very according to the administrative expenses. Obviously it will not operate on a cartel basis and there will be competition between the designated funds. I wonder should the rate of expenses they can draw be subject to some form of scrutiny. There is a balance to be drawn between the rights of the investors and the needs of the administrators of the funds in regard to the work that will have to be done to seek out suitable ventures, suitable enterprises and suitable companies and the expenses they will have to incur. I should like to see that done.

On the question of research and development and the NEA, does the Minister envisage that a time will come when, if the State has a venture capital organisation, the general public should have a right to invest? I lost the gist of what the Minister was saying. Do I take it that there is nothing in the Act to say that loans cannot be converted into equity under the present arrangement?

I should like to ask one or two questions. Like my two colleagues I also welcome the improvements the Minister is introducing in section 13. Contrary to the impression Deputy O'Kennedy would like to give, I think everyone in the House welcomed the introduction of this scheme in last year's Finance Bill. It behoves us to welcome any improvements that can be made. The wisdom of crawling before we ran is now seen. The Minister is learning from the English experience and the implementation of the scheme in the past year.

I welcome the widening of the scope to include relatives. I want the Minister's assurance that he is satisfied that this will not lead to evasion of taxation. Can he assure the House that the administration of this element will be tightly controlled? When the Government have shown their commitment to closing off as many loopholes as possible, we must ensure that, in widening the scope to include relatives, we do not introduce a new avoidance area. I am sure the Minister can re-assure me on that point and that this will not happen.

This is a necessary amendment. As a country we have not got a great sort of attractiveness for venture capital. At the start of the scheme the people most likely to invest money in a small business getting off the ground are probably relatives and people close to the person running the business. They would have more confidence in the person than somebody from outside.

I hope the improvement of the scheme will encourage our universities and third level colleges to look at how we can encourage research and development based businesses. Generally speaking, all the research and development work in Ireland is carried on in subsidiaries of large American companies. I hope that, with the availability of this venture capital scheme, we will spread out and try to have more research and development type businesses available for people to invest in. People have money which they would like to invest in Ireland for Irish production. I hope the universities and the third level colleges will inform themselves on the availability of this venture capital scheme.

With regard to the fact that there is now no limit on what can be charged by fund managers, I should like to hear what the Minister has to say about the range of charges he thinks might be made. An open-ended opportunity for fund managers could be a stumbling block. People might be discouraged. I realise that the amendment refers to ones specified in the deed of trust. Obviously there will be a good deal of competition to encourage investment of venture money. It would be desirable that some expected ceiling should at least be known so that potential investors would not decide at the end to pull out. Some of the comments made by Deputy O'Kennedy——

I do not expect any comment I make to appeal to Deputy Owen.

I know Deputy O'Kennedy did not mean to be condescending to me but he made a comment about Deputy Bruton and Deputy Yates, drawing them into his circle, as it were, of people who knew about the scheme and were interested in it. He did not mention my name and I hope he did not mean anything by that. He has walked into trouble before when he has forgotten that I was present——

Welcome aboard.

——and listening to his very interesting comments. If we were to follow his logic, he is giving out about what the Minister has not done and what improvements he has not brought in. I wonder is he saying it would be better if we did not have the scheme at all unless it was absolutely ideal, and unless we did all the things he says need to be done. Perhaps some time in the next century he will have the opportunity of making these changes.

There would be no fund without Deputy Owen.

This amendment is an effort to make the scheme as workable as possible. There is no point pretending that following the introduction of a scheme all the necessary elements for the creation of a climate that encourages investment will simply fall into place. People need time to overcome the barrier of investing in this kind of venture. We need the motivated entrepreneurs who are prepared to take the risk and what we are talking of is a gamble. Therefore, we must create a climate that would encourage people to invest in the scheme. First, of course, we must find people who have money to invest. There has been a growth in the number of private companies prepared to manage venture capital programmes and time is needed for them, too, to gain the experience required.

Deputy O'Kennedy and others also referred to one area that is giving rise for concern. This is the whole area of the manner of exiting after the five year period. There is the question of exit from the scheme, regardless of whether the project works. If the Minister has not referred to this point already perhaps he will elucidate for us. The scheme will work if given a chance and if it is not knocked too often by people who should know better. If Deputy O'Kennedy were Minister at this time, he would be likely to be introducing this type of scheme and one could only hope that he would be as enlightened as is our Minister in terms of amending the scheme and in having the courage to say that faults had come to light which must be rectified.

Hear, hear.

We have the courage to rectify those areas of the schemes that need rectifying and if next year we find that other faults have come to light, we will have the courage to amend those, too. If Deputy O'Kennedy ever returns to the Department of Finance, one can only hope that he will have learned from the experience of this Bill.

I will be there.

Deputies Yates and Owen raised questions as to the level of fees to be charged. Last year I took the view that there was a case for providing for a certain minimal level of prescription and of protection of investors but the weight of the opinions that have been expressed to me since then, both in the House and elsewhere, has been to the effect that on the whole there has been a need for this. No rule of thumb will be specified for the level of charges. We will allow the market to fix a level of charges. It will be a case of caveat emptor but we would expect the buyer in this case to be enlightened enough to shop around as between different funds. I hope they will have a wider range of choice in relation to funds than is the case now.

Deputy Yates asked if we might ever have a State venture capital organisation. The implied question to follow that is whether in that case it would fit in with the scheme we are discussing. I am tempted to take the easy way out and say that the sort of scheme the Deputy has in mind is not included either in the Bill or in the amendment but suffice it to say that for the moment the question is hypothetical. The provision here is for a limited term and we shall have to consider the situation when that term has expired and assess the matter at that point.

In relation to the participation of relatives, I am concerned to ensure that the scheme would not become a means of tax avoidance. Where a relative is also an employee of the company, the provisions of the 1984 Act for countering tax avoidance schemes and abuse would apply. In particular I mention section 21 of the Act.

In a sense this whole scheme is not a scheme of tax avoidance?

The Deputy is about to engage in the same type of drivel as he engaged in last year.

He is engaging in scare-mongering.

I am surprised that Deputy O'Kennedy would trot out this sort of rubbish again. This scheme could not be described as a tax avoidance measure. It is not a tax avoidance measure any more than the mortgage interest relief, for example, is a tax avoidance measure.

There are some who say that is a tax avoidance measure.

Neither is this scheme any more a tax avoidance scheme than is the child tax allowance scheme. I am amazed that Deputy O'Kennedy would put himself in the same madcap group of people as those who would describe the measures I have mentioned as tax avoidance-measures.

I am much more reliable than that.

Most of those people support the Minister.

I am amazed that Deputy O'Kennedy would have spoken of the scheme in this way.

One can think of much better reasons for becoming a parent, for instance, than qualifying for tax relief. Both Deputies Bruton and Owen referred to the matter of the conversion of loans. There is provision in the Act whereby the capacity that people might have for converting loans into equity is limited. One of the reasons for this is that we do not wish to bring about a situation in which creditors of a company could convert their loans into equity in order to be given a tax break in the event of a company failing and in which case the Exchequer would have to bear part of the cost that the people concerned otherwise would have to bear. That would not be a legitimate use of the scheme.

Amendment agreed to.
Section 13 deleted.
SECTION 14.

Amendments Nos. 34, 35 and 37 are related and may be taken together.

I move amendment No. 34:

In page 15, line 10, to insert "(1)" before "Section 18".

Amendment agreed to.

I move amendment No. 35:

In page 15, to delete lines 22 to 32 and substitute the following:

"(ii) to the part-owner of a stallion which is ordinarily kept on land outside the State from the sale of services of mares by the stallion or of rights to such services where the part-owner carries on in the State a trade which consists of or includes bloodstock breeding, and it is shown to the satisfaction of the inspector or, on appeal, to the satisfaction of the Appeal Commissioners, that the part-ownership of the stallion was acquired and is held primarily for the purposes of the service by the stallion of mares owned or partly owned by the part-owner of the stallion in the course of that trade, or".

I welcome this amendment because it closes off a loophole but an opportunity is being missed to deal with a glaring anomaly in the area of income derived from the services of stallions. The income from thoroughbred stallions, such as racers owned by Robert Sangster and the sheiks — and the best of good luck to them, because I am not a begrudger — is free of income tax. That is part of the attraction in bringing these stallions here. I understand that the purpose of this ministerial amendment is to tighten up so that stallions abroad could not benefit. An anomaly, however, arises. I am particularly puzzled by the reference to "part owner of a stallion" which occurs on line one of subsection (2) and also further down.

Some of my constituents who have a long tradition in the horsebreeding industry and represent the backbone of that industry have draught Irish mares and breed them to thoroughbred stallions, thus producing the half-bred or threequarter-bred. These horses are used for show jumping and hunting and form a very substantial part of our horse export industry. One of my constituents who has a few mares has leased a stallion from Bord na gCapall. That lease goes back many years because it was originally taken out with the Department of Agriculture. In putting forward a case for tightening up, surely it is anomalous that someone who has leased a stallion for very many years should be treated differently from someone who owns a stallion. Bord na gCapall are the State horse board. They are trying their best, on a limited and further curtailed budget, to promote our horse industry, especially with regard to half-bred horses. They are continually up against different pressures of grant schemes and so on and premiums which must be withdrawn. Surely it would be cost-effective, instead of giving that board the extra money which they seek, to change the Finance Act so that people who have stallions leased from Bord na gCapall which are thoroughbreds of the highest quality should be treated exactly the same as Robert Sangster is treated? To look at it from an equity point of view, my constituents who are operating small time to farmers' mares and only charging perhaps a £400 or £100 stallion fee are more deserving than those charging £100,000 or for whom a nomination costs $½ million. How is it that the existing Act is interpreted in such a way that these people cannot avail of exemption from income tax on their stallion income?

Secondly, as the specific wording in this Bill is "part owner" surely that term is wide enough to cover the point of leasehold interest, as in the case of my constituent? With regard to this constituent, the Revenue Commissioners have gone back ten years and withdrawn all exemption allowances. He has other forms of income, employs an accountant and is paying income tax and on his tax assessment form for this year was written "allowance withdrawn" for the first time. Perhaps I am mistaken and this has nothing to do with the Department of Finance or with this House. Perhaps it is a new interpretation which the Revenue Commissioners have taken of a certain Act. I suspect, going on various communications which I have had with them, that their interpretation is legally binding. I do not wish to be difficult about this matter but perhaps on this Stage or Report Stage the Minister might consider those who are doing a lot for our horse industry which is export-orientated and who have not a large income and see that they be treated equitably. There is a confused idea that the half-bred or the thoroughbred is the reason for the problem, but that is not the problem. We are talking here about thoroughbred stallions which have been leased. If it cannot be done this year, I hope that in future years the Department of Finance will get together with Bord na gCapall and the Revenue Commissioners to examine this matter to see if small farmers providing a service to farmers with one mare are given the same tax exemptions as the Robert Sangsters, the Maktoun family and the many sheiks and Arabian princes.

I did not wish to interrupt the Deputy, but I think that we have got absolutely off the rails. We are dealing with section 14.

Amendment 35.

I understand it was agreed to take amendments 34, 35 and 37 together. We have dealt with amendment 34. We should not have been speaking again on amendment 35 and Deputy Yates was really speaking to the section, rather than the amendment.

There was a changeover from the Ceann Comhairle to the Leas-Cheann Comhairle. I got up when the Leas-Cheann Comhairle was dealing with amendment 34 and he asked me to wait until we came to amendment 35.

The Leas-Cheann Comhairle had already announced that amendments 34, 35 and 37 would be discussed together and decisions taken on them separately.

To help Deputy Yates, could we take his remarks as having been made in connection with the section, deal with the amendments and then come to the section?

Consideration could be given to Deputy Yates, who made a very good point.

I did not wish to interrupt Deputy Yates, but he would be more in order on the section.

Amendment agreed to.

Amendment 36 is out of order. Amendment 37, in the name of the Minister has been discussed with amendments 34 and 35.

I move amendment No. 37:

In page 15, between lines 32 and 33, to insert the following subsection:

"(2) This section shall not apply to profits or gains arising before the 6th day of April, 1985.".

Amendment agreed to.
Question proposed "That section 14, as amended, stand part of the Bill".

Before we proceed to determine that question, I think we could operate on the basis that Deputy Yates's remarks referred to the section.

They are on the record, anyway.

The case to which Deputy Yates referred concerns stallions that are leased from Bord na gCapall. The original provision governing this release is section 18 (2) of the Finance Act, 1969.

I should like to point out to Deputy Yates and to the House, in case there is any misunderstanding, that the relief does not apply solely in the case of nominations which cost £100,000. It can apply to cases where the nomination fee is very considerably less than that. However, it applies where the person who is carrying on the trade is the owner of the stallion. It does not apply, and is not available, to the breeder in circumstances in which he is not the owner. There are good reasons for so providing.

I am bound to say that if there is a feeling that we should have a different type of treatment in relation to the cases which Deputy Yates has mentioned, it is more a problem for policy in relation to Bord na gCapall than a matter of tax law. The original relief, as I say, dates back to 1969. It applies to persons who are the owners of stallions and use those to generate stud fees. If the owner is Bord na gCapall, then this relief would not apply in the case of the breeder. Nor would the reference in the amendment we have made to the section to part owners cover that because a leasholder could not be regarded as a part owner. The reference to part owner has been inserted both in relation to stallions and mares. As the House knows, there are many cases where there are a number of partners either in stallions or in mares. We have inserted the reference to part owner because the common case is that a breeder here is not the exclusive owner of a stallion but is a part owner with a number of other breeders. The same can apply to mares.

With regard to the specific case mentioned by Deputy Yates, I do not think I am betraying any secrets when I say the Deputy has mentioned this case to me before now. I am not sure exactly what is involved with regard to the inspection of records going back for ten years. Perhaps a relief was given in the mistaken belief that the person in question was the owner of stallions but if it now appears he was not then, of course, the liability would fall to be reviewed. However, that is more properly a matter that could be dealt with bilaterally rather than in this Chamber.

I had not intended to get into this discussion. Our party do not have any strong feelings on the matter one way or the other and this is reflected in the fact that we have no amendments down. However, I dislike the fact that here an excellent case was put forward by Deputy Yates but the Minister has done everything but answer the points put forward by the Deputy. I agree with the Minister that legally a lessee cannot be characterised as a part owner but for the purpose of the point made by Deputy Yates I cannot see why a lessee should be distinguished either from an owner on the one hand or a part owner on the other hand. It seems if there is some good economic or social reason for giving this relief, a case could be made for extending it as suggested by Deputy Yates. I have not heard the Minister explain why there is a distinction between owners and breeders in this context. I should like to hear the reason.

Deputy O'Dea has admitted that his interest in this matter is a late acquisition, probably provoked by the fact that Deputy Yates asked the question rather than anyone on the other side of the House.——

The Minister did not reply to the question.

If we were to extend the same treatment in this case to lessees as we do to owners or part owners, that would appear to me to create a most undesirable precedent in tax law.

How many animals are involved?

As the Minister said, I have spoken to him on this matter on many occasions and perhaps it was unreasonable of me to bring it up on the floor of the House. The Minister said that it was Bord na gCapall who were at fault. I took up this matter with them but they were totally unaware of the situation. I was quite horrified at that but I realise that is not the fault or the business of the Minister. However, it seems there is a gross lack of communication or there is misunderstanding in the Department of Finance in respect of our horse breeding policy. I realise that in County Kildare there are some very important elements of our high quality racing industry but in Wexford perhaps we are in a more disadvantaged and poorer region than the sunny climes of Kildare. I hope that the Department will iron out the problem which may not require legislative change.

I accept completely the point made by the Minister about a part owner being a part of a syndicate. I also accept the point about the allowance being withdrawn, that it could have been an administrative error, but I would point out that my constituent knows of other people who are leasing and who have not been affected in this way. These people are no longer leasing. The whole area seems to be one utter mess and perhaps the Department will take up the matter with Bord na gCapall and the Department of Agriculture and sort it out as soon as possible.

Question put and agreed to.
SECTION 15.

Amendment No. 38 is in the name of the Minister. Amendments Nos. 39 and 40 are related. Amendment Nos. 38, 39 and 40 will be taken together by agreement.

I move amendment No. 38:

In page 16, line 6, to delete "or".

Amendment agreed to.

I move amendment No. 39:

In page 16, to delete lines 7 to 16 and substitute the following:

"(c) the College of Industrial Relations, Ranelagh, Dublin, or

(d) any of the following colleges established under the provisions of the Vocational Education Act, 1930—

(i) colleges forming part of the Dublin Institute of Technology,

(ii) the Limerick College of Art, Commerce and Technology, or

(iii) regional technical colleges;".

Amendment agreed to.
Amendment No. 40 not moved.
Question proposed: "That section 15, as amended, stand part of the Bill."

I welcome the general principle involved and the extension introduced by the Minister to cater for some new educational establishments. Some of them have come into existence fairly recently and others have acquired a considerable degree of importance in recent years. The original scheme was contained in the 1973 Finance Act. It must be understood that a grant on its own to one of these institutions will not allow tax relief to the person making the grant. The section states that it must be:

for the purpose of enabling the university or the approved body to undertake research in, or engage in the teaching of, approved subjects.

The Finance Act of 1973 and the Minister's amendment in this case sets out the approved subjects as follows: (a) industrial relations, (b) marketing or (c) any other subject which is approved for the purposes of this section by the Minister for Finance.

I wish to know from the Minister if he or his predecessors have approved any other subjects that would entitle a taxpayer to tax relief for the purpose of this section? What is the mechanism whereby the Minister approves extra subjects to come into this category? Where can a list of such subjects be found? Does he not think there are other subjects, particularly in the technological area, which it would be worth bringing into the operation of the section? Why is the tax relief in this section and in the relevant section in the 1973 Act confined to people who carry on a trade or profession? Why is the PAYE person excluded from the operation of the scheme?

The approved subjects as specified in the legislation are industrial relations, marketing or any other subject that may be approved by the Minister for Finance. Grants in relation to a number of other subjects have been approved since 1973. I will give the Deputy a list. They are business policy, engineering, social science research, psychiatry, adult and community education, business law, environmental studies, architecture, Irish history, biotechnology, transportation, electronic engineering, business studies and corporate planning. Those are the ones that have been approved since 1973 under the provisions of the 1973 legislation.

The reason that the provision applies only to persons carrying on a trade or profession is that at the time it seemed that this was a source from which particular courses in third level institutions might be supported because of a professional interest in the development of those subjects or skills in our third level institutions. It is intended as a means by which the business community, first of all, can identify a course for which there is a need and, second, assist in its promotion.

Question put and agreed to.
NEW SECTION.

I move amendment No. 40 (a):

In page 16, before section 16, to insert a new section as follows:

"16.—(1) (a) In this section—

‘tax' means income tax or corporation tax, as the case may be;

‘the President's Award Scheme' means the award scheme known as "‘Gaisce'— The President's Award" established under the patronage of Uachtarán na hÉireann by trust deed dated the 28th day of March, 1985.

(b) This section applies to a gift of money which—

(i) is made on or before the 5th day of April, 1986, to the trustees of the President's Award Scheme to be applied by them for the purposes of that scheme, and

(ii) is not deductible in computing for the purposes of tax the profits or gains of a trade or profession or is not income to which the provisions of section 439 of the Income Tax Act, 1967, apply.

(2) Where a person proves that he has made a gift to which this section applies and claims relief from tax by reference thereto, the provisions of subsection (3) or, as the case may be, subsection (4) shall apply.

(3) for the purposes of income tax for the year of assessment in which a person makes a gift to which this section applies, the amount thereof shall, subject to subsection (4), be deducted from or set off against any income of the person chargeable to income tax for that year and tax shall, where necessary, be discharged or repaid accordingly; and the total income of the person or, where the person is a wife whose husband is assessed to income tax in accordance with the provisions of section 194 (inserted by the Finance Act, 1980) of the Income Tax Act, 1967, the total income of the husband shall be calculated accordingly:

Provided that relief under this section shall not be given to a person for a year of assessment—

(a) if the amount of the gift (or the aggregate of the amounts of gifts) made by him in that year, being a gift or gifts, as the case may be, to which this section applies, does not exceed £100, or

(b) to the extent to which the amount of the gifts (or the aggregate of the amounts of gifts) made by him in that year, being a gift or gifts, as the case may be, to which this section applies, exceeds £10,000.

(4) (a) Subject to paragraph (b), where a gift to which this section applies is made by a company the amount thereof shall, for the purposes of corporation tax, be deemed to be a loss incurred by the company in a separate trade in the accounting period of the company in which the gift is made.

(b) No relief under this section shall be given to a company in respect of a gift (or the aggregate of the amounts of gifts) made by it in any period of twelve months ending on the 5th day of April, being a gift or gifts, as the case may be, to which this section applies—

(i) if the amount of the gift (or the aggregate of the amounts of those gifts) does not exceed £100, or

(ii) to the extent to which the amount of the gift (or the aggregate of the amounts of those gifts) exceeds £10,000.".

Amendment agreed to.
Sections 16 and 17 agreed to.
SECTION 18.

Amendment No. 41 is out of order.

Question proposed: "That section 18 stand part of the Bill."

The original proposal of the Minister in the budget for taxing building societies was at a rate of 85 per cent of the standard rate which I understand to be 29.75 per cent. In this section the Minister has reduced that to 80 per cent of the standard rate, representing taxation of 28 per cent. I presume the Minister's idea in this is to attempt to keep mortgage rates down by reducing the amount of tax take from the building societies. The Minister should have adhered to his original decision of 85 per cent. If he looks at the records of building societies he will see that they have had ample funds from which to increase their take — in other words, the take of the directors has been away in advance, in fact double, the rate of inflation in the past year and the year before.

The Minister should have looked at that area before he reduced the tax take because, even with a tax take of 85 per cent of the standard rate, there would be no argument for increasing the mortgage rate. The Minister should say to the building societies also that if they are worried about the tax rate and if they are prepared to give the Minister access to their records — I understand they have not agreed to this — so that he could get an accurate view of the approporiate rate, this would be the appropriate way in which to approach them. If they contend that the tax is too high it is up to them to prove it. Total access to their revenue and profits and the relevant amount taken by directors would all constitute relevant information for the Minister before deciding on what should be the appropriate rate.

As the House is aware, the original budget proposals were adjusted following discussions which the Minister for the Environment and I had with the Building Societies' Association aimed at producing a formula which would keep to a minimum the increase in mortgage rates which the building societies said they required in order to maintain what they would regard as an adequate level of interest rate payable on their deposits. The measures now provided for produce the same additional tax yield as I have provided for in my budget statement.

I want to draw the Minister's attention to the fees and emoluments paid by building societies which is a matter that should have been taken into consideration in relation to tax. For example, the Irish Permanent Building Society, under "Management Expenses" have directors' emoluments down under fees — 1983, £75,700; 1984, £89,000, an increase of 18 per cent. Under the heading of "Other Emoluments" there appear the figures of £233,037 in 1983 and £282,015 in 1984, an increase of 21 per cent. Figures for the First National Building Society are somewhat similar, showing a 13 per cent increase in directors' fees from £45,000 to £51,000 and a 20 per cent increase in "Other Emoluments" from £115,000 to £137,000. These figures are being taken from reports of the building societies in question. On page 10 of the Educational Building Society's report there is shown a 10 per cent increase in directors' fees from £52,000 to £58,800, and a 20 per cent increase from £102,000 to £123,000 in emoluments of executive directors.

The Government issued guidelines in regard to pay in the public and private sectors. The Minister should have looked at the pay of directors themselves in fees and emoluments, showing an 18 per cent, 13 per cent, 21 per cent and 20 per cent increase, way above the relevant increases given in either the public or private sector employment area. The Minister should have asked why, if profits are so low, they were unable to pay the standard rate of tax without increasing the burden on householders and yet were able to give such large increases to their directors in fees and other emoluments. Does the Minister not consider that to be the relevant approach?

The factors referred to by Deputy Mac Giolla have their own particular interest. I am afraid I would have to say that they are not matters dealt with in the Bill. I can inform Deputy Mac Giolla that there was more than a passing reference to levels of remuneration in the building societies in the course of the discussions which the Minister for the Environment and I had with them.

Question put and agreed to.
Section 19 agreed to.
SECTION 20.
Question proposed: "That section 20 stand part of the Bill."

I am opposed to this section. This provision seeks to give new tax relief to landlords who already have gained considerably from their tenants in the last few years with the end of the Rent Restrictions Act, a huge increase in rents and a subsidy from the Exchequer. In other words, the taxpayer is subsidising landlords where people are unable to pay what is described as fair rent. Landlords are supposed to be in the classic position of depending on market forces. They decide whether to go into the business of being landlords or not having considered what the market will give. However, in Ireland we have gone to the other extreme by subsidising landlords to stay in the business. The amount they look for in rent is beyond what people are able to pay with the result that the taxpayer is asked to pay the balance to the landlord.

Instead of tackling that extraordinary position that landlords have been put in — there was a condition that landlords would refurbish and maintain their housing stock — we are giving them further benefits. The Minister, if he confers with the Minister for the Environment on this issue, will find that landlords are not adhering to the condition. If any Member maintains they are I will bring him to an estate where landlords have not put one nail in the house since rents were increased from £2.50 to £25 or £30 per week. Landlords in that area have not kept their part of the bargain. However, we are giving them further tax relief on refurbishment of substandard buildings.

Landlords who refuse to carry out their part of the bargain contained in legislation, or court decisions announced when the Rent Restrictions Act was abolished, are getting further tax concessions. A bargain was made that landlords would maintain the buildings, the roofs and walls, but they did not do so. The buildings are deteriorating. The Minister for Finance, recognising the deterioration in the housing stock, is now giving landlords extra tax relief on refurbishment as well as subsidising landlords with taxpayers' money on rent. It appears that if landlords do what the courts have ordered them to do they will get special tax relief. This amounts to another enormous burden being imposed on taxpayers to pay off landlords who are already ripping off tenants and taxpayers and not looking after their housing stock.

The provision will only benefit private landlords. Private flats, multiple residential accommodation and so on are included. The Minister has been badly advised on this issue. The Minister for the Environment may be worried about the deterioration in the housing stock, but he should have insisted on landlords doing what the courts instructed them to do when imposing new rents on tenants. Landlords have refused to carry out the wishes of the courts. Instead of asking the Minister for Finance to give further tax relief to landlords to encourage them to look after houses at the expense of the taxpayer, the Minister for the Environment should have insisted on them complying with the wishes of the courts. The Minister should insist on the Department of the Environment enforcing existing regulations rather than giving tax relief to them.

Is the section limited to extensions of existing accommodation in a new multiple accommodation?

We pointed out in the national plan that there would be a further extension of the scope of application of the tax incentive for the construction of rented residential accommodation provided for in section 23 of the Finance Act, 1981. We are giving effect to that in sections 20 and 21. The measures arise from the consideration, particularly in Dublin's inner city and in other towns, that there is a need for an incentive to encourage the rehabilitation of substantial numbers of substandard dwellings which, I am advised, might not otherwise be properly refurbished or rehabilitated. The measures in sections 20 and 21 are assigned to encourage an increase in the housing stock and an improvement in the quality.

The two measures will cover expenditure on work carried out in the two years beginning 1 April 1985. The scope of the measure is designed to ensure rehabilitation of buildings that were getting into bad condition. It is one of the requirements in order to qualify for the relief that the refurbished buildings must meet all requirements, particularly those relating to the size and standard of accommodation available as set out in section 23 of the Finance Act, 1981.

I understand the concern of Deputy Mac Giolla in relation to the obligation, whether moral or legal, on owners of property to maintain that property in reasonable order, but that is a separate problem from the one being addressed in the Bill. These sections are designed to encourage an expansion and improvement of the stock. The concerns about maintenance of existing stock while legitimate — I do not argue with that — are not matters that would fall to be covered in the context of the Bill.

I support the section. While the concern expressed by Deputy Mac Giolla is reasonable I must point out to him that it is covered in landlord and tenant legislation. The rights of the tenant, which are of considerable concern, and the balancing right or obligation of the landlord are covered in other legislation. The provision under discussion deals with refurbishing substandard buildings and, in particular, the provision of multiple residential additional accommodation. For some time residential accommodation in the centre of our cities, Dublin, Limerick and Cork, and in some of our towns, has been allowed to fall into decay. Old streets have lost their character.

The Minister's proposal is worth while. The alternative would be to allow a continuing of the trend of ribbon development, expanding towns far from the centre and providing services such as water and sewerage that would be very costly. For that reason I welcome this provision. One is always concerned that tax incentives such as this should not be abused by profiteers. Having regard to the conditions attaching to section 20, abuses will be unlikely. A number of conditions are set out in section 23 of the 1981 Act. I am glad also that to qualify for relief in this case the expenditure must be certified by the Minister for the Environment to have been necessary to ensure suitability as a dwelling of any residential unit in the building. While I understand Deputy Mac Giolla's concern in respect of tenant's rights, this is a different matter and if it does anything to improve the character of old decrepit buildings, it is worth while. Obviously this provision will have to be monitored closely but we support it.

Will these provisions apply to buildings already housing tenants or only to buildings which will provide new accommodation?

The provisions of section 20 which cover refurbishments would apply to buildings already housing tenants. The provisions of section 21 concern the conversion of certain buildings into multiple residential accommodation and they would be considered to be net additions to the housing stock.

This is not a different matter. It relates specifically to this section. I would like to correct the impression I might have given that I was speaking of all landlords or anybody with anything to do with residential property. Some landlords look after their property and comply with their legal obligation to do so. It is a legal and not a moral obligation under the Housing (Private Rented Dwellings) Act. Some landlords do not comply with that Act. Landlords will avail of these tax reliefs and incentives. At the moment it appears that a landlord can get tax relief to refurbish a property under this scheme while at the same time allowing another property fall into decay, a property which he can refurbish in ten or 15 years time availing of this tax incentive. This does not really solve the problem. I agree with Deputy O'Kennedy that it is important to give some incentives to develop areas which are decaying but the Minister should ensure that any property owner who is not fulfilling his obligations under existing legislation should not be allowed tax relief under this section for other property. Some landlords are taking what they can get from tenants without maintaining the houses. The main purpose of this provision is to ensure that the housing stock is maintained or improved. I agree with that, but we should not give further tax relief to people who have proved themselves not to be maintaining their property. Such people will be the first to avail of the tax incentive for refurbishment and development of property while allowing other property to go into decay. The Minister should ensure that that cannot happen.

I share Deputy Mac Giolla's concern. Perhaps there is not a regulation in this Bill to ensure that people who allow property to fall into decay cannot avail of a tax incentive years later to refurbish it. To avoid such a situation developing it might be possible to extend the certificate to be given by the Minister for the Environment not just to the suitability of the premises but to the suitability of the applicant. If by his previous conduct in relation to property management an applicant has proved himself unfit to qualify, he should not qualify for this relief. It is something that should be considered.

I support the points made by Deputy Mac Giolla and Deputy O'Kennedy. I welcome this extension of tax relief. However, I note that the section is confined in the same way as section 23 of the Finance Act, 1981 as amended. Section 23 of the Finance Act, 1981 was an excellent and very imaginative section which was welcomed on all sides. We cannot get away from the fact that the effectiveness of section 23 was very much reduced by section 29 of the Finance Act, 1983 which confined the expenditure which a person could claim to expenditure on the one building to which the outlay was attributable. It was recognised that that was extremely restrictive. It took the good out of section 23 to a large extent. This relief will be similarly restrictive and it will be just as lacking in effectiveness as was section 23 following the Finance Act, 1983.

The definition of "relevant expenditure" is needlessly restrictive. The expenditure which is allowable when it has been incurred in relation to the conversion of a building into various units which can be let is confined to expenditure which is directly attributable to those units and any expenditure incurred in any part of a building which is not a house at the time the operation is completed is not allowable. That is needlessly restrictive if we want to encourage people to convert buildings to let them. There may be many other aspects of the building which need to be converted for the purpose of letting but would not be a house when the job was completed. It is unreasonable that that sort of expenditure is excluded.

Deputy O'Kennedy suggested that we should have some regard to the suitability of the applicant. I appreciate the Deputy's point but the tax law is not an appropriate vehicle for that suggestion.

That was why I suggested the Minister for the Environment.

The problem to which Deputy Mac Giolla refers really concerns the application of other legislation. While there may be connections between the two, it is better to treat it in that way as a separate problem rather than mix it up with this. Another reason for doing that is that the purpose of these provisions here — Deputy O'Dea has just referred to one element of it — is to provide for a limited period tax relief against the rental income arising from the premises in question, and application of these sections is limited in time. I am not inclined to favour Deputy O'Dea's expansion of the scope of that relief, firstly, because the kind of landlords to which Deputy Mac Giolla refers would be getting tax relief against rental income in relation to premises that they were allowing to deteriorate anyway.

Not if Deputy O'Kennedy's suggestion is taken up.

Secondly, I do not believe that it is appropriate that simply because a person carries out refurbishment or conversion work on one building he should be able to claim the cost of doing that work against all of his rental income on other buildings, including income from other buildings on which he has not carried out any work and on which perhaps he does not need to carry out any work. To sum up on the first part of the argument, I cannot see a way in which we could use tax law to ensure the suitability of applicants.

Perhaps the Minister could consult with his colleague——

As Deputy O'Kennedy says, it requires a look at the means that we have to ensure that other legislative provisions are applied properly. I would hesitate to limit the scope of this or to make it dependent on a further examination of all of the activities of a person involved. Obviously, there is a need for refurbishment or conversion of buildings in order to provide extra accommodation.

The first question raised by Deputy O'Dea goes back to the original form of section 23 of the Finance Act, 1981. We had this discussion last year. I do not accept that section 29 of the Finance Act, 1983, was what stopped the volume of activity taking place in relation to the building of new residential units. A far more important factor was that the level of demand had simply tailed off for a variety of reasons. I say as I said on that occasion that I cannot see the justification for allowing a write-off against tax of the capital cost of constructing one building against the rental income from a number of other totally unconnected buildings. The relevant expenditure falls to be relieved against rental income from the refurbished building. We are talking here about residential units. If a building includes both residential units and non-residential units, relevant expenditure in that case would be determined by the apportionment of the expenditure over the residential units as against the non-residential units. The relevant apportionment would be made and relief would be limited to the amount of relevant expenditure on the residential units. The object of these sections is to increase the amount and quality of residential accommodation. We are not particularly concerned with increasing either the amount or quality of, for example, retail outlet accommodation, offices or anything else of that kind.

Would the Minister consult with the Minister for the Environment in relation to the certification of the property to qualify for relief? It is in the Act.

I appreciate that it cannot be done in tax law here but the Minister for the Environment might be able to regulate it in some way in respect of the applicant.

Deputy O'Kennedy is talking about certification of the applicant rather than of the property?

We provide for certification of the property here.

I know that.

I am sure that the Minister for the Environment would like to have a look at the certification of the applicants.

I do not think that the Minister has replied adequately to Deputy O'Kennedy's point which is an excellent solution for the type of thing I had in mind. I am sure the Minister will agree — he has not denied it — that once this Finance Bill is passed it does not matter whether you are a good or bad landlord, whether you have or have not maintained your property, you will still qualify under these tax provisions if you are in the business. As the Minister has said, tax law is not the appropriate medium to provide against that, but he has not shown what is the appropriate medium. Can he speak to the Minister for the Environment? Is there a way to ensure, through other legislation or through ministerial directions or orders, qualification certificates or whatever, that this does not happen? Does the Minister think that, possibly, through discussions with some other Ministers, they can ensure that that does not happen? He has not answered that.

I have said that I do not think we can deal in tax law with the question of the suitability of applicants. The problem seems to be the application of other legislation. I am quite prepared to take it up with the Minister for the Environment who, I am sure, is just as anxious as are Deputy Mac Giolla, Deputy O'Kennedy and myself to ensure that we prevent abuses of other legislation. That is a matter separate from the passing of this legislation.

Will the Minister take it up with the Minister for the Environment?

Question put and agreed to.
SECTION 21.

Amendment No. 42 has been ruled out of order as involving a charge upon the people. The section is being opposed by Deputies Mac Giolla and De Rossa.

Question proposed: "That section 21 stand part of the Bill."

I do not want to pursue the same argument again so I will make the point in connection with the amendment that was ruled out of order. Suggestions of tax on derelict sites have been discussed for a number of years now and to the best of my knowledge this may well be in the Programme for Government. It has been discussed at both local authority and Government levels, at Labour Party conferences and, I am sure, at other party conferences also. It has been regarded as something which can be of importance in assuring that derelict sites are developed by imposing a progressive taxation system on derelict sites. Some local authorities are discussing it in the context of local authority finance and new local authority charges. It has been discussed in Dublin City Council as a possible way of raising local finance if the Minister is not interested in it. In the context of section 21 of this Bill and the development of derelict property and sites the question of a derelict sites tax will be of enormous importance apart from the revenue it would bring in. Perhaps the Minister should discuss this also with the Minister for the Environment who at present is working on legislation in connection with local authority finance. It would add to the Minister's provisions here if there was also a penalty on dereliction, and the idea of a derelict site tax is to have a penalty on derelict property. Perhaps the Minister for the Environment has this in mind in his local government finance provisions, but the Minister here should discuss that with him because it would be even more important to have a penalty than to have an incentive. The Minister is working on the incentive carrot end of it. As we said in the case of the Private Rented Dwellings Act, the Minister for the Environment should have used the stick a little more, and in this case the stick is a tax on derelict sites.

I am not sure if we are discussing amendment 42, which is out of order, or the section. On amendment 42, even if it is out of order, I want to tell Deputy Mac Giolla that I will take a note of what he said but I want to point out that most of what would commonly be regarded as derelict sites are owned by local authorities.

I understand Deputy Mac Giolla is opposing section 21, unless he has changed his mind. That section gives relief for refurbishment work carried out in the course of conversions to which section 24 of the Finance Act, 1981 applies, as modified by the Finance Act, 1983. It clarifies and somewhat extends the definition of the costs that are covered by those provisions. It is a measure which is designed to facilitate or encourage the provision of extra accommodation and provides for relief in relation to the conversion into multiple dwellings of buildings that were either previously not dwellings at all or might have been single dwellings.

Question put and agreed to.
Sections 22 and 23 agreed to.
SECTION 24.
Question proposed: "That section 24 stand part of the Bill."

This section is opposed by Deputy Mac Giolla and Deputy De Rossa.

I am opposing the provisions in this section which deal with advance corporation tax because they extend the transition period for payment of advance corporation tax at 50 per cent of the full rate for a further year. The purpose of this section is to save companies money. I do not see what other purpose the Minister could have in mind.

We had, and still have, grave reservations about the advance corporation tax. In so far as it applies to domestic industry and to a considerable extent imposes a discriminatory advantage on foreign industry which has means of avoiding the application of this tax against domestic industry, and in so far as this is in any way a postponement of the application of the payment of an advance corporation tax, I welcome it. I would like to be able to welcome the abolition of the provision in toto but in so far as that is not being done, I am glad to welcome this provision, which is a step in the right direction. I would ask the Minister to bear in mind that this is having a discriminatory effect between the domestic industry and the multinationals who have a variety of means of avoiding the application of this tax.

We have discussed this matter on many occasions and I do not think the Opposition or any other commentators inside or outside this House, have produced an argument that fundamentally attacks the principle of advance corporation tax. The intention of the provision in relation to advance corporation tax is to ensure that a net tax credit is not paid where no tax will finally be paid.

I recognise the fact that the provision of advance corporation tax could give rise to difficulties for a number of firms and for that reason we have not applied the full rate. It has been applied at 50 per cent of the normal rate since it was first introduced in the Finance Act, 1983. I propose to continue an extension of that transitional arrangement to distributions made on or before 31 December 1985, the same logic as applied in 1983 and in 1984. I am providing for an extension of what is a relief from the provisions of full advance corporation tax for this year because, at this point, the situation justifies it.

Question put and agreed to.
Section 25 agreed to.
SECTION 26.
Question proposed: "That section 26 stand part of the Bill."

If the Minister is prepared to pay the extra imposition which he is proposing to impose on tobacco products, who am I to oppose it?

Question put and agreed to.
Section 27 agreed to.
SECTION 28.
Question proposed: "That section 28 stand part of the Bill."

This section deals with the increase in excise duty on hydrocarbons and petroleum products. The Minister for Finance and the Government, have, in our opinion, increased the level of excise duty in recent years on those products to the point that the motor industry and the private car owner are no longer able to sustain the burden. When the Government came into office the excise duty content on the gallon of petroleum products was 85.7p. By January 1984 they had increased the element to 108.1p and this Bill now proposes to increase it still further by £1.78. When I do my conversions I find that since this Government came into office we are talking about a 50 per cent increase in the excise duty element in the price of the gallon of petrol.

I believe, and this has been demonstrated through returns in respect of petroleum products and beer, that the level of excise duty has clearly given rise to diminishing returns in petroleum products particularly. The extraordinary consequence is that for an increasing level of excise duty we are getting a diminishing return of revenue.

In 1983 the excise duty yield on petroleum products was £275 million. This in effect decreased substantially in 1984 when the gross yield was only £282 million, a nominal increase of £7 million. It represents at least a 5 per cent reduction in real terms on the 1983 revenue and, despite this huge increase in excise duty — or, more accurately, because of it — the revenue yield in real terms in 1983-84 dropped dramatically. We are concerned that the impact of this latest increase and the appreciation of the dollar will have a most disastrous effect on trade in general. The motor trade dramatically demonstrate to the Minister the impact of this on their business. This is particularly so in the Border regions which have been decimated by this imposition and there are a number of untended garages and petrol pumps within a 20 mile radius of the Border. There are two Deputies present who, from experience, can testify that this is so. This must be a source of concern and the reason is that the huge difference in the price of petrol across the Border is a major attraction to people within a 20 mile radius and further, to purchase their petrol there. I have asked traders on both sides of the Border what they think of the Government in this respect and many garage owners across the Border regard the Minister as the hero of the hour, the day, the month and the year. As one passes through Deputy Conlon's area to Bundoran, a little petrol station there is doing a roaring trade and you will travel a long way down South before you find a petrol station doing any trade. It is time that we looked at the impact of this on the business section, especially in the Border regions. From the figures I have given it is obvious that there is also an impact on revenue because the employment loss in these labour intensive areas is having a very damaging effect on the whole social and economic climate in these regions.

We have made constant appeals in regard to this matter. In 1983, 1984 and at various stages in between, I appealed to the Minister to review his attitude on excise duties and VAT levels. I should also like to make an appeal in regard to beer but there is no mechanism open to me to do this because the Minister is not increasing the level of excise duty on it——

The Deputy is not allowed to propose an increase on beer.

No, but I am allowed to propose a selective reduction in the price of beer which would be in the interests of the trade, customers, tourism and revenue.

We have to put up with the rattling of cans in the boots of cars which disturbs people's sleep.

The Minister has chosen to ignore our appeals over the last two years in regard to the motor trade and he seems determined in his strange, stubborn way to heap on further levels of excise duty. For some reason, he is not taking note of the drop in revenue yield and I do not understand this particularly as the example in relation to spirits proved our point. The other consequence is that the revenue must come from somewhere and if there are diminishing returns in revenue in certain selected VAT areas what happens next? The level of allowances or reduction of income tax cannot be allowed and the PAYE taxpayer will be further penalised to offset the loss of excise duty because of a shortsighted and disastrous series of decisions over the last few years.

There is a considerable potential for tourism this year because of the strength of the dollar. We are trying to encourage employment in that sector and in the trade services generally, but Government actions are having the opposite effect. I do not suppose the Minister will change his mind at this stage but I wish to state our position and to assure the Minister that we will be as good as our word when we change places. We will be looking at it on that basis because the evidence is conclusive.

This section imposes a sizeable increase on the price of petrol. It weighs very heavily on the motoring public in general but even more so on the people in my constituency which is within 25 to 30 miles of the Border. While I agree that revenue must come from somewhere, I appeal to the Minister to give special attention to the Border area. For a number of years now, petrol has been cheaper in Northern Ireland but recently the disparity has escalated and the difference at present is about 75 pence per gallon.

Every Saturday, people go up to Northern Ireland for their weekly fill of petrol and while they are there, they also buy their groceries. Thanks to the reduction in VAT, at present there is not a great difference in the price of many goods but, unfortunately, the habit has developed and cheaper petrol is the root cause. All this revenue is being lost and a number of petrol filling stations in my constituency have closed. Some are staying open hoping that there will be better days. A friend of mine has a petrol filling station on the outskirts of Monaghan town and up to a few years ago his weekly sales were in the region of 6,500 gallons per week but he is now selling only 1,000 gallons per week.

Many people buy a very small amount of petrol just to get them across the Border to fill their cars.

My friend is just hanging on at present and the Minister should do something for people with filling stations within a 30 mile radius of the Border. It has been said in some areas that we would be creating a second Border. I do not think that is so. Some system could be devised — and it would be self-financing — whereby a filling station on the Border would get a rebate of 60p a gallon. That rebate could be reduced by 2p per gallon per mile within a radius of 30 miles. The further back you were from the Border the more you would pay for your petrol. I live within ten miles of Monaghan town. It would not pay me to travel to Monaghan town to save 20p a gallon.

I have here certified figures from one petrol company operating in the Border area. I will give the name of the company to the Minister afterwards. From 1981 to 1984 their percentage sales dropped by 49.3 per cent. Having examined stations located on a line drawn between Buncrana, Letterkenny, Donegal, Ballyshannon, Bundoran, Sligo, Cavan, Carrickmacross, and Dundalk the following statistics emerged. From 1981 to 1984 the company's sales dropped from 14 million litres to seven million litres. During that time 20 of their outlets closed. That is only one petrol company. I understand that on every gallon of petrol sold in the Republic, between excise duty and VAT the Revenue get £1.80. If we could increase our sales by 50 per cent within that 30 mile radius, we would recoup what we would lose by the reduction of 60p per gallon. The scheme would be self-financing.

This would save the livelihood of small grocers and petrol salesmen in the area. If those people were making a profit, they would also be paying income tax which is being lost to the Revenue. My friends across the Border in South Armagh, South Tyrone and South Fermanagh would not like to hear me say what I have just said. I represent people who have to make a livelihood. They have been hit very hard over the past number of years. I appeal to the Minister to introduce some such scheme. This is not beyond the capabilities of the people who work in Revenue. Apparently they do not want to hear about it. They do not want the trouble. The Minister should introduce a scheme which would give relief to the petrol sales people within a 30 mile radius of the Border. I appreciate that revenue must be got in and that a big reduction in the price of petrol across the country would cost millions of pounds.

It would not.

The scheme I suggested might not work but some other scheme might work and give relief to people who are very hard pressed in the Border areas.

The Government's policies have had devastating consequences on the Border economy. That is very obvious this evening having heard such a spirited attack on these policies from a Government backbencher. When the Government took office the traffic was coming to the Republic to shop at weekends. There was a good deal of traffic from across the Border into towns on this side of the Border. In their first month in office the price of petrol went up on three different occasions, a total increase of 35p per gallon. The result was that motorists in the Border constituences started to go across the Border to buy their petrol. They took their wives and families with them and did their shopping on the other side of the Border. People living further afield thought they were missing something.

The price variation is not that great in the ordinary range of household goods. As many as 150 buses left this city to go to Newry to do their shopping in the weeks before Christmas. This was a result of a decision by the Minister and the Government to create a price gap in the price of petrol which made it attractive for motorists on this side of the Border to cross the Border to buy their petrol. In my own town of Carrickmacross two petrol stations closed down and in the neighbouring town of Castleblayney ten miles away three petrol stations closed down in the past ten years. In Armagh there is a new petrol filling station with six fast filling pumps. There is always a queue of cars. I saw as many as 20 cars on the main Dundalk-Monaghan road waiting for petrol. All this is a result of a lack of knowledge and insight on the part of the Government due to the fact that there is not a Minister from a Border constituency at the Cabinet table. This is the first time in the history of the State that this has been the case.

We will correct that.

That is not in the section.

If there was a Minister from a Border constituency at the Cabinet table this section would not be in the Bill. The excise duty on petrol would have been reduced. I have not got the slightest doubt about that. If any Minister had any knowledge of the Border areas, there would have been a reduction in the price of petrol.

Deputy Conlon, for instance.

It is estimated by the traders in the Border counties that £200 million of revenue is lost to the State as a result of the decision by the Government to keep increasing the excise duty on petrol. Apart from the revenue lost because people are buying petrol on the other side of the Border, other goods are bought there too with a consequent loss of VAT and other taxes to this State.

I raised this matter with the Taoiseach on budget day. He seemed to believe that sometimes they had it good on this side of the Border and sometimes they had it good on the other side of the Border. He wondered what they were worrying about if things were not so good now on this side of the Border because they were good in the past.

That is not what he said.

The Minister can check the record of the House and see what the Taoiseach said. There is a possibility of the price of petrol coming down by 10p a gallon this year following the OPEC conference in Geneva. The Taoiseach said that if people are paying the same price for petrol at the end of this year as they were at the beginning of the year, they will have nothing to complain about. In other words, people are not entitled to benefit from a reduction in the price of petrol as the result of a decision by the OPEC countries. I support my colleague Deputy O'Kennedy. I appeal to the Minister to look at the Border counties and do something to ensure that their economy will not be destroyed totally.

I should like to support our spokesman and Deputy Conlon and Deputy O'Hanlon in a strong plea to the Minister with regard to excise duties and VAT in the Border area. I know the Minister will argue that he has to get his money. I notice that there is a gap of £886 million between receipts and issues. That is not the whole picture. It relates only to a four month period; and, taking into consideration the various dates for receipts and issues changing during the 12 month period, the picture may be different. Nevertheless, the matter is serious. The speakers who have contributed this evening have contended that if the Minister took some action in regard to the excise duty and VAT on petrol and also on beer he would be gaining money rather than losing money.

Filling stations have been closing. I mentioned here previously that I had to leave my constituency and cross the Border in the Blacklion area because the two filling stations in my area had closed. Admittedly, Blacklion and Belcoo are twins towns but it became impossible for the stations on this side of the Border to survive. If I needed enough petrol to enable me to drive home from the other side of the Border, I would buy the minimum amount, perhaps £1's worth. I am not claiming any virtue for this but I argue that whatever salary is disbursed for me comes out of our funds and not out of the funds of Her Majesty. I argue this point with constituents also but it is a counsel of perfection so far as they are concerned. They argue that they are being hard pressed because of other taxes and so on and so they buy their petrol in the Six Counties. As other Deputies have mentioned, when these people are on the other side of the Border they make other purchases also, though in some cases they may pay more than they would pay in the Republic. However, sometimes they think they are getting more value for their money.

The purchasing of beer in the Six Counties by people from this side of the Border had got out of hand. The Department issued some instruction in this regard. Apparently some people were under the impression that they could import legally up to 200 cans of Harp at a time but when this sort of purchasing was becoming something of a scandal, some instruction issued from the Minister's office. Considering that the amount in respect of excise is about £365 million for the four month period of this year compared with a sum of £349 million this time last year and taking inflation into account, the Minister can see that he is losing out. Even the VAT has increased by about £30 million for this period and that is not satisfactory, taking inflation into account also.

There may be difficulty for the Minister in finding a solution. Deputy Conlon's suggestion is not a bad one and ought to be considered. Perhaps the Department could devise some sort of sliding scale which would result at least in saving the businesses and the livelihoods of a considerable number of people along the Border. This matter has been thrashed out time and again and I shall not delay the House further on it except to ask the Minister to abandon his stonewalling and ask his officials to consider the matter. Then, if there is found to be a real problem they could exercise their considerable ability in finding some way of alleviating matters.

The Minister may be persuaded by the fact that with the exception of my fellow Tipperary man, Deputy Mac Giolla, and myself, he is confronted with the united team of the Deputies from Cavan-Monaghan on this issue. That speaks for itself. In other words, with the exception of those of us who have to be here, namely, the Minister, Deputy Mac Giolla and myself, all the other Members represent that constituency.

I join with the previous speakers in expressing the hope that even at this stage the Minister will take some action to alleviate the problems being experienced by traders in the Border area. Consistently in the months following the 1983 budget we reminded the Minister of the damage that was being done to the whole trading structure of the Border regions by way of the impositions at that time. However, the Minister allowed matters to continue, though he has brought about some revision in terms of VAT.

A very serious situation was allowed to develop in so far as this issue is concerned. A Deputy from the Government side — I think it was Deputy Mitchell — suggested that the Government devise some measures to offset this total imbalance in terms of trading within a close radius of the Border. The trading structures along the Border, be they shops or filling stations, were established as a result of very hard work and in times of much difficulty. It is sad now that so many of these businesses have to close. Only on Tuesday last I had occasion to travel via Dundalk and in the little village of Milltown, which is just about three miles north of the town, I noticed a closed sign on a filling station. The real black spot in the area is Clones. In their report the EC Social and Economic Committee accepted, following their visit to the area, that the Border region was the most severely disadvantaged of any country in the Community. That committee pinpointed Clones for special attention. This town has suffered seriously in terms of trade. The Government and their agencies should be doing something to alleviate the problem in Clones. The closure of a factory there was a big blow to the town but there are a number of cluster units which could be put into production so as to alleviate the problem in some small way.

Following the 1983 budget, chambers of commerce and groups of traders made their way to Dublin to point out to the Government the problems that were being created for traders in the Border region. Since then we have been receiving some information by way of figures at Question Time but one wonders how accurate these figures are. My guess is that the damage is much more serious than the figures suggest. One must take inflation into account also.

When the Minister for Defence attended a political meeting in Cootehill he was pressured by the Press and by Fine Gael representatives regarding the damage that had been done to the area by Government measures. The Minister replied that there would be difficulty in taking action to rectify the situation because any such action would be unconstitutional. Apparently there was nothing unconstitutional about the measures introduced by the Minister for Finance in 1983 which are still in force. The Minister for Defence, Deputy Cooney, said that it would be unconstitutional to do anything for that area that was not being done for other areas. It showed that there was not a realisation of the disadvantages under which the Border area operated or the serious impact of Government action over the previous two years.

I take it that we are on section 28. That is a section which has, with respect, very little to do with political meetings attended by any Ministers anywhere outside this House. Section 28 confirms a financial resolution passed by this House on budget day. It confirms a decision that has already been made in this House. I wish to point that out to the Deputies. I take some pleasure in the fact that of all the comments made here this afternoon, a specific proposal was made by my colleague, Deputy Conlon. He was the only one to make a specific proposal in this area.

We all did.

If the Minister is not careful——

The Minister for Defence has said that it is unconstitutional.

That says a great deal to me. It bears out a great deal of what I have been saying——

I am glad that the Minister is accepting it. That is the main thing.

——about the Opposition since December 1982. They do not seem to be up to the job at all in terms of putting forward proposals——

I object. We came in here and made suggestions that were recommended in a report from the Economic and Social Research Institute——

There is no getting away from the fact——

——about the EC and the Minister insulted us. He should go away and bury his head.

On a point of order——

In terms of putting forward alternative proposals, the only proposal made here this afternoon——

Deputy O'Kennedy, is it a point of order?

It is a point of order.

Deputy O'Kennedy on a point of order. It is irritating to have matters which are not points of order.

In relation to the proposal mentioned by the Minister, I wanted to be clear on the precise proposal to which the Minister was referring.

That is not a point of order. The Deputy can intervene again when the Minister sits down.

He is only damning with faint praise. He will reject Deputy Conlon's proposal.

He did not say that.

I repeat that the only proposal made by anybody here this afternoon, including Deputy Wilson of the leather lungs, for all that he shouts, was made by Deputy Conlon.

On a point of order, since when did the omniscient Minister for Finance develop medical expertise which would enable him to assess my lungs as being made of leather?

They are good. God bless them, anyway.

They are. However, I would like to know has he any other expertise? I would ask the Minister to withdraw the remark.

He thinks the Deputy's lungs are made of the same material as his neck.

I ask him to withdraw the remark because people might ministerpret him.

That remark was personal. It should be withdrawn.

I shall conform to the Chair's opinion. If the words offend Deputy Wilson in any way I shall, of course, withdraw them.

It is not a hypothesis at all. I just want to know how this polymath, this multi-disciplined person knows the texture of my lungs.

The Minister should not be provocative and there should not be interruptions.

I feel deeply honoured by Deputy Wilson's comments. I would have a much more modest appreciation of the extent to which I might be regarded as a polymath. That is twice this afternoon that the gentlemen of the Opposition have managed to find out the warmer side of my character.

We are waiting for the Minister to acknowledge the modesty.

Will the Minister tell us what he is going to do now? I should like to know.

Would the Minister and the Deputies please come back to section 28?

This renaissance man.

This section provides for what is, after all, an integral part of the total budgetary arithmetic. There is no doubt that there have been reductions in consumption of petrol in recent years.

Hear, hear. At least that is agreed.

There is no difficulty whatsoever. Anybody can see that. However, they have been due to quite a number of factors, including the fact that we are still dealing with the effects of the recession. There are a number of other marginal factors, such as the changeover to diesel to some extent and the changeover to auto-LPG to some extent and loss of sales across the Border. I do not accept the suggestion that has been made by the Opposition for quite some time past that a reduction in the rate of duty on hydrocarbon oils would be self-financing. We have discussed that matter on a number of occasions in the House. The immediate effect of a reduction in hydrocarbon duty would be a reduction in revenue.

The figures demonstrate that.

I have no doubt that the effect over time could well be that part of the reduction in revenue would be recouped by an increase in sales. The essential point that I make, and made repeatedly in the past, to suggestions of this kind is that this takes time. Although I do not intend to go into it in detail, it would take time and the reduction would have to be judged to bring about the effect on consumption. The Opposition have not made that case, nor have they indicated how they would deal with the situation that would arise in the interim when revenue would inevitably be below the levels provided for in the budget arithmetic.

What about Deputy Conlon's suggestion?

If Deputy Wilson would be perhaps a little less pressed to hear my reply on that point, I was going to say——

I am concerned with that scheme.

I know that he is rather sensitive this afternoon.

I am not a bit.

It would take time for the revenue to recover. The Deputies opposite have not said what they would do in the meantime, or do without, in terms of expenditure in order to get over that situation. They have pointed to the example in the reduction in excise duties on spirits. As I have pointed out time and time again, that reduction was followed, in the first instance, by a reduction in revenue and I expect that it will take some time for the volume of sales to increase to the point where the revenue loss will be replaced. There are no two ways about it — and Deputy O'Kennedy can shake his head all he likes — that would be the effect and one would have to deal with that immediate effect and recover the revenue from somewhere else, no doubt from an area that Deputy O'Kennedy or some of the other Deputies, be they from the Border counties or anywhere else, would not like.

Deputy Conlon has suggested a graded rebate on the duty, depending on the proximity of petrol stations to the Border. The Deputy knows that I have previously looked at that suggestion. There are several difficulties with it. First, excise duty is charged on petrol on delivery from a central depot. The application of a differential rate of taxation on deliveries or a rebate scheme depending on where the petrol station was located would be extremely difficult to administer. In fact, it would be, in my view, unworkable. Also, it would be very readily abused. Once the petrol leaves the depot, who is to know where it is actually going to? For those reasons, having examined the suggestion made to me previously by Deputy Conlon, I regret that it is not one that we could implement with any expectation that it would have the result that would be expected.

May I say to Deputy Conlon, welcome to the club?

Address the Chair.

May I, through the Chair, say to Deputy Conlon, welcome to the club? The only difference between the Minister's reaction to that Deputy and his reaction to any sensible suggestion made by me or my colleagues here is that he rejects Deputy Conlon's suggestion with regret. He rejects each and every one of ours with a great degree of enthusiasm and——

Satisfaction.

——wry cynicism or satisfaction. If it is any consolation to Deputy Conlon that the Minister regrets in his case, let him enjoy that consolation, such as it may be.

Let me come to the facts again. The Minister has deliberately chosen to ignore the case that we make. That is based on the actual revenue returns in respect of petroleum products. I do not propose to repeat them again. I gave the figures. They demonstrate what the Minister has now belatedly been forced to acknowledge, that there has been a considerable fall-off in consumption as a consequence of the increase in the excise duties. At least it is some progress that the Minister has been forced to acknowledge the reality which has been demonstrated by all the colleagues of the Ceann Comhairle from the Border counties in terms of the number of petrol stations that are closed, of derelict sites on this side and buoyant activity on the other side. Those facts have not been refuted. Secondly, if consumption has fallen revenue will also fall——

The revenue is increasing.

The revenue is not increasing. I have given the figures. If the Minister is going to tell me that £282 million in 1984 is the equivalent in real terms of £275 million in 1983, he had better go somewhere else.

That is not the point.

It is not equivalent; it is very much less. If the Minister is trying to show us it is equivalent he is demonstrating even more than I thought he would that he is not able to come to grips with the complexity of the office he holds. He has developed a new concept of time for revenue to recover. It did not take any time for the revenue to collapse when one considers the differential in the price.

The revenue has not collapsed and the Deputy knows it.

The time lag notion is a convenient piece of jargon to get over the fact that he is not prepared to recognise his own mistakes. The Minister made the case that here we are asking for a reduction of excise duty. We are not, although I believe we could demonstrate that with a reduction there would be greater revenue. We are asking the Minister to refuse to confirm in this legislation an increase in excise duty on hydrocarbons and petroleum products. We are asking him to leave the matter as it was. In the time since he came to office the level of excise duty on petroleum products has increased by 50 per cent and the number of traders in the Border region who are engaged in the petrol trade must have decreased by the same number. The amount of revenue accruing from excise duty on petrol is nowhere near what it would have been had the Minister left it as it was. I regret we have not convinced the Minister. I can assure Deputy Conlon we have won the argument but I know we will lose the vote.

Question put.
The Committee divided: Tá, 70; Níl, 62.

  • Allen, Bernard.
  • Barnes, Monica.
  • Barrett, Seán.
  • Barry, Myra.
  • Barry, Peter.
  • Begley, Michael.
  • Bell, Michael.
  • Boland, John.
  • Bruton, John.
  • Bruton, Richard.
  • Carey, Donal.
  • Cluskey, Frank.
  • Collins, Edward.
  • Dowling, Dick.
  • Doyle, Joe.
  • Dukes, Alan.
  • Durkan, Bernard J.
  • Farrelly, John V.
  • Fennell, Nuala.
  • Flaherty, Mary.
  • Glenn, Alice.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Hussey, Gemma.
  • Kavanagh, Liam.
  • Keating, Michael.
  • Kelly, John.
  • Kenny, Enda.
  • L'Estrange, Gerry.
  • McGahon, Brendan.
  • McGinley, Dinny.
  • McLoughlin, Frank.
  • Manning, Maurice.
  • Mitchell, Gay.
  • Mitchell, Jim.
  • Conlon, John F.
  • Connaughton, Paul.
  • Coogan, Fintan.
  • Cooney, Patrick Mark.
  • Cosgrave, Liam T.
  • Cosgrave, Michael Joe.
  • Coveney, Hugh.
  • Crotty, Kieran.
  • Crowley, Frank.
  • D'Arcy, Michael.
  • Desmond, Barry.
  • Desmond, Eileen.
  • Donnellan, John.
  • Molony, David.
  • Naughten, Liam.
  • Nealon, Ted.
  • Noonan, Michael.
  • (Limerick East)
  • O'Brien, Fergus.
  • O'Brien, Willie.
  • O'Keeffe, Jim.
  • O'Leary, Michael.
  • O'Sullivan, Toddy.
  • O'Toole, Paddy.
  • Owen, Nora.
  • Pattison, Séamus.
  • Prendergast, Frank.
  • Ryan, John.
  • Shatter, Alan.
  • Sheehan, Patrick Joseph.
  • Skelly, Liam.
  • Spring, Dick.
  • Taylor, Mervyn.
  • Taylor-Quinn, Madeline.
  • Timmins, Godfrey.
  • Yates, Ivan.

Níl

  • Ahern, Bertie.
  • Ahern, Michael.
  • Aylward, Liam.
  • Barrett, Michael.
  • Brady, Vincent.
  • Brennan, Mattie.
  • Brennan, Paudge.
  • Briscoe, Ben.
  • Browne, John.
  • Burke, Raphael P.
  • Byrne, Hugh.
  • Byrne, Seán.
  • Calleary, Seán.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Ger.
  • Coughlan, Cathal Seán.
  • Cowen, Brian.
  • Daly, Brendan.
  • De Rossa, Proinsias.
  • Doherty, Seán.
  • Fahey, Francis.
  • Fahey, Jakie.
  • Fitzgerald, Gene.
  • Fitzgerald, Liam Joseph.
  • Flynn, Pádraig.
  • Foley, Denis.
  • Gallagher, Denis.
  • Gallagher, Pat Cope.
  • Geoghegan-Quinn, Máire.
  • Harney, Mary.
  • Haughey, Charles J.
  • Hilliard, Colm.
  • Hyland, Liam.
  • Kitt, Michael.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Leonard, Tom.
  • Leyden, Terry.
  • Lyons, Denis.
  • McCarthy, Seán.
  • McEllistrim, Tom.
  • Mac Giolla, Tomás.
  • Morley, P.J.
  • Moynihan, Donal.
  • Nolan, M. J.
  • Noonan, Michael J.
  • (Limerick West)
  • O'Connell, John.
  • O'Dea, William.
  • O'Hanlon, Rory.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • Ormonde, Donal.
  • O'Rouke, Mary.
  • Reynolds, Albert.
  • Treacy, Noel.
  • Tunney, Jim.
  • Wallace, Dan.
  • Walsh, Joe.
  • Walsh, Seán.
  • Wilson, John P.
  • Wyse, Pearse.
Tellers: Tá, Deputies Barrett(Dún Laoghaire) and Taylor; Níl, Deputies V. Brady and Browne.
Question declared carried.
Progress reported; Committee to sit again.
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