The House will now hear two minute statements on matters appropriate to the Minister for Finance. I propose to call on the Deputies I have selected in the following order: Deputy Reynolds, Deputy Cotter in respect of two matters, Deputy Nealon and Deputy Finucane. Each Deputy is entitled to two minutes in respect of each matter and each of the statements will be followed immediately by a two minute reply by the Minister or the Minister of State at the Department of Finance.
Adjournment Debate. - Finance Matters.
Thank you, a Cheann Comhairle, for allowing me to raise this issue. As regards the recent legislative provision pertaining to publicans, I must state from the outset that it is the most ill-conceived and ill-thought-out sections of the Finance Bill. This is causing problems around the country. A number of my constituents have found great difficulty in having their tax assessed in order to renew their licences. At present publicans are in purgatory in that they do not know whether they will be allowed to continue in business. The local tax office in Sligo has been very helpful to these people but the publicans are unable to get tax clearance in time to have their licences renewed.
The Minister should take into consideration that this country was built on small family-run businesses. In some cases publicans also run grocery stores and hardware shops but they are discriminated against in that they need a tax clearance certificate in order to get a licence for the pub. Otherwise the pub is closed down. This is a retrograde step at a time when 300,000 people are unemployed and we are trying to create jobs. Business people, particularly publicans, are in a quandary and the problem should be tackled in the second Finance Bill which the Taoiseach has said will come before the House in November. I am not saying that people should not pay their taxes but they have not been given sufficient time to have matters clarified. The Minister should rescind this tax to enable people to be given at least a year to get their tax affairs up to date.
Tax clearance procedures have been in operation for public contracts and grants since June 1986 and March 1988, respectively. The basic aim of the scheme is to ensure that persons or groups who benefit from public funds must first produce evidence that their tax affairs are in order. This evidence normally comes in the form of a tax clearance certificate issued by the Revenue Commissioners.
In the last budget, the Minister announced that the Finance Bill would contain provisions to enable me to extend tax clearance to licences such as those for pubs, dance halls, employment agencies, bookmakers and so on. It was decided to concentrate initially on liquor licences issued by the Revenue Commissioners. Accordingly, the Finance Act, 1992, provides for the presentation of a tax clearance certificate before an intoxicating liquor retailer's licence may be granted by the Revenue Commissioners.
The licences concerned relate to the sale of spirits, wines, beers, etc., by pubs, off-licences, supermarkets, hotels, theatres and restaurants, and were due for annual renewal on 1 October. The Minister for Finance and I have been contacted by representatives of the publicans and arranged that they meet the Revenue Commissioners to discuss any concerns which they may have with the tax clearance requirements.
The Revenue Commissioners have informed us that the response from publicans and other intoxicating liquor licence holders to date has been very satisfactory. The Revenue Commissioners have made suitable arrangements to ensure that the minority of applicants for tax clearance, whose tax affairs are in arrears, will not be adversely affected should they require some time to bring their tax affairs up to date.
A special section has been established in the Office of the Collector-General to deal with licence holders who have difficulty in immediately discharging their accrued tax liability. An open approach is being taken. Traders are being given time to put their affairs in order without undermining the viability of their businesses. As part of this approach agreements are being entered into, where appropriate, for the discharge of arrears by instalments. Once an acceptable agreement is reached for the payment of the arrears a tax clearance certificate is issued. The commissioners are confident at this stage that the number of applicants who cannot satisfactorily arrange to discharge their liabilities and obtain a tax clearance certificate will be relatively small.
The processing of applications will take several weeks. No action will be taken against licencees who are still in the process of sorting out their tax affairs, but those who do not apply for tax clearance or who are refused a tax clearance certificate run the risk of penalties for illegal trading.
It is important to point out that the tax clearance requirement does not impose any additional charge or tax on applicants. Neither should it lead to any extra administrative workload if applicants have their tax affairs in order. Its sole purpose is to ensure that those in receipt of these licences have discharged their tax liabilities.
To sum up, the operation of this scheme seems to be progressing smoothly. Most applicants have encountered no difficulty in obtaining tax clearance. An open, sympathetic approach is being taken with the others, most of whom will reach acceptable agreement with Revenue. These arrangements will cater for all except a relatively few `hard' cases.
This extension of tax clearance to applicants for liquor licences has been a considerable success and the Minister for Finance sees no reason to rescind it.
I now call on Deputy Cotter to make his two minute statement.
I want to draw the Minister's attention to the dissatisfaction felt by customs officers at the relocation policy which has resulted in officers meeting their fellow workers travelling in opposite directions to work each morning. I strongly protest at the way the Minister's relocation policy is working. I know he had the best intentions in this regard but it is not working out the way he had hoped. For example, an officer living near Dundalk was appointed to the mobile control based in Castleblayney while, at the same time, officers from Castleblayney, who live in the area, will end up travelling to work in Dundalk each day. I know the staff in Castleblayney and it is insulting to suggest that none of them was suitable for the local position.
I request the Minister to fully investigate the appointments with a view to rectifying the situation in favour of justice and fair play. I look forward to the Minister's response.
The rules regarding the rates of exchange used in determining the customs value of imported goods are governed by EC regulations. In reports issued in November 1990 and February 1991 the Revenue Commissioners indicated that a potential surplus of approximately 600 Customs and Excise staff would arise as a consequence of the planned completion of the Single European Market on 1 January 1993 and in particular the elimination of fiscal frontier controls between member states.
Since the issue of these reports the commissioners have been working on proposals aimed at reducing the surplus staff figure. The commissioners issued a revised report in July 1992 which showed a net potential surplus of approximately 60 staff. The reduction in the surplus figure has been possible because of Government decisions to give Revenue responsibility for the collection of EC trade statistics and the new VAT information exchange system post-1992 and for the administration of the new motor vehicle registration tax. This new work will provide substantial employment opportunities for Customs and Excise staff, the details of which were made available to staff last July.
The revised report also identifies the commissioners' staffing requirements for the expansion of some existing functions of the Customs and Excise service, especially the strengthening of the common external border, increased control of drugs and other illicit traffic, improved Common Agricultural Policy control and post-importation audit work.
Furthermore, as the Minister for Finance stated in his budget speech, the commissioners intend to redeploy surplus Customs and Excise staff to other areas of Revenue work, particularly work related to the continued drive for better collection and enforcement of taxes and detection of evasion and avoidance.
The reorganisation of the Customs and Excise structures and staffing levels to cater for the post-1992 environment is well underway. The commissioners have made every effort to distribute the new and expanded work in a manner which will provide productive work for surplus staff at particular locations. In the assignment of staff, priority will be given to staff serving in the locations in which posts have been made available. A prime objective of this restructuring is to avoid domestic upheaval of staff if at all possible.
Staff will be notified this week of the provisional outcome of assignments within the reorganised Customs and Excise structure. Staff will also be informed that an ongoing process will continue to identify employment opportunities in or close to their present locations for the remaining surplus staff numbers.
The Revenue Commissioners are not at present aware of any situations in which officers are meeting their fellow workers travelling in the opposite direction to do similar work. The commissioners have made it clear from the outset that human and domestic factors will be kept to the forefront and following the publication of the new assignments they will be available to answer any questions and to give any assistance they can in bringing about a satisfactory conclusion for all concerned.
I call on Deputy Cotter to make his two minute statement on another matter.
The matter I wish to draw to the Minister's attention is the huge cost to importers of goods from the UK by the imposition of a fixed exchange rate of sterling £1.0239 against the punt for the purpose of calculating VAT at point of entry during the month of October 1992. It is clear to me — and to importers — that the Minister for Finance is, in effect, creaming off millions of pounds of excess VAT at point of entry due to the weakness of sterling. By applying a fixed rate of sterling, £1.0239 against the punt, for October the Minister has already made a killing at the expense of importers of goods from the sterling area.
Manufacturers using imported raw materials for re-export to the sterling area and retail traders in the Border counties who are suffering heavily from the effects of weak sterling are the real victims of the Minister's excesses. The Minister should heed his own advice by passing on the full value of sterling to importers. On Friday, 2 October, when sterling was trading at £1.075 against the punt importers were paying an effective 22 per cent VAT at point of entry. The situation got worse and on Monday, 5 October, the rate was in the region of 22.6 per cent. The Ministers actions have helped to increase costs unnecessarily and is therefore putting people out of work.
Considering his advice to the business sector the Minister is acting like a hypocrite in this instance. I urge him to make further representations to the EC at once to ensure that he is in a position to fix a daily exchange rate which is equitable and fair, which would go a long way to assist the people to whom I referred earlier, those who are importing raw materials and re-exporting to the sterling area, and the very hard pressed traders in the Border counties. I hope the Minister will make a sensible response in this regard.
I am sure the Deputy would agree that the word "hypocrite" ought not to be used against a Member of the House.
I am sorry, a Cheann Comhairle.
The word "hypocrite" ought to be withdrawn.
I do not think I called the Minister a hypocrite.
The Deputy did.
The word was "hypocritical".
That was the implication. The Deputy said that the Minister acted like a hypocrite.
I did not intend to say that the Minister was a hypocrite.
I reject entirely any insistence or allegation that the Minister for Finance is a hypocrite or acts like a hypocrite at any time. In this matter he is controlled by European regulations.
The rules regarding the rates of exchange used in determining the customs value of imported goods are governed by EC regulation. As VAT at import is treated as a customs duty these rules are also used for determining the rates of exchange for applying VAT at importation. These EC rules provide for fixed rates of exchange, valid for a calendar month, for determining the import value for the purpose of applying customs and VAT charges. The objective of having fixed rates of exchange is to simplify matters for both traders and Customs and the regime of fixed monthly rates, which replaces an earlier weekly regime, was introduced in 1991 following representations to the EC Commission by trade interests. Anybody who understands trade and the mobility of trade knows that if one was to move goods with an import rate per day it would be very hard to remain with business practices.
The terms of the EC rules dictate the manner in which the exchange rates are determined and do not provide scope for any flexibility at national level. In the normal course, the actual exchange rates applying on the second last Wednesday of each month are used to fix the rates to apply for the next calendar month.
There is continual monitoring of the actual exchange rates and, under the EC rules, if they differ by 5 per cent or more from the rate already established for the month, this fixed rate is changed to reflect the actual rate; all monitoring is carried out by reference to the actual rate applying at close of business on Wednesdays — and where an adjustment applies, it applies from the following Wednesday.
Since the UK left the ERM, the 5 per cent variation occurred on one occasion only, namely, at the end of September, and the September rate was adjusted to stg. £1.0239 to reflect the actual rate. The October rate, also stg. £1.0239, has not yet fallen to be adjusted under the 5 per cent rule and the need for adjustment will next be considered by reference to the actual rate applicable at close of business on tomorrow, Wednesday, 14 October 1992.
The exchange rate rules have no bearing on determining the price paid by the importer for his goods and are relevant only for the purposes of calculating VAT at importation. It is also important to note that VAT payable at importation may be reclaimed by registered traders. Furthermore, in practice, arrangements for the "deferred payment" of VAT at import, which allow for deferring the payment until the middle of the month following importation, mean that the period for which a trader is out of pocket is usually of the order of one to six weeks and the only effect for traders is one of cash flow. On this occasion, importers have claimed that the fixed rate system is penalising them as sterling weakens against the Irish pound. It should also be borne in mind that these same importers will reap the benefits of the system in a situation where the opposite is the case and sterling strengthens.
Pleas for the drainage of the Owenmore and Arrow rivers in County Sligo have been made many times by many Deputies in Dáil Éireann. The first such plea to this House was made more than 50 years ago. Still the rivers remain undrained.
The flooding there during the past few months was just about the worst in all of those 50 years. It was not the spectacular summer flash floods of some other years but something much more damaging — a persistent, consistent, continual flooding from the end of July to the middle of September. The flooding was ruinous for the meadows, for the pastures and for the second-cut silage. The round plastic bales saved many a farmer this year but not the farmers in the low lying areas of the Owenmore and Arrow because they did not have amphibious tractors to go with the balers.
Now, after all this, one of the worst seasons in memory, today I got the news from the Minister of State, in reply to a parliamentary question, that the Owenmore and Arrow may never be drained. According to the Minister, present indications are that it will be difficult, perhaps impossible, to formulate any scheme which would give an economic return for the investment involved. That is bad news — drastic news — for the farmers of the catchment area. The Minister went on to say that the possible drainage is still under review but the signals he is giving are very negative.
We all know the catchment areas that have qualified under the cost-benefit analysis and we can make our own comparisons. How have some of those areas got through and why is the drainage of the Owenmore and Arrow now in doubt? Have the rules been changed because the Government do not want to do any more arterial drainage, because they want to save the money?
The total catchment area of the Owenmore and Arrow is 140,000 acres, one-third of the land area of County Sligo. Of that land, 29,000 acres are subject to flooding. The duration of floods have increased from 12 days to an average of 21 days — and, as the Minister of State knows, the duration was much longer this year. The livelihood of 3,000 farmers is at stake. We are talking about small farmers; the average size of farms is 42 acres. The farmers need the drainage desperately and they have waited for a long time.
I now appeal to the Minister of State — and I am sure that in this regard I have the full backing of his own colleague, Deputy Mattie Brennan — to ensure that the drainage starts and starts quickly. That can be done. We know that the Owenmore and Arrow should qualify because we know what other river catchment areas have qualified. All that is needed is the political will to put the dredgers in.
I am aware of the extent of flooding that can occur in the Arrow-Owenmore catchment area. A review of the results of the environmental impact assessment and the cost-benefit analysis, together with consultations with local groups, is being carried out. Until that is complete it is not possible to say whether an economic scheme can be designed. Therefore, the question of a financial allocation does not arise at this time.
I assure Deputy Nealon that the rules have not been changed so far as the present Government are concerned, or so far as my colleagues and predecessors were concerned. However, the Deputy should remember that his colleagues in Government did change the rules in 1986, when the priorities attaching to arterial drainage by name and location were changed when the funding and the mechanism for funding the occurence with Europe were terminated and the farm modernisation scheme was suspended. The European Commission took a decision not to support any more arterial drainage as a result of the Government decision here. However, as a result of the appointment of Deputy Nealon's colleague of the time, then the Minister for Finance, now Commissioner MacSharry, the Arrow-Owenmore area got priority and the Government are now in a position to be able to progress until we can conclude the study and make an absolute decision.
I have had several discussions with Deputy Nealon's Oireachtas colleagues, Deputies Brennan and Ellis, in relation to this matter. On numerous occasions they have impressed on me the urgency of the issue.
I assure the House that the results of the aforementioned studies will be available towards the end of the year and the Government will do their utmost to make a decision as quickly as possible thereafter.
I wish to talk about the wildlife rangers. There are 48 wildlife rangers nationally and they do tremendous work. Their duties are in accordance with the 1976 Wildlife Act and in carrying out those duties they often encounter much danger and are suspect to such things as the illegal netting of hares, pheasant shooting out of season, the shooting of deer out of season and a common place practice classified as bird trapping. People may be surprised at what I mean by bird trapping. It is the practice in which someone would put a tacky substance on a tree and use a decoy bird in an attempt to attract birds such as goldfinches, chaffinches and linnets. There is a thriving export market in that business.
Although our wildlife rangers may be deployed around the country, they have scant resources. The Department will not supply them with even a pair of binoculars. They have no distinctive uniform by which they may be identified and, on top of that, they have no radio control in their cars. In many instances wildlife rangers encounter danger when looking for serial numbers of guns being used illegally yet they cannot even contact one of their fellow colleagues, something that I feel places them at severe risk. The wildlife rangers attached to the Limerick office cannot be contacted because the Limerick office is not manned. These people should have an identity and they should be respected. In order to achieve that identity and respect, it is incumbent on the Minister to provide the resources for them to adequately fulfil their duties.
I am very impressed at the tremendous interest shown by Deputy Finucane in this matter but I should have to take issue with him on several of the statements he has made. All wildlife rangers employed by the Office of Public Works are issued with anoraks, waxed cotton jackets, waxed cotton pullovers, green sweaters, wellingtons, waders and boots. There are no plans at present to provide the rangers with a uniform as such, and I think that if Deputy Finucane took into account the type of work done by the rangers he would realise that if we were to uniform the rangers or to give them special transport and other distinctive identity they probably would not be so successful in doing their job.
I have great regard for our wildlife rangers. During the past year I have supported the recruitment of many rangers, which has been done. I have travelled with the rangers myself. They have vehicles at their disposal in various parts of the country and they have binoculars at their disposal in various parts of the country.
When with my Department before, I was responsible for ensuring that the office in Limerick has a lovely secretary available all day, five days a week, to answer the telephone, to do the necessary secretarial work and to provide a backup service to the wildlife people, the architectural people and the other staff of the Office of Public Works based at the Limerick office. I am confident that that service is very good and that the staff there are doing an excellent job. I have met all the staff and have been in to see the facilities for myself.
Taking into account the resources available, the extra recruitment that has been carried out and the fact that the rangers are provided with special clothing and other facilities and utilities, we must be reasonably satisfied with the level of service being given by the State in the provision of equipment to staff at a time when resources are reasonably scant.
The Dáil adjourned at 9.25 p.m. until 10.30 a.m. on Wednesday, 14 October 1992.