Deputy Michael O'Kennedy moved the adjournment.
Valuation Bill, 1985: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a second time."
I realise time is short and I will not make a lengthy intervention. My sole purpose in intervening is to seek clarification. As the House will be aware, there were reports in yesterday's paper that there may be 16,000 jobs lost over this measure. I am sure this is not correct but I would like clarification of a few issues.
The only sector paying rates at the moment is the commercial community. They do so regardless of the service they get from the local authority and regardless of their profit and loss account. That is an accepted situation. The reason for this, I understand, is due to a court decision whereby the rateable valuation of certain property came into question. I thought at first that this was simply a technical change to allow for that but there seems to be a misunderstanding about certain items of industrial plant that may or may not be affected. The current yield of rates from manufacturing industry is somewhere in the region of £80 million to £100 million annually. It has been suggested, if a certain interpretation of this Bill is correct, that this could be doubled or trebled in terms of the rates bill for certain forms of manufacturing industry. This is by virtue of the fact that certain equipment such as furnaces, boilers and ovens will now be rateable. Some people in the pharmaceutical industry and the buildings and materials industry have approached me in my role as chairman of the Small Businesses Committee about this matter.
I would like to know if this is correct because this would cause acute cash flow difficulties for small firms. There are current difficulties with AIB financing and so on as of July of this year but it must be said that a lot of small companies are operating on a hand to mouth basis. They are getting longer periods in terms of the credit restrictions that are being asked for by their customers in the trade and this all leads to a very difficult problem as well as high interest rates. I know of one firm in my own constituency. He has three garages and his PLV increased threefold. The difficulty is that there may be almost arbitrary increases of the PLV at the behest of the local authority and it is quite a technical matter for the entrepreneur then to go to an auctioneer to take up a detailed appeal. Obviously the smaller the business the less resources they have to deploy such personnel. This is being perceived as discrimination against manufacturing industry, if the interpretation is as they say it is. We must be mindful of the competitive position of manufacturing industry. The State recognises its role through IDA aid, CTT aid and many other forms of ancilliary aid. Perhaps some of the good work could be undone if these fears are realised.
I would ask the Minister to clarify exactly what the material financial effect of this Bill would be, whether it is a full retention of the status quo prior to the High Court decision or whether it will amount to a doubling or trebling of the rates bill. It is in the Minister's own interest to clarify the allegation that 16,000 jobs would be lost, which I am sure is incorrect.
This is a matter of serious concern, as Deputy Yates has said. It is of concern to CII, who are the spokesmen for Irish industry and, apart from their concern, we have had enough examples this year of ill-considered Government action through the Minister for Finance in regard to bringing in disincentive measures that have impeded growth of employment in industry. We had it in the doubling of the VAT rate on the construction industry. I see here a similar type attitude in these proposals in the Valuation Bill. When you examine them they are concerned with movable plant. Traditionally the whole valuation and rating system was related to fixed assets, to buildings and affixations to buildings, plant directly involved in a building or attached in a permanent way to the building. That is how the system operated over the years. The concern here is precisely as Deputy Yates said: that a whole area of movable plant will be incorporated by legislation into the rateable assessment for valuation purposes. It is of particular concern to the chemical area and to the processing area, particularly the food processing area, where there is a high storage element, where there is a high element of movable machinery. All these industries that are subjected to changes in terms of improvement of productivity are now going to be in a situation where even run-down plant they may wish to change would be subjected to valuation and to rates arising out of that valuation. The danger is that it will act as a penal clause for taxation purposes and a disincentive to industries which require to change their production processes. This is a very serious matter. If, in order to increase productivity industries acquire improved machinery at a higher cost they will be subject to a higher valuation and a penal collection of rates.
We have had too many examples in recent times of measures being brought in here that at first glance may seem to have some justification. However an indepth examination of such legislation reveals the extent of the disincentives. Is any tax measure which will operate as a direct disincentive and a bar to investment worth it in relation to the revenue raised? Has a sufficient study been carried out by the Minister for Finance and the Revenue Commissioners in regard to the balancing effect of the revenue raised from a valuation tax on moveable plant as against the disincentive to improve plant? Moveable plant has always been regarded as a flexible asset.
I know the Minister may say that in practice such plant has been taxed to some degree over the years. If a firm has such plant the overall context is taken into account and the valuation is fixed on the overall value of the premises and the production unit as a whole. That has been the pragmatic approach of the valuation commissioners over the years. That is very different from writing a clause into law stating that from now on such plant is subject to valuation and, by reason of that, subject to commercial rates. That represents a precedent which will act as a disincentive to industry and employment. I should like to hear the Minister's view on that. I hope he will allay our fears because they are genuinely expressed.
Over the years if the Valuation Office in assessing the valuation of a premises see such plant in a firm they have taken the overall context into account and made a valuation accordingly. Now, however, moveable plant will be liable to valuation and to rates. I wonder if the Valuation Office, the Revenue Commissioners or the Minister have taken into account the disincentive involved in introducing a measure of this kind into law for the first time.
I join with previous speakers in expressing concern at the possible effects of this Bill. I hope the Minister will be able to clarify a number of issues which have arisen and which, in essence, must give the House cause for concern about the possible repressive effects on manufacturing industry of a measure which, if interpreted in its widest form, could leave the manufacturing sector open to a substantial increase in taxation.
When introducing the measure the Minister referred to the Bill as being a technical measure to rectify difficulties which arose in the interpretation of the existing legislation. That would tend to allay fears and anxieties, but a closer reading of the explanatory memorandum shows that the Bill has two objectives. One is to bring within the ambit of rating industrial plant deemed rateable prior to a recent court decision and secondly to provide for rating of other property not specifically referred to in existing legislation. I am not quite sure how the description of the Bill as being a technical one rectifying some difficulties which arose in the interpretation of existing legislation squares with the second provision. Perhaps the Minister might comment on that. Both objectives can be said to seek to extend the base of the valuation system to the detriment or relative impoverishment of the manufacturing sector.
The sooner we have a major review of the taxation system rather than piecemeal reforms the better. It is somewhat incongruous that plant which may now be deemed to be rateable legally may be plant which was grant-aided by the IDA some years ago. I am not sure how that squares with the general thrust of Government policy which is to try to stimulate manufacturing industry and encourage enterprise and entrepreneurial skills.
There are a variety of assessments of the net effect of this measure on the manufacturing sector but some estimates, admittedly from representatives of business organisations who have proven in the past that their assessments are as accurate as anyone else's, show that in some cases the tax levy is likely to be increased by 100 per cent or 200 per cent. If, for example, the amount of money which might now be additionally expected from the sector could be said to be of the order of £100 million, obviously the deficit in the working capital of businesses would be substantial. I am sure the Minister has given that some consideration. I accept that it is difficult to try to square the circle, but we must be extremely reluctant to place any disincentive on any employment sustaining sector which already feels that there is a little light at the end of the tunnel. Anything that puts greater difficulty in their way must be carefully thought through.
The effects of the Bill clearly discriminate against one segment of the economic infrastructure and there might be grounds for challenging this on constitutional grounds. I wonder if the Minister and his advisers have borne this in mind. I do not know if it is a valid fear, but it would not be the first time that such an approach was deemed to be appropriate. Is the Bill essential? If it is, what safeguards does the Minister suggest would be reasonable to ensure there will not be very substantial taxation above and beyond what he and the House might regard as reasonable and appropriate which would place a heavy burden on people who are already heavily burdened by taxation and who are manfully trying to sustain employment in these difficult times? The manufacturing base is restricted enough already and I hope this Bill will not place a further constriction on it.
However, the sounds emanating from the business community are untypically shrill and strident and in some cases alarmist. Knowing some of the people involved I am aware that they are not usually given to such reaction. I urge that we proceed cautiously in this area and that the fears and anxieties that have been expressed by representatives of the business interests involved and which have been expressed in this House also will be given careful and respectable scrutiny by the Minister. Perhaps the Minister would comment as far as is possible on the points that have been raised.
Those Deputies who have contributed to the debate have drawn attention to a number of aspects of the Bill in respect of which, reasonably I think, they would like some further examination. Attention has been drawn also to a number of points made about the Bill by people outside the House.
I should like to deal first with some of the other comments made by the Deputies and which have not been echoed outside the House. Though it may have been a slip of the tongue, Deputy Keating used a very good word to describe some of those comments when he referred to then as alarmist. My definition of an alarmist is someone who provokes alarm when there is no need for it.
As I said when introducing the Bill, its purpose is not to extend the list of Noonan (Limerick West)"properties to be valued and rated but to preserve the traditional valuation base. Members of the House who are also members of local authorities should bear in mind the very real difficulties of local authorities in ensuring an adequate flow of revenue from their own resources and from resources available to them.
The reason for the Bill in the first place is to ensure that the rateable base for local authorities remains as it has up to now always been intended to be and that we recover some of the ground lost to local authorities in terms of their revenue base following a number of court decisions. It is not for me to criticise the courts but the local authorities have lost ground as a result of a number of court decisions which did not fit in with the intentions of the legislators. I realise I am on dangerous ground in referring to the courts in this way but I make the remark in all deference to them. We are here this evening to adjust the legislation so that it becomes clear to the courts and so that the kind of difficulty I have referred to can be avoided in the future.
I wish to emphasise the point that our purpose in this Bill is not to extend the valuation base but to put beyond a number of matters that have become the subject of challenge in the courts and to restore the valuation base to the level that was intended in the legislation.
A number of Deputies said that in their view valuation law in general is outdated and outmoded and they reminded the House that this law dates from the middle of the 19th century. I have a certain amount of sympathy with that view. Our valuation law is not perfect. Much has changed since the basic principles of valuation law were enacted and that is one of the reasons for this Bill. The Bill clarifies the meanings of plant and machinery as those terms are understood in the 20th century and puts on a firm legal basis the traditional practice of setting new valuations by reference to the valuation of comparable properties already valued. I am in accord with the views expressed by a number of Deputies who contributed to the debate in their regarding this Bill as a first step in a more general review of valuation law, a matter that is being examined in my Department in consultation with the Commissioner of Valuation. Deputies continued from there to ask why we should have this Bill when what is needed is a more fundamental review of valuation law. That is a fair question and the fairest answer I can give to it is that we should see the Bill for what it is, one that remedies and preserves the present valuation base so that we may at least undertake our review of valuation law in the knowledge that our local authorities basically have at their disposal the kind of revenue base the legislators designed for them. This does not in any way tie our hands or remove any options in terms of a more fundamental review of valuation law. It stabilises the law as it was intended to be without expanding the base and it gives more certainty to the law.
A number of Deputies commented that a revaluation of all the property in the State is needed and various suggestions were offered as to how we might go about that task. I would not disagree. The present valuation law is more than 130 years old but I must make the point that there are more than one million rateable hereditaments in the country and the process of revaluing them would involve considerable time even if we were to effect a significant increase in the staff of the Valuation Office.
We can only make a guesstimate of the cost of a complete revaluation but it would be in the region of £10 million to £15 million. Having regard to the length of time this would require and to the total cost involved, it is not something we would embark on lightly. One can think of a couple of committees of the House who might have the odd remark to make about that kind of money being expended over such a period of time.
We would not mind if it was done efficiently.
I recognise fully Deputy Keating's concern with efficiency. I think he appreciates that he has no more ardent supporter than myself in his concern in that regard but the gentlemen on the opposite side of the House do not seem to be too keen on efficiency in public expenditure. However, that may be a matter for another evening's debate.
Deputies Wilson and Skelly welcomed the news that we are proceeding to provide specifically for the valuation of car parks. Though that kind of property is not mentioned specifically it is covered within the terms of item 2 in the Schedule to section 3. Deputy Wilson asked for clarification as to how the tone of the valuation list operates. He was speaking of Dublin and Dublin was revalued early in this century.
The primary valuation Act, that is the Valuation (Ireland) Act, 1952, prescribed that the valuation of buildings be based on an estimate of the net annual letting value and that formed the basis for the valuations fixed originally. With the passing of time letting values increased sharply and it was apparent within 40 years of the primary valuation that valuations could not be determined strictly by reference to annual letting values. Therefore, a process began of setting valuations at a level lower than the letting values but doing so in a consistent manner so that the valuation of one building compared with that of another would bear a relationship similar to that between their respective letting values. That process is what we call maintaining the tone of the valuation list and helps to maintain a uniform valuation throughout the country as required by the 1852 Act.
In connection with this point Deputy Taylor compared the way in which the valuation system operates here and in the United Kingdom. As he pointed out, there are regular revaluations in the United Kingdom with the result that, in many cases, valuations correspond to letting values. On the other hand, I would have to make the point that, as a result of regular revaluations, valuations in the United Kingdom are generally much higher than they are here while on the other hand their rate poundages are much lower. Of course, in a general sense one balances out the other. If one increases the valuation the poundages will go down and the net result is the same. In general the true factors will tend to balance one another out although it is difficult to predict what, if any, would be the net revenue change resulting from an overall revaluation here. In principle it should give the same result. It might give a slightly different distribution but, in principle, the result should be broadly the same even for a given category of buildings.
Deputy Taylor also mentioned in passing some feelings he had about the system of raising local revenues. I intend to mention this briefly only because I do not think it is germane to the thrust of this Bill. He seemed to ask why — since there are local income taxes and local sales taxes in the United States and, he thought, in other countries in Europe — we could not have them here since they seem to operate reasonably well particularly in parts of the United States. I would remind Deputy Taylor simply that in many of the states of which he speaks in the United States, and indeed in a number of cities where there are local sales taxes and income taxes, one is talking about a total taxpaying population that is, in some cases, several times greater than the total population of this country. Therefore, in terms of taxation policy, it is not relevant to draw a direct comparision between what may be our situation here and what happens in the United States.
Deputy Skelly raised the question of the valuation of ponds and reservoirs listed in the Schedule to section 8 of the Bill. The ponds and reservoirs he mentioned are of an industrial nature. They had always been valued and rated until their valuations were called into question by some recent court decisions. This Bill will give explicit power to value and rate them. It will put beyond doubt the situation that obtained previously in which they were valued and rated and which was set aside by some court decisions. The clear intention of the legislator in framing the legislation was that they should be so valued and rated. I intend to put that beyond doubt in this Bill, not to expand the definition but simply to ensure that what was intended actually comes about. Of course we are not speaking here of ornamental or amenity ponds; they are never valued or rated unless they significantly enhance the value of a property and, even then, their valuations would be extremely small. I mention that only because Deputy Skelly spoke of his recollections of fishing and swimming in the ponds associated with the Killeen Paper Mill. Indeed I remember myself engaging in some similar activities and hopping across stepping stones in the ponds of another defunct paper mill in Drimnagh which Deputy Keating will remember also.
Deputy Skelly also adverted to the fact that the Bill makes no mention of an appeal mechanism. It is true, it does not. There is no need to provide specifically for appeals as the properties covered by this Bill, in common with all other property liable to valuation, are subject to the appeals procedure laid down in the Valuation (Ireland) Act of 1852. Therefore, there is no need in this Bill to provide for an appeals procedure. The appeals procedure already exists.
Deputy Skelly also sought information on the rate revenue from commercial property and the benefits that accrue from commercial enterprises in return for that contribution. Rates revenue in the aggregate from such property in 1984 was £121.5 million, in 1983 it was £104.1 million. It would require a great deal of investigation to estimate what return those ratepayers get for the contribution they make. It is clear that all such commercial and industrial enterprises benefit, along with the rest of the community, from the entire range of services made available by local authorities to the community at large. To break that down into individual enterprises would be a very difficult job indeed. It is a part of the base from which the expenditures of local authorities, on the services they provide, is financed. I do not think it could be claimed that the value of the benefits received was not in proportion to the level of the rates paid. Deputy Skelly went on to seek confirmation of the percentage of local authority revenue derived from rates. Specifically he asked if it was true that that percentage had fallen from 34 per cent in 1965 to 16 per cent in 1981. Those figures are correct. The basic reason for the fall in percentage was the decision to transfer liability for rates on domestic property to the Exchequer, a move which was undertaken, as we all remember, in 1978.
Deputy Skelly mentioned also — and it has been taken up by other Deputies — provisions in the Bill for the Minister carrying out certain things by way of making orders. In this respect I might quote from the Official Report of 21 May last, at column 1650 when Deputy Skelly had this to say:
Nothing happens, of course, if the Minister makes an order. While it is often necessary for the Minister to be able to make orders, sometimes he can be given a power of which we will not know the effect until later on.
I must say I can understand Deputy Skelly's hesitation and that of others were they to read the provisions of the Bill in that way. I might draw the attention of the House to section 3 (4) which sets out the procedure we have in mind and which reads:
Whenever an order is proposed to be made under this section, a draft of the order shall be laid before each House of the Oireachtas and the order shall not be made until a resolution approving of the draft has been passed by each such House.
What we have done there is to provide for the making of and affirmative confirmation of orders. Of course, there is another procedure which we could have used, that is the procedure under which an order is laid before the House and becomes valid if not opposed within 21 days. But we deliberately chose the affirmative order because that requires an active decision of the House, an active examination of the text of the order and a debate in the House before it can be passed. In that way Deputies and the House in general can be assured that nothing will be slipped through on them. Indeed Deputy Skelly took me to task somewhat for, as he seemed to think, trying to slip the Bill through on the nod in the House. I pointed out to him — and I noticed that my sotto voce was picked up in the report — that the Bill had been circulated since the middle of March. Whatever else I might be accused of in bringing this Bill before the House, certainly I cannot be accused of rushing it through. These has been plenty of time for consideration and examination of it. The essential point I want to make is that any orders that will be made under the provisions of this Bill have to be positively affirmed by the House and, therefore, will receive full and proper examination.
Deputy O'Kennedy suggested that the annual revision of domestic property, which is a statutory function of the Commissioner of Valuation, should cease since such property is no longer rated. I am afraid I cannot agree with that. The process of revising the valuations of domestic property, when material changes are effected to their structures, is a very important function notwithstanding the fact that rates are no longer levied on the occupiers. These valuations have been established over a long number of years and form an important source of basic information on property for commercial and official purposes. They would quickly get out of date if they were not revised and that would set at nought the entire work of the valuations in this area. It would be rather foolhardy to destroy such an extensive data base.
Deputy O'Kennedy then suggested that industrial plant and machinery are for the first time to be rateable under this Bill. Industrial plant has always been valued and rated in accordance with the Valuation Acts. Machinery has always been excluded by those same Acts from valuation and rating. That will continue to be the case under the provisions of this Bill. That is clear both from the Bill and the explanatory memorandum. Movable machinery is not covered, it is not rateable and will not be valued under this Bill. Nothing in this Bill brings in a new category of valuation base that would affect industry in the way in which Deputy Lenihan was afraid it might.
The problem this Bill seeks to rectify has been caused by certain court decisions taken within the framework of the Valuation Acts as they have been up to now. The courts have ruled in some instances that when a mechanical element is associated with a piece of plant the whole element becomes a machine and is therefore exempt from valuing and rating. This Bill provides that only the plant element will be valued and, far from extending the valuation base or bringing new elements in, this Bill merely restores the status quo prior to those court decisions.
Deputy O'Kennedy was concerned also at how what we call the tone of the list operates. I will correct a misapprehension on his part. We are taking advantage of this Bill to put on a legal base a long-standing traditional practice. Deputy O'Kennedy was correct in that new valuations are made by reference to the valuation of properties already valued, but with the important qualification that such properties are comparable. The tone of the list takes account not only of the rental value but of the condition of the property and the purpose for which it is used. It is therefore incorrect of Deputy O'Kennedy to infer that, if two properties had rental valuations of £20,000 and £10,000 respectively, their valuations must be set in a ratio of two to one. There are other factors that have to be taken into account in fixing the valuation and one could not draw that conclusion automatically from that kind of comparision. The valuation which would be set would reflect the respective uses of the buildings, the condition of the buildings and the location.
Deputy O'Kennedy seems to have some hesitation about giving statutory effect to this long-standing practice. I do not understand his fears. Short of a complete revision of valuation law, valuation must be set by reference to rental values and taking account of inflation. The only equitable way of setting valuations is by the adoption of the tone of the list system which allows us to take account of the various factors that enter into our consideration of the valuation. Putting the system on a statutory basis does not fundamentally change anything in the way that the valuations are carried out.
I will come to a number of points made by Deputy Yates and repeated to some extent by Deputy Keating. I wish to deal more comprehensively with some of the remarks lately made by the Confederation of Irish Industry. Deputy Yates raised the question of some misunderstandings about items of industrial plant which I hope I have cleared up. It is clear from what I said that there is no question of this Bill doubling or trebling the rates bill. Both Deputy Keating and Deputy Yates spoke of discrimination against manufacturing industry. That is not really an appropriate term in the context of the discussion we are having. If there is any discrimination it is in favour of domestic property by taking out of the base on which local authorities can get their revenue. In the charging of rates there is no specific and no unconstitutional discrimination against manufacturing industry.
Deputy Lenihan asked if movable plant is now being excluded. It is not. The Bill does not apply to movable plant. It refers to fixtures which have always been a category liable to valuation for rates. It is very clear in the Bill. Deputy Keating suggested that it is anomalous to put rates on plant which might a very short time previously have been grant-aided by the IDA. It is not. As Deputy Keating would remember, in many cases where the IDA assist in an industrial enterprise there is a remission of rates for a period. It is not at all anomalous, once assistance has been given to set up an enterprise, that after a period it begins to make its own contribution towards the funding of the services provided for the local community and by industry in the area. One might just as well argue that it is anomalous to tax anybody getting any kind of benefit from the State. There is not an anomaly in having a taxation system that requires contributions from people without necessarily taking account of the various ways in which the State or the community helps those individuals or firms with a certain purpose in mind.
Deputy Keating asked, if the Bill is really necessary, what safeguards can we have against the possibility of an unreasonable burden of taxation. The best safeguard is a responsible and measured approach by local authorities towards raising local revenue. Deputy Keating knows perfectly well that it is not within my compass, although I wish sometimes it were, to give him that kind of guarantee. What we are providing for in this Bill——
(Interruptions.)
I know that Deputy Keating is about to have a go at me for making this remark, but Deputy Keating is a very responsible member of a very responsible local authority — although it would be interesting to see how they carry out the job of raising their own revenue over the next few years.
(Interruptions.)
It is not a function of this Bill to restrict either the requirement of local authorities for revenue or their exercise of the powers given them to raise revenue. The function of this Bill is to ensure that the base on which they raise local revenue is what the legislator intended it to be and to take out the difficulties that have been created as a result of a number of court cases which have effectively set aside some of the provisions that have been in the legislation up to now.
Finally, I come to some of the points raised by a number of people outside the House which have been raised legitimately by Deputies in here this evening. It has been contended that the Bill could result in a substantial extension of rating with extra costs for manufacturing industry. It has been claimed, for example, that one of the results of the Bill could be a doubling of existing rates charges of £80 million a year. That is not the case. As I said, we are restoring the status quo to where it was before a number of court decisions were taken. We are clarifying the valuation base, not extending it, not providing for any new categories of rateable hereditament to be brought in.
The Minister is restoring a restrictive situation.
No, I am not restoring a restrictive situation. I am restoring a situation that was there in the legislator's mind since 1852. I am restoring a situation which Deputy Lenihan and his colleagues were happy to live with while they were in Government.
The Minister is not making a political point——
No, I am not making a political point. That is a statement of fact.
He is restoring a restrictive situation.
I did not hear them worrying too much about whether the valuation base as it applies to commercial and industrial property was excessively restrictive or the contrary, whichever way Deputy Lenihan wishes to express it. I have here a number of letters which I had the honour of receiving from the CII dealing with certain aspects of the fears of the CII about this. In relation to some of the comments made, I have to make the following points. First, the valuation placed on plant such as provided for in this Bill does not necessarily reflect the cost of that plant in relation to total invesment in the enterprise as a whole, so that exercises that have been done identifying the proportion of investment cost made up of plant and buildings and other assets which go into it have no bearing whatever on the valuation of buildings or on the relative valuation of different kinds of buildings or of different plants owned by different firms in the same business. Therefore, I am afraid a number of gentlemen have given themselves a great deal of work for no good reason because to make that comparison is not relevant. Secondly, plant is already valued and rated in the majority of cases. The ones which escape at the moment are those in respect of which court actions have been taken on the interpretation of section 7 of the 1860 Act. Therefore, there is no question here of a vast array of a huge amount of plant waiting to be pounced on once the Bill is passed. There are cases where plant which was previously rated has had its valuation reduced or eliminated because of these court decisions and the effect of this Bill will be to restore the valuation, of course taking account of the process of appeal that is already in existence.
Plant is a higher factor than it used to be.
To speak of doubling or trebling the bill is absolutely out of the question. We are certainly not going to do anything of that kind, and to speak of there being any great danger to small, large or medium sized industries is totally outside the scope of this Bill. It does not arise. The cases in which an increase will arise are those where plant has been reduced in valuation or devalued — if I may coin a phrase — as a result of a specific very small number of court cases.
There is a grey area.
Plant which has already been valued and rated will continue to be valued and rated. Some plant which was taken out of the valuation and rating system as a result of court decisions will now come back in. That is what the Bill intends to do.
That is adding to the cost.
It is nothing like the kind of scale that has been claimed by Deputy Lenihan and some of his colleagues or by the CII. I repeat — because there is none so blind as he who will not see and probably none so deaf as he who will not hear — that the function of this Bill is to regularise the position, to restore the status quo to what it was before those court decisions were made. It is not a Bill which goes out to extend substantially the valuation base, and Deputy Lenihan would do better to read the text of the Bill with some attention before he starts bandying around big words like “bureaucratic”. He would also do well to bear in mind the state of a number of local authorities who have been left short——
"Bureaucratic" is not a very big word. We all understand it.
——of an amount of revenue as a result of these court decisions. Bravo, and I congratulate the Deputy.
The court decisions to which I have referred have given a very broad interpretation to the word "machinery", the developing trend there being to regard any structures and other installations associated with the manufacturing process as machinery and hence not rateable. I am not trying to extend the valuation base but I am providing a measure that will prevent an extension of the meaning of "machinery" leading to a gradual erosion of a substantial part of the valuation base, so that the only industries or firms which will face extra costs in the future are those which succeeded in having their valuations reduced as a result of court decisions to which I have referred.
It has got to the point where it is alleged, for example, that section 8 of the Bill could be deemed to include not only ovens and boilers but also silos, storage tanks and most of the equipment used in processing industries such as the chemical industry or the dairy industry. It is also alleged that the section could be deemed to cover all conveyor belts or transfer lines which take a product from one machine to another within a factory. Even a brief reading of section 8 and of the Bill will show that that is not the case and a brief reference to the Schedules of the Bill will show again that that is not the case. I refer those who have written this not just to section 8 but to section 7 (3) of the Bill also. Also it is asked if an electric motor is attached to a piece of plant such as a silo or grain dryer in order to drive a fan or a pump, whether the entire piece of plant would be exempted because a motor is attached. It would not. The motor would not be rated; the plant would be rated. That is the clear intent of the legislation as it is up to now.
Finally, the interests outside the House down in Kildare Street are concerned that sections 3 (2) and 8 (2) give the Minister authority to introduce additional Schedules by order and it is suggested that, in view of the potentially very wide-ranging implications of the extension of such powers, certain persons would wish to have any extension of powers made by means of a Bill presented for formal discussion by the Oireachtas. I must say that it is not for us in this House to be told how to conduct our business by people outside the House, particularly since the provision in the Bill for the use of orders requires affirmative confirmation of those orders by the House. They are orders which have to be brought into the House——
I have agreed with the Minister on better points than that.
——and require a motion of approval in the House so that Members of the House and of the other House of the Oireachtas will have every opportunity to examine in proper depth and to tease out to the extent they feel necessary any orders which I or my successor would choose to make or feel moved to make under the terms of this Bill. I hope that answers the main points made during the course of the debate. We will have a further opportunity on Committee Stage to go into some of these things in more detail and I will be very happy to do so.
Question put and agreed to.
Can the Minister indicate when Committee Stage will be taken?
We will take Committee Stage next Tuesday, subject to agreement between the Whips.
Is that agreed?
Agreed.
Committee Stage ordered for Tuesday, 9 July, 1985.