I welcome these regulations. I know it was intended to introduce them a long time ago. As the second last Minister for Industry and Commerce I have a certain familiarity with them. I realise it is very important to the societies concerned to have their limits raised. The societies were virtually in a state of suspended animation because they could not function at the old limits. It is regrettable that it has taken so long for the administrative machine to introduce these regulations. However, I compliment the Minister on doing so at this time.
I suggest to the Minister that he might consider amending the legislation to provide that the limits shall be calculable on the basis of a formula relating to the CPI which would be automatically raised each year on the basis of a statement published by the Minister in, say, Iris Oifigiúil. In that way they would be raised in line with this year's base by 3 per cent this time next year, presuming that is the rate of inflation. Obviously we could not use different levels of inflation, for example, one person quoting the ESRI and another person quoting the CPI. Somebody would need to say what rate of inflation is being used and the obvious person to do that is the Minister for Industry and Commerce of the day. I suggest that might be one way of dealing with the matter. I realise that would require amendment of the Principal Act which is not what we are dealing with now but I ask the Minister to consider asking his officials to look at this matter.
I know there is an immense amount of resistance to the idea of automatic indexation. I recollect this being discussed in regard to limits for fines when we were in Government. There are some offences in respect of which the overall limit for fines has not been altered since the 1870s. I have suggested on a number of occasions that they should be automatically recalculated each year in line with the movements of the CPI. This would mean the date on which they were first set or, if they were set anew, there would be such a formula operating from the date on which they were set anew.
There has been a considerable amount of resistance to this from a variety of quarters, possibly because of a fear that there will be a lack of precision at any given time by any given judge sitting in any given court as to what were the limits on that day. One can hardly expect judges to have to take out calculators and work out the consumer price index since the last maxima were set. The solution would be the publication of a statement each year by the Minister for Industry and Commerce in Iris Oifigiúil which could be referred to by judges and other people in this area. This would maintain the sense and purpose of the original decision of the Oireachtas. Perhaps the Minister could consider that suggestion and discuss it with some of his colleagues.
Another rather more serious matter which concerns me is the supervision of these societies. This concern extends to credit unions. I am sure the Minister is aware of the credit union advisory committee and their work. I had some contact with them, particularly when in office, but also out of office. I know they are very concerned about the level of supervision of credit unions. They are worried that, at some time in the unforeseeable future, there might be a collapse of a credit union which could do immense damage to the whole movement and reflect on well known credit unions in a most unfortunate fashion.
I note that, under these regulations, we are, for instance, deciding that the specially authorised loan societies should have supervisory committees. I imagine that the same people who are supposed to be overseeing the credit unions will have to oversee whether or not this requirement is properly complied with or operated. I note also that the regulations will now provide that all friendly societies will have to have proper accounting and auditing procedures. Again, the question arises: who will enforce that requirement? Presumably, it will be the same people who are already overworked, understaffed and unable to deal fully and adequately with their responsibilities with regard to credit unions.
I appreciate that the Minister, in fighting for more staff — and I speak from experience here — for this section is having to base his case on what might happen if he does not do what is sought. If he does get the extra staff there is one thing certain: he will get absolutely no credit for having done so. Nobody will thank the Minister for having got extra staff for some supervisory body simply to avoid an accident that never occurs. Because, until an accident actually happens, nobody will appreciate the need for extra staff. Probably people do appreciate the need for staff, for instance, at present in the area of insurance supervision where there have been two very serious collapses of insurance companies. Whether or not these collapses could have been foreseen or avoided by even more rigorous supervision than has applied to date is difficult to ascertain. One would accept that they certainly made the case for a substantial amount of supervision and overseeing by the Department.
That raises the question of who is to pay for better supervision. It appears to me that in the first place supervision, whether for credit unions or insurance companies, is in the interests of the entities themselves and, in the second, in the interests of the community as represented by the Minister. If there is to be extra funding provided I would contend the first call should be on the societies who are being supervised, that they should be asked to pay some form of levy to provide for a better system of, if you like, supervision or quality insurance in regard to the product they are selling and that, in the second instance, obviously — as there is also a public interest involved — the Ministers for Industry and Commerce and Finance should put up some of the money.
I recollect raising this question when I was in office. I am not too sure how far I pursued it, probably not very far, for a variety of reasons, there being many other things on my plate at the time. As far as I can remember it was argued that there would be some impropriety involved in the Department of Industry and Commerce financing their supervisory operations by imposing a levy on the people who will be supervised, that in some fashion this might interfere with the arms length relationship that should exist between the supervisor and the supervised. On reflection I do not accept that argument. I would ask the Minister if he would, first, acknowledge that his Department are short of staff for supervision in this area and, if he does, would he agree that a levy to finance additional staff — perhaps on a £ for £ basis, for every £ subscribed by those being supervised, the Department would put up £1 extra — would constitute a good investment in ensuring that the valuable service provided to society by the friendly societies, by the credit unions and all these other voluntary organisations in the financial area, would be underpinned by a better system of quality insurance. I ask the Minister to examine that. However, these are all, if you like, points on the side. The main issue is the approval of these regulations with which I heartily concur.
