Finance Bill, 1995: Report Stage (Resumed).

Debate resumed on amendment No. 13:
In page 28, to delete lines 5 to 51, in page 29, to delete lines 1 to 55, and in page 30, to delete lines 1 to 27.
—(Deputy M. McDowell.)

Amendments Nos. 13 to 20, inclusive, are being taken together.

I welcome the Minister's amendment. The Minister and I are clear as to why that provision has been included in the Bill. We are clear on the specific circumstances which have given rise to this amendment. It will mean the Revenue Commissioners will not have to create more bureaucracy in reinterpreting how and to whom this measure will apply. Some indication should be given to the Revenue Commissioners regarding cases involving a second relationship which is obviously permanent, involves children, a family home and mortgage repayments. There is no need for further investigation or discussion by the Revenue Commissioners of such cases. Such guidelines and facts should be made clear to them, that is the intent of this section. As the Minister is aware, since 6 April such people are covered under the new tax regime. As that is a matter of severe difficulty and hardship I ask that we move with some speed on this issue. I commend the Minister for tabling his amendment, a helpful, compassionate and correct move on his part.

I tabled amendment No. 19 the effect of which would be to return to the position that existed prior to the Government's decision to change the legislation on covenants. We had a good discussion on this issue on Committee Stage. The net point of my arguments could be summed up by saying that while the Government was entitled to decide that the fees element of third level education should be paid by the State and taxpayers, it was unfair to change the legislation governing all covenants. The legislation should only have been changed in so far as it applied to education. That measure was sold on the basis that the effect of the change in covenants for educational purposes would cover the bulk of the cost of the Government's decision to abolish third level fees. The Minister's amendment No. 20 goes some way towards alleviating some of the hardship on one specific group. The Minister should have accepted my amendment or tabled one to take account of what I have said.

After the Bill is passed those who care for aged parents will be unable to avail of covenants. We discussed on Committee Stage the definition of permanent incapacity. I thought the Minister would have tabled an amendment on Report Stage to more or less guarantee that the incapacity of those over 65 would be regarded as being permanent and that the cut would apply. It is not fair to leave the issue up in the air. If we do that many middle income people who covenant moneys to keep their aged fathers or mothers in somewhat reasonable lifestyle will be affected. On Committee Stage I said that the State should not interfere in that area as the use of covenants by such people served a useful purpose.

There is considerable merit in the suggestion put forward by Deputy McDowell, that as the Minister, the Department of Finance and the Revenue Commissioners have been determined for many years to abolish covenants, there should be a ceiling of £300,000. I pointed out on Committee Stage that it did not appear fair that a person earning £200,000 could covenant £10,000, 5 per cent of their income, to a parent while a person earning £30,000 who might want to covenant money to their parents would not be able to do so and would not be entitled to relief on that money. Tax relief on covenants would mean a great deal to a person on the lower income while it would not mean the same to those on the higher one.

The changes which the relevant section brings into effect go in the wrong direction. It was justifiable to change the legislation on covenants relating to education, and that was the basis on which this measure was sold, but the Minister has taken a sledgehammer to change the basis of it. I am mindful that I have one opportunity to speak on these amendments. I welcome the Minister's amendment for the reasons given by my colleague, Deputy Cullen. We had a long discussion on this matter on Committee Stage. Separated couples will be affected by this provision and Deputy Cullen instanced a particular case in his constituency. My understanding of the amendment is that the Revenue Commissioners must be satisfied that application of the changes would cause hardship and then this would not apply until 6 April 1998. Will the Minister clarify if that is the net effect of the amendment?

I want to leave something for the Deputy to do when he takes up office.

The divorce referendum will be passed by then.

While I have some idea why 6 April 1998 is the date specified, I am sure future Minister would be able to reconsider the matter if the decision of the people in the divorce referendum is not what the Minister and I wish for. In framing a watertight section, there is always a danger of making it so watertight that nobody could avail of its provisions. Not only must the Revenue Commissioners be satisfied that the changes effected by subsections (1) and (2) would give rise to hardship — I am sure they will publish guidelines in this regard — but they must have been notified of the disposition before 8 February 1995. Therefore, to qualify a person would have to have made a covenant and claimed for it prior to 8 February 1995 and it must be in respect of a disposition of income made on or after 6 April 1993. The Minister's amendment is so watertight that people may not be able to avail of the measure. Having satisfied all the requirments, the Revenue Commissioners must be satisfied that the changes would give rise to hardship. While I welcome the amendment, I disagree with changing the position in regard to covenanting and if, before next year's budget, it is evident that the application of this section creates enormous difficulties, I hope the Minister will reconsider the matter. I do not believe we have heard the last of the changes in this regard. Application of these provisions and the elimination of covenanting will give rise to problems none of us anticipated.

Deputy Cullen outlined a case relating to the hardship clause. Some women in my constituency in receipt of lone parent's allowance, many of whom have live-in boyfriends, have surrendered their lone parent's book to go straight. In the cases to which I refer the boyfriends were working and the girls were in receipt of lone parent's allowance.

By definition a lone parent has a child.

That is correct, by definition, she has a child. The women to whom I refer went straight because they thought they would have a better chance of getting corporation flats. Would such cases be covered under these measures or must people have a mortgage? The covenant was the only form of compensation that could be offered to such people when penalised to the tune of £80 per week for going straight.

In regard to education covenants, is anything being done for the limited number of students who, prior to the decision of the Minister for Education, benefited from covenating and the higher education grant scheme but who are now in limbo. All Hallows college, with approximately 100 students, and the Mater Dei college, with approximately 200 students, on the fringe of my constituency benefit from the higher education grant scheme, but because of an ideological hang-up, the Minister for Education excluded certain colleges and courses from the free fees scheme. She excluded what she saw as philosophical-theological type courses. While many will benefit under the scheme, why are a few hundred students being eliminated because of a personal hang-up of the Minister's colleague? A few students have been hung out to dry and, while the Minister's amendment would not apply to them, can they plead hardship under any scheme? Perhaps talks are ongoing in regard to including them. Having included thousands of students under the free fees scheme, I fail to understand why the Minister for Education sacrificed 500 or 600. I accept the Minister proposes to introduce a tax free allowance provision for private colleges next year, but there is a distinction between private colleges and private commercial colleges. All Hallows and the Mater Dei colleges have a religious background and are non profit-making organisations.

Is the Deputy talking about seminarians or lay students?

I am talking about lay students who the Minister's colleague excluded from the free fee scheme. The Mater Dei run BA and religious courses. The All Hallows college run a BA in humanities along philosophical-theological lines, but the students are not seminarians. While this provision will not apply until next year, I hope the door will not be closed on those students now. This otherwise great scheme will be spoiled by the Minister's decision to sacrifice a few students.

I thank Deputies for the compliments they paid to me and my colleagues. I listened carefully to the points made and considered the measures proposed in amendment No. 19 tabled by Deputy McCreevy but I can only do so much to address cases of genuine hardship. People who have made arrangements for themselves as responsible as possible and would remarry if they were free to do so, would qualify under the normal structure of tax allowances. A particular case was made in that regard and we have tried to address it in the best possible manner.

To answer the specific questions, Deputy McCreevy was correct in his interpretation that Revenue will operate a hardship position which will first take into account the tenor of the debate that has been articulated here. It will be exercised — and we will confirm this if necessary — with the degree of discretion required and it will be consistent. Deputy Cullen was concerned that there might be a lack of consistency in relation to treatment. We spoke earlier about consistency in these matters and, in political terms, I believe it was Deputy Lenihan who once described the Fianna Fáil Party as not being subject to the tyranny of consistency — a wonderful phrase, typical of the man.

He said many wonderful things in his career.

It is a reasonable concern and due discretion will be exercised. I say to Deputy Ahern that in any change, some people may find themselves disadvantaged. I am not sure of the position in relation to the categories to whom the Deputy refers. Irrespective of the nature of their ownership, if colleges are recognised by the Department as running approved courses — I think the Mater Dei Institute and others are currently recognised by the NCEA——

——they would certainly qualify for the income tax relief in relation to fees because they are privatepro bono institutions. They are not commercial colleges in that sense. However, I will get advice on this matter and I will get back to the Deputy in relation to the effect of this next year. Some categories of students currently benefiting from covenants will not continue to benefit, for example, students on post-graduate courses. It is not possible to apply the scheme to everybody but we are making a serious change to the whole structure of the covenant scheme this year because it was necessary to so do. The ballooning in terms of income forfeited and so on was a matter of concern. We will carefully monitor how this will work during the year and I will be open to making whatever sensible adjustments are required. In the nature of this business, nobody is endowed with wonderful wisdom that enables them to foresee everything in advance. It is probable that some problems will arise but I hope to be able to address them as quickly as possible.

In regard to the date, Deputy Cullen anticipated the answer fairly accurately in that we hope to have a different legal and statutory regime in place by 1998. If not, it will then be up to the Minister for Finance of the day to decide what to do.

I will withdraw my amendment. I accept what the Minister says subject to this caveat generally. The circumstances of which Deputy Cullen and myself were aware and drew to the Minister's attention in correspondence exist for other people also. If there is not a particular response to the divorce referendum that all of us in this House apparently want in one degree or another, we will have to broaden this measure to include more people in that situation. It is all very well to deal with the person of whom you are aware but I am sure many people are being hammered by the tax system and prevented from doing their duty by their children and their partner.

It will all have to be rewritten.

If the divorce referendum is not carried, the sense of justice which informed the Minister's acceptance of the request for amendments along this line would require significant amendments to accommodate other people in the same position.

Amendment, by leave, withdrawn.
Amendments Nos. 14 and 15 not moved.

I move amendment No. 16:

In page 31, line 8, after "assessment" to insert "or £3,000 whichever is the greater".

Amendment put and declared lost.

I move amendment No. 17:

In page 31, line 27, to delete "This subsection" and substitute "Subject to subsection (3), this subsection".

Amendment agreed to.

I move amendment No. 18:

In page 31, line 35, to delete "As" and substitute "Subject to subsection (3), as".

Amendment agreed to.

Amendment No. 19 has already been discussed. I ask Deputy McCreevy to formally move this amendment.

Do the hardship conditions, other than those we discussed in Committee, apply to separated people or do they apply to other areas also?

If they are over 65 and separated. I do not have the answer — I will get back to the Deputy.

I move amendment No. 19:

In page 32, to delete line 25 and substitute the following:

"(ii) who is aged 65 or over, or

(iii) who is unemployed.".

Amendment put and declared lost.

I move amendment No. 20:

In page 32, between lines 39 and 40, to insert the following:

"(3) (a) If, but only if—

(i) the conditions set out in paragraph (c) are satisfied, and

(ii) the Revenue Commissioners are satisfied the application of the amendments effected by subsections (1) and (2) would give rise to hardship,

then, those amendments shall not, to the extent that the Revenue Commissioners consider just, apply or have effect before the 6th day of April, 1998, in respect of a disposition, to which subparagraph (i) of paragraph (b) applies, by a person (hereinafter in this subsection referred to as ‘the disponer'), in so far as, by virtue or in consequence there-of, income is payable in a year of assessment to or for the benefit of an individual to whom subparagraph (ii) of paragraph (b) applies.

(b) (i) This subparagraph applies to

(I) a disposition made before the 6th day of April, 1993, or

(II) a disposition made on or after the 6th day of April, 1993, to immediately replace a disposition made before that date which has ceased to be effective and to the extent, but only to the extent, that the amount payable to or for the benefit of an individual to whom subparagraph (ii) applies under such later disposition does not exceed the amount payable to or for the benefit of that individual under the earlier disposition.

(ii) This subparagraph applies to an individual who is not a child of the disponer and who, for the whole of the year of assessment, is resident with, and shares the normal household expenses with, the disponer.

(c) The conditions referred to in paragraph (a) are as follows:

(i) the making of the disposition referred to in paragraph (b) (i) (I) shall have been notified to the Revenue Commissioners before the 8th day of February, 1995,

(ii) a child, to whom paragraph (d) applies, of the disponer or of the individual to whom subsection (ii) of paragraph (b) applies or of both of them is resident with them for the whole, or substantially the whole, of the year of assessment, and

(ii) the child to whom subparagraph (ii) relates is wholly or mainly maintained by the disponer and the individual jointly at their own expense.

(d) A child to whom this paragraph applies is a child who, for a year of assessment—

(i) is under age of 16 years, or

(ii) if over the age of 16 years at the commencement of the year of assessment, is receiving full-time instruction at any university, college, school or other educational establishment.".

Amendment agreed to.

Amendment No. 21 is a drafting amendment and I call on the Minister to formally move it.

I move amendment No. 21:

In page 35, line 29, after "section 14A" to insert "(inserted by the Finance Act, 1995)".

Amendment agreed to.

Amendment No. 22 is in the name of the Minister. Amendments Nos. 24, 25 and 27 are related and No. 26 is consequential on No. 27. Is it agreed that we take Nos. 22 and Nos. 24 to 27, inclusive, together? Agreed.

I move amendment No. 22:

In page 35, to delete lines 31 to 37 and substitute the following:

"(i) by the substitution of the following paragraphs for paragraph (iii) of the proviso (substituted by the Finance Act, 1993) to paragraph (c) of subsection (1):

‘(iii) for the purposes of qualifying trading operations such as are referred to in subparagraph (iie) (inserted by the Finance Act, 1995) of paragraph (a) of subsection (2) of section 16, the aforementioned evidence shall include the certificate referred to in subsection (3C) (as so inserted) of section 16, and

(iv) for the purposes of relevant trading operations, the aforementioned evidence shall include the certificate referred to in section 16A (1) (inserted by the Finance Act, 1995,',".

This amendment concerns the BES for horticulture. I was persuaded by the merits of the arguments on Committee Stage and I do not intend to go through it in great detail. I will do so if the House wishes me to do so in my reply but I am conscious of the time factor on all sides. We have confined the amendment to a number of categories, essentially greenhouse and greenhouse related rather than traditional farming of a kind that could get additional support. This is being done in the spirit of the request made by the Fianna Fáil spokesperson on Agriculture.

I thank the Minister. We withdrew our amendment on Committee Stage because the Minister promised to come back with his own amendment drafted by the experts in the Department. I thank him for accepting the arguments put forward from this side of the House. On foot of a development plan involving certain guidelines to be enunciated by the Minister for Agriculture, Food and Forestry, in consultation with the Minister for Finance, horticultural development can qualify for BES funding. This is proof that we can do good work on Committee Stage.

I know of people in my constituency who are involved in this area and I commend the Minister for responding so positively. I hope his colleague, the Minister for Agriculture, Food and Forestry, will ensure that people will be made aware that this section has been included in the Bill so that they can act accordingly. I hope there will be a favourable response from that section of the industry given that the appropriate changes have been made. I hope also that the information will be available as quickly as possible.

I welcome the amendment but I reiterate what I said about the necessity to ensure that it does not distort competition. I know there are criteria set down in the form of a three-year development plan which is export oriented or import substitution oriented. I would like the Department to keep a close eye to ensure that is the real effect of the measure because I would not like it to be the case that people who have made their investment will find themselves hammered by competition which is State subsidised.

I will be more expansive at a later stage. The Deputies were anxious on Committee Stage that the scheme should be specifically directed towards increasing glass house acreage, that the emphasis should be on export production or import substitution, that pioneers in the sector should not be disadvantaged — the point to which Deputy McDowell has referred — and that the scheme would be properly targeted by having companies and facilities approved by the Department of Agriculture, Food and Forestry in a manner similar to the way the BES tourism projects were vetted by Bord Fáilte. In the time allotted, we were not able to go into great detail on this matter but it is my intention to work closely with the Department of Agriculture, Food and Forestry. If the Deputies become aware of problems I ask them to let us know.

Amendment agreed to.

I move amendment No. 23:

In page 38, to delete line 33, and substitute the following:

"(ii) £15,000:

Provided that this subsection shall not apply to an individual who makes a subscription for eligible shares in a qualifying company which carries on or intends to carry on such qualifying trading operations as are referred to in subparagraph (iib) (inserted by the Finance Act, 1995) of paragraph (a) of subsection (2) of section 16.".

This amendment relates to the proposals in section 17 to extend the seed capital scheme to individuals who establish a company to carry on trading operations on an exchange facility located in the Customs House Docks Area. Currently, FINEX, the financial division of the New York cotton exchange, is the only exchange facility established in the area and is not grant aided. To qualify for the seed capital scheme an individual's non-employment income in each of the three tax years immediately preceding the year in which the individual sets up his or her new business must not exceed the lesser of (i) the individual's employment income, or (ii) £15,000.

Since the publication of the Finance Bill it has been brought to my attention by the FINEX authorities that this requirement represents a serious obstacle to attract into the exchange, through the vehicle of the seed capital scheme, individuals suitably qualified and motivated to trade on FINEX. IDA Ireland, who are involved in promoting the exchange facility in the Custom House Docks Area, have indicated to me that they are sympathetic to the case for altering the income limit rules. Accordingly, this amendment proposes to remove the income limit requirements in the seed capital scheme in the case of individuals who propose to trade on an exchange facility set up in the Custom House Docks Area and in that case only.

The Minister has explained the purpose of amendment No. 23 which makes the seed capital scheme more attractive. I welcome any improvements because, as the Minister and others have pointed out, although the idea of the seed capital scheme is excellent, the constraints built into the scheme meant that very few could avail of it. I welcomed the changes that were made in this year's budget and this further change is also welcome.

Amendment agreed to.

I move amendment No. 24:

In page 40, to delete lines 52 and 53 and in page 41, to delete lines 1 and 2, and substitute the following:

"(e) in section 15—

(i) by the insertion after subsection (3A) of the following subsection:

‘(3B) (a) A company, whose trade consists of the cultivation of horticultural produce within the meaning of subsection (2C) (inserted by the Finance Act, 1995) of section 16, shall not be a qualifying company unless and until it has shown to the satisfaction of the Revenue Commissioners that it has submitted to, and has had approved of by, the Minister for Agriculture, Food and Forestry (hereafter in this subsection referred to as "the Minister") a three year development and marketing plan in respect of the company's trade, which plan is primarily designed and formulated to increase the exportation of such produce or to displace the importation of such produce.

‘(b) In considering whether to approve of such a plan, the Minister shall have regard only to such guidelines in relation to such approval as may, from time to time, be agreed between the Minister and the Minister for Finance and those guidelines may, without prejudice to the generality of the foregoing, set out—

(i) the extent to which the company's interest in land and buildings (other than greenhouses) may form part of its total assets, and

(ii) specific requirements which have to be met in order to comply with either of the objectives mentioned in paragraph (a), and

(iii) the extent to which the money raised through the issue of eligible shares should be used to identify new markets and to develop new or existing markets for the company's produce.'.


(ii) by the substitution of ‘a company in which a relevant investment is made by a specified individual (being that individual's first such investment in that company)' for ‘a relevant company' in subsection (8),".

Amendment agreed to.

I move amendment No. 25:

In page 42, to delete line 5 and substitute the following:

"meaning of subsection (2B),

(iie) in respect of a subscription for eligible shares made on or after the passing of the Finance Act, 1995, the cultivation of horticultural produce within the meaning of subsection (2C),',".

Amendment agreed to.

I move amendment No. 26:

In page 42, line 15, to delete "subsection" and substitute "subsections".

Amendment agreed to.

I move amendment No. 27:

In page 43, to delete line 17 and substitute the following:

"in the State.

(2C) (a) For the purposes of subsection (2), the cultivation of horticultural produce means the cultivation, in a greenhouse or greenhouses within the State, of plants used for food or for the production of food or ornament or of herbaceous plants, and includes the technical procedures, in relation to such cultivation, necessary for the production and preparation for market of flowers, decorative foliage, fruit, nursery stock, herbs and vegetable crops (including potatoes and seed potatoes), in respect of which greenhouse or greenhouses a certificate has been issued by the Minister for Agriculture, Food and Forestry certifying that—

(a) the construction, improvement or repair of the greenhouse or greenhouses concerned, or

(b) the installation or improvement of irrigation or heating facilities in the greenhouse or greenhouses concerned,

may be eligible to be grant-aided under a scheme of assistance administered by the Minister.',".

Amendment agreed to.

Amendment No.28 is in the name of the Minister and amendment No. 29 is an alternative and it is suggested that amendments Nos. 28 and 29 be taken together. Is that agreed? Agreed.

I move amendment No. 28:

In page 53, line 33, to delete "30th day of September, 1995" and substitute "31st day of December, 1995".

Deputy McCreevy invited me to alter the date and we have done so. We consider that the last accounting day of the calendar year would be appropriate, that is 31 December.

That goes to show the good work that was done on Committee Stage. I invited the Minister to come forward with a more suitable date than 30 September 1995 and his suggestion of 31 December 1995 is acceptable.

Farmers who are compelled to dispose of their stock on foot of the disease eradication scheme face a claw-back on the stock relief they would have been granted. If they apply in writing to the Revenue Commissioners before 31 December they will be able to avail of the option of spreading it over the following two years, as proposed in the original section.

I tabled an amendment on Committee Stage and have repeated it on Report Stage proposing the date 29 February 1996. The Minister has come half way to meeting my proposal and that is fair enough.

Amendment agreed to.
Amendment No. 29 not moved.

We now come to amendment No. 30 in the name of Deputy McCreevy. Amendments Nos. 31 to 35, inclusive, form an alternative composite proposal and it is suggested that amendments Nos. 30 to 35, inclusive, be discussed together. Is that agreed? Agreed.

I move amendment No. 30:

In page 56, line 43, to delete "Minister for Finance" and substitute "Minister for Enterprise and Employment in consultation with the Revenue Commissioners".

My amendment relates to section 29 of the Bill as initiated which relates to tax relief on foreign branch profits. We had a good discussion on this issue on Committee Stage. I expressed concern that all the pressure would build up on the Minister for Finance, which I did not think was correct and I made the same point on other sections which related to the Minister for Education and the Minister for Foreign Affairs. I suggested that the Minister for Enterprise and Employment in consultation with the Revenue Commissioners should be responsible for decisions. I note the Minister has come forward with amendments to insert "following consultation with the Minister for Enterprise and Employment" and in this era of openness, transparency and accountability it takes the spotlight off the Minister making a decision. We have enough experience in the very recent past of the glare of publicity in those areas. I thank the Minister for agreeing to the spirit of the amendment.

We had a debate on this matter on Committee Stage. It is not appropriate for the Revenue Commissioners to be involved because they are in the collection business. I think my amendment and the consequential textual amendments meet the object outlined on Committee Stage.

Amendment, by leave, withdrawn.

I move amendment No. 31:

In page 56, line 45, after "Minister", to insert ", following consultation with the Minister for Enterprise and Employment,".

Amendment agreed to.

I move amendment No. 32.

In page 57, line 2, after "Minister", to insert "following consultation with the Minister for Enterprise and Employment".

Amendment agreed to.

I move amendment No. 33:

In page 58, line 2, after "Minister", to insert ", following consultation with the Minister for Enterprise and Employment,".

Amendment agreed to.

I move amendment No. 34.

In page 58, line 31, after "Minister", to insert ", following consultation with the Minister for Enterprise and Employment,".

Amendment agreed to.

I move amendment No. 35.

In page 58, line 34, after "Minister", to insert ", following consultation with the Minister for Enterprise and Employment,".

Amendment agreed to.

Amendment No. 36 is in the name of the Minister. Amendments Nos. 37, 38 and 39 form a composite proposal and amendments Nos. 36, 40 and 41 are consequential on this proposal. It is suggested therefore that amendments Nos. 36 to 41, inclusive, be taken together. Is that agreed? Agreed.

I move amendment No. 36:

In page 64, to delete line 33.

The purpose of these amendments is to provide tax incentives for the construction or refurbishment of certain multi-storey car parks. I gave formal notice on Committee Stage of my intention to bring in this amendment. I apologise for the lateness of its circulation but I hope the House will bear with me.

Multi-storey car parks already qualify for certain tax incentives where they are situated in designated areas under the 1994 urban renewal scheme. The incentives consist of capital allowances of 50 per cent which, in the case of owner operators, may be taken in full in one year and in the case of lessors may be taken at the rate of 25 per cent in year one with annual allowances of 2 per cent on the balance of the 50 per cent. Lessees of multi-storey car parks in respect of which capital allowances have been claimed are also entitled to a double rent allowance for rent paid on the lease of the car park. It is now proposed that these allowances will be generally available in the case of multi-storey car parks in respect of which the relevant local authority gives a certificate in writing to the person providing the multi-storey car park stating that it is satisfied that the car park has been developed in accordance with criteria laid down by the Minister for the Environment following consultations with the Minister for Finance.

In the case of expenditure on the refurbishment of a multi-storey car park, capital allowances will be available only if the amount expended on the refurbishment equals at least 20 per cent of the site exclusive market value of the car park immediately before the refurbishment. The new scheme will run for a three year period starting 1 July this year. Our rationale in bringing forward these amendments is to reinforce town centres. Increasingly the shopping trend is to locate in peripheral areas where readily available car parking facilities facilitate shopping for a range of goods. All urban renewal policies are aimed at regenerating the core of our cities and towns. Strong shopping precincts are central to this policy. We are not alone in this. In Scotland the Glasgow Development Agency decided to grant-aid multi-storey car parks as part of its regeneration policy while in Paisley where the major supermarket chains have located in the suburbs, the local authorities also subsidise car parks.

Deputies will say one gets these benefits in the designated areas. The value of the land inside the designated area for retail activity is driving up the price in primary cost terms so there is not an economic return from a car park inside a designated area. What we are trying to do is give value to land adjacent to but outside of the zone of a designated area so that one can park a car adjacent to an area which has been refurbished. This came to my attention through my colleague, the Minister for the Environment, and I am happy to propose it.

In the first instance all car parks will need planning permission so the local authority will determine whether it wants a car park. Criteria will be set down by the Minister for the Environment the central function of which will be to reinforce existing shopping centres in built up urban areas to offset the out of town shopping precinct which is a growing problem in some parts of the country and a major problem in the UK. It undermines the rateable valuation base of a town among other things. That is the reason for the amendment.

I take it this is a new plan. What say will local authorities have over car parking charges? People may be exploited. Will there be any guidelines on this? I do not think these charges are price controlled. The package is an attractive one. I appreciate that planning permission must be sought and I welcome that as it means car parks must be built according to specified criteria. I endorse the proposal and hope the public will not be overcharged. If I understand the section correctly car parks will get a tax write-off. Will they be allowed to write off 90 per cent of the capital allowances?

It is a maximum of 50 per cent.

It is still extremely attractive but I would not like to see signs erected to the effect that car parking charges have been increased from £2 an hour to £3 an hour. It would be another burden hard-pressed taxpayers would have to bear. That aspect must be looked at. However, I welcome the amendment.

Does this apply only to new buildings or to existing buildings?

There is a proposal for refurbishment in respect of existing car parks.

I suppose they will put plaster mouldings around them. The Minister said it was proposed to have car parks adjacent to urban renewal areas. Am I correct in saying they will be built in suburbs such as Terenure, Rathmines, Ranelagh and Sandymount?

Once they are all in Dublin south east.

There is need for off-street car parking in our constituency. Traders find it impossible to attract customers because they do not have car parking facilities.

I welcome this provision. The definition of a multi-storey car park is one with three or more levels. In Waterford we regenerated the city centre and now have a successful development. However, we had a terrible car parking problem which we could not solve. The corporation would not allow a company to erect a number of car parking levels so it built into the river and created space at ground level. It was adjacent to the designated area where the new development had occurred. However, it would not qualify under the section but the validity of the development is equal to what is defined in the Bill.

Inner city ports are disappearing but as the Minister knows we have a superb port down river and the possibility exists for further expansion. The harbour commissioners own some of the land and we are negotiating with them. There is tremendous potential for other developments all of which will need car parking facilities. The only way we can provide it is to extend into the river. I do not mean we are turning the river into a car park.

It sounds like it.

We are looking for further investment. This should be included as the validity of the investment is equal to having the car park three storeys high. Due to a scarcity of land some developments have been extended underground. There was a major debate about the car part in the shopping centre in Waterford where two storeys are below street level and one storey is on street level. This type of development can be much more expensive than an overground development. Will a car park which has two storeys, below street level quality?

A storey is a storey, whether it is above or below ground.

Why not make it two storeys?

This brings me back to my first point about the ground space being equivalent to a normal two storey development. This equally applies in Cork, Limerick and Dublin. In the case of the Point a car park may extend some distance into the river and it would not interfere with the landscape or the harmonious development of the area. The existing amenities would be enhanced by such a development. I ask the Minister to reconsider this provision as this sort of investment is necessary and is just as expensive. It would be a welcome boost to inner city port areas.

I am well disposed to amending this amendment. My officials are discussing the matter with the Department of the Environment officials to see if two or more storeys would be an acceptable formula. Subject to getting the green light from the Department of the Environment officials, I will amend the amendment.

I reply to Deputy Connolly, market forces will effectively ensure that there is no crazy price exploitation. The facility will be costly to build and it is in the interests of the operator to ensure that he maximises the revenue. If he charges people a rate which forces people to park on the open streets in and around the car park then it will defeat the purposes of the exercise. The internal mechanisms of the market forces will deal with this point.

It is possible for a planning permission granted by a local authority to set or attempt to set charges. I am not sure how enforceable that is as I suspect a developer could appeal this to An Bord Pleanála with some degree of success. Even if the manager at the behest of the local members tried to fix charges I would be fairly confident in my old trade as a planning consultant or architect, of having it struck down by An Bord Pleanála or removed.

Under the Planning Act one could only have a development charge.

One can recommend that the charges should be agreed in consultation but this would be very frail and I am not sure it would sustain an appeal to An Bord Pleanála.

One would not get away with it.

If this provision is to work it must be done in conjunction with the local authority which will have land and which could take an equity interest in the car park by contributing the land. If the land represents 20 per cent of the total cost of the project then it could be regarded as equity.

We have done this very successfully.

This would enable the local authority to have some input in terms of management and it would address some of the potential concerns to which Deputy Connolly referred. Deputy McDowell asked if this could apply to suburban areas such as the ones in our constituency to which he referred. The answer is yes, if they get planning permission.

The Minister initially said that it will only relate to an area beside a designated area.

It relates to any area. These provisions already apply to car parks in designated areas. Designation has enhanced the value of land in site value terms and the cost of the land may be too expensive to generate a reasonable return from a car park in normal circumstances. We have highly designated areas, many of which are very successful but which have no place to park cars and no surrounding multi-storey car parks. There is a narrow line in urban life which is caused by market price distortion and land on the wrong side of the line loses value. The purpose of this proposal was to allow a person build on that land and service the designated area. There is a need for off street car parking in the villages to which Deputy McDowell referred but this is constrained by certain issues.

What is the position in regard to Naas which does not have designated areas?

It will also apply there.

Multi-storey car parks must be constructed in accordance with guidelines circulated by the Minister for the Environment. Have these guidelines been drafted?

They are not in existence at present but they will be drafted.

In other words, the Department of the Environment will formulate guidelines to ensure uniformity in the construction of multi-storey car parks. People who construct other types of multi-storey car parks which are not in accordance with the guidelines will not be able to qualify for the tax breaks under this section.

They must also have certification from the relevant local authority.

Amendment agreed to.

I move amendment No. 37

In page 64, between lines 39 and 40, to insert the following:


(iii) by the insertion in the definition of ‘qualifying period' after ‘subject to section 39' of ‘and other than for the purposes of section 41B',".

Amendment agreed to.

I move amendment No. 38:

In page 69, between lines 14 and 15, to insert the following:

"(f) by the insertion of the following section after section 41A (inserted by paragraph (e)):

41B. —(1) In this section—

‘multi-storey car-park' means a building or structure consisting of three or more storeys wholly in use for the purpose of providing, for members of the public generally without preference for any particular class of person, upon payment of an appropriate charge, parking space for mechanically propelled vehicles;

‘qualifying multi-storey car-park' means a multi-storey car-park in respect of which the relevant local authority gives a certificate in writing to the person providing the multi-storey car-park stating that it is satisfied that the said car-park has been developed in accordance with criteria laid down by the Minister for the Environment following consultation with the Minister for Finance;

‘qualifying period' means the period commencing on the 1st day of July, 1995, and ending on the 30th day of June, 1998;

‘the relevant local authority', in relation to the construction or refurbishment of a multi-storey car-park, means the council of a county or other borough or, where appropriate, the urban district council, in whose functional area the multi-storey car-park is situated.

(2) Subject to subsection (3) and the modifications provided for in subsections (4) to (6), all the provisions of the Tax Acts (other than section 40) relating to the making of allowances or charges in respect of capital expenditure which is incurred on the construction or refurbishment of an industrial building or structure shall, notwithstanding anything to the contrary therein, apply as if a qualifying multi-storey car-park were, at all times at which it is a qualifying multi-storey car-park, a building or structure in respect of which an allowance falls to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter II of Part XV, or Chapter I of Part XVI, of the Income Tax Act, 1967, by reason of its use for a purpose specified in section 255 (1) (a) of that Act:

Provided that an allowance shall be given by reason of this subsection in respect of any capital expenditure which is incurred on the construction or refurbishment of a qualifying multi-storey car-park only in so far as that expenditure is incurred in the qualifying period.

(3) In the case where capital expenditure is incurred in the qualifying period on the refurbishment of a qualifying multi-storey car-park, subsection (2) shall apply only if the total amount of the capital expenditure so incurred is not less than an amount which is equal to 20 per cent. of the market value of the qualifying multi-storey car-park immediately before the said expenditure is incurred.

(4) For the purposes of the application by subsection (2) of section 254 of the Income Tax Act, 1967, and section 25 of the Finance Act, 1978, in relation to capital expenditure which is incurred in the qualifying period on the construction or refurbishment of a qualifying multi-storey car-park—

(a) the said section 254 shall, notwithstanding section 22 of the Finance Act, 1991, have effect—

(i) as if, in paragraph (a) of subsection (2A), the reference to ‘the 1st day of April, 1991' (as provided for in section 50 of the Finance Act, 1988) were a reference to ‘the first day of July, 1998',

(ii) as if paragraph (aa) (inserted by section 74 of the Finance Act, 1990) of subsection (2A) were deleted, and

(iii) as if subsection (2B) (inserted by the said section 74) were deleted,


(b) the said section 25 shall have effect—

(i) as if paragraph (b) (as amended by section 76 of the Finance Act, 1990) of subsection (2) (inserted by section 48 of the Finance Act, 1988) were deleted, and

(ii) as if subsection (2A) (inserted by the said section 76) were deleted.

(5) Notwithstanding section 265 (1) of the Income Tax Act, 1967, no balancing charge shall be made in relation to a qualifying multi-storey car-park by reason of any of the events specified in the said section 265 (1) which occurs—

(a) more than 13 years after the qualifying multi-storey car-park was first used, or

(b) in a case where section 26 of the Finance Act, 1991, applies and has effect, more than 13 years after the capital expenditure on refurbishment of the multi-storey car-park was incurred.

(6) (a) Notwithstanding subsections (2) to (5), any allowance or charge which, apart from this subsection, would fall to be made by reason of subsection (2) in respect of capital expenditure which is incurred on the construction or refurbishment of a qualifying multi-storey car-park shall be reduced to one-half of the amount which, apart from this subsection, would be the amount of that allowance or charge.

(b) For the purposes of paragraph (a), the amount of an allowance or charge falling to be reduced to one-half thereof shall be computed—

(i) as if this subsection had not been enacted, and

(ii) as if effect had been given to all allowances taken into account in so computing that amount.

(c) Nothing in this subsection shall affect the operation of section 265 (5) of the Income Tax Act, 1967.

(7) For the purposes only of determining, in relation to a claim for an allowance by virtue of subsection (2), whether and to what extent capital expenditure incurred on the construction or refurbishment of a qualifying multi-storey car-park is incurred or not incurred in the qualifying period, only such an amount of that capital expenditure as is properly attributable to work on the construction or refurbishment of the qualifying multi-storey car-park which was actually carried out during the qualifying period shall (notwithstanding any other provision of the Tax Acts as to the time when any capital expenditure is, or is to be treated as, incurred) be treated as having been incurred in that period.

(8) Where, by reason of subsection (2), an allowance is given under Chapter II of Part XV, or Chapter I of Part XVI, of the Income Tax Act, 1967, in respect of capital expenditure which is incurred on the construction or refurbishment of a qualifying multi-storey car-park, no allowance shall be given in respect of that expenditure under the said Chapter II or the said Chapter I by reason of any other provision of the Tax Acts".

I must ask the Minister to move the amendment to amendment No. 38.

I move the amendment to the amendment by the insertion of the words "two or more storeys" for the words "three or more storeys".

Does that answer my question on developments which extend outwards?

Yes, that is why I amended the amendment.

Are developments which extend into rivers included?

No, and planning permission for that sort of nonsensical development should not be granted in a wonderful city like Waterford.

It has greatly enhanced the shopping area.

There is plenty of unutilised land behind it.

We would not allow such development on the river.

Amendment to amendment agreed to.
Amendment No 38, as amended, agreed to.

I move amendment No. 39:

In page 69, to delete lines 15 to 38 and substitute the following:

"(f) in section 42 (1)—

(i) in the definition of ‘qualifying lease', by the insertion after ‘in the qualifying period' of ‘, or, in the case of a qualifying premises which is such a premises by virtue of being a building or structure of the type referred to in subparagraph (iv) of paragraph (a) of the definition of ‘qualifying premises', in the period commencing on the 1st day of July, 1995, and ending on the 30th day of June, 1998,', and

(ii) in the definition of ‘qualifying premises'—

(I) by the deletion of ‘the site of which is wholly within a designated area and',

(II) by the insertion in subparagraph (i) of paragraph (a) before ‘which is a building or structure' of ‘the site of which is wholly within a designated area and',

(III) by the insertion in subparagraph (ii) of paragraph (a) before ‘in respect of which an allowance falls' of ‘the site of which is wholly within a designated area and',

(IV) by the insertion of the following subparagraph after subparagraph (ii) of paragraph (a):

‘(iia) the site of which is wholly within an enterprise area and in respect of which an allowance falls, or will, by virtue of the said section 19, fall, to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter II of Part XV of, or Chapter I of Part XVI of, the Income Tax Act, 1967, by reason of section 41A, or',

(V) in subparagraph (iii) of paragraph (a)—

(A) by the insertion of ‘the site of which is wholly within a designated area' before ‘which is a building or structure', and

(B) by the insertion of ‘or' after ‘the Income Tax Act, 1967,‘,


(VI) by the insertion of the following subparagraph after subparagraph (iii) of paragraph (a):

‘(iv) in respect of which an allowance falls, or will, by virtue of the said section 19, fall, to be made for the purposes of income tax or corporation tax, as the case may be, under Chapter II of Part XV of, or Chapter I of Part XVI of, the Income Tax Act, 1967, by reason of section 41B,',".

Amendment agreed to.

I move amendment No. 40:

In page 69, line 47, to delete "paragraphs (c), (g) and (h)" and substitute "paragraphs (a) (iii), (c) and (f), subparagraph (i), and clauses (V) (B) and (VI) of subparagraph (ii), of paragraph (g) and paragraphs (h) and (i)".

Amendment agreed to.

I move amendment No. 41:

In page 70, between lines 2 and 3, to insert the following:

"(c) Paragraph (f), and subparagraph (i), and clauses (V) (B) and (VI) of subparagraph (ii), of paragraph (g), of subsection (1) shall apply and have effect as on and from the 1st day of July, 1995,".

Amendment agreed to.

I move amendment No. 42:

In page 75, between lines 21 and 22, to insert the following:

"46.—(1) In this section—

‘marketing costs' means any direct costs incurred solely in the promotion of products or services outside the State which are deducted in computing the amount of profits or gains chargeable to tax under Schedule D;

‘training costs' means any direct costs incurred solely in the provision of training to employees for the maintenance or improvement of job skills and which are deducted in computing the amount of profits or gains chargeable to tax under Schedule D.

(2) Where, in the computation of the amount of the profits or gains of a trade or profession, a person is, apart from this section, entitled to any deduction (hereafter in this subsection referred to as ‘the first-mentioned deduction') on account of marketing costs or training costs, he shall be entitled in that computation to a further deduction equal to the amount of the first-mentioned deduction.

(3) Any claim under this section shall be made in such form as the Revenue Commissioners may from time to time prescribe.".

This amendment which I moved on Committee Stage seeks to give a double deduction in respect of companies who increase their marketing or training. In regard to marketing costs, there has been considerable emphasis in recent years on Irish companies going abroad. Various schemes introduced by An Bord Tráchtála have been very successful. During the past number of years the Irish economy has been export led. Our total exports in 1995 will be of the order of IR£20 billion. If I recall correctly, about £4.6 billion relates to indigenous companies, the balance being from the multinationals. Enormous effort has been put in by Irish companies. The Government has spent not only Exchequer funding but mostly European funding in producing the very progressive proposals introduced by An Bord Tráchtála. I was fortunate to be the Minister responsible for that area for the past two years and it has worked successfully.

It is doubtful whether in this day and age people will go into a job at 18, 19 or 20 years of age and remain there for the rest of their lives. There is a constant need for training and retraining. In the marketing and training area there will be no great loss to the Exchequer in the long term if a tax break encourages companies to spend more of their own money in that area because the long term spin offs to the State will be (a) in increased jobs when the firm does better, resulting in more taxation to the Exchequer and (b) more profits will be made by the company, thus resulting in more corporation tax and income tax to the State.

It is to encourage companies to invest more money in marketing and training that I suggest a company should get a double tax allowance for expenditure incurred. I was particularly taken by this idea when I was Minister for Tourism and Trade because, despite the best efforts in the world — and my views on marketing tourism are well known — myraison d'être was to get companies involved in tourism to spend their own money because there is a tremendous reliance in that industry on the State doing everything.

Under the operational programme for tourism, which I introduced last year, considerable funding is available for marketing in the tourism area. A considerable amount of tourism money could be drawn down if the companies go about spending their own money. To kick start that area I was taken with the idea of a double marketing allowance. It is very simple. If a company, subject to the normal constraints spent, say, £50,000 in the marketing and training area the tax computation which it would prepare for the Revenue Commissioners would be doubled making it £100,000 of a deduction against profits.

The take-up in the initial years would not be too heavy a burden on the Exchequer. It is not a grant, it is merely using the corporation tax rules and the expense rules to double up on the allowance. It would allow companies in the tourism area and in the hotel business to come together and start putting up their own moneys to bring tourists into the country, it would be a further initiative. I suggest we try it for a number of years. The amendment I put down on Committee Stage, and repeated here, is open-ended and I thought I would be able to convince the Minister that it was a workable idea. The same arguments apply in regard to the training area. This is something the Minister should consider as it would be of considerable benefit.

I wish to inquire of the Minister whether, if I went to my cubbyhole now I would get the amendment to section 171 because it is now 20 hours away from the guillotine.

It would be very close. Unfortunately, there are complexities in that lawyers can seldom agree on the same thing.

The Minister was looking at a document which looked suspiciously like——

I think it is in circulation. I cleared it before I came back in at 2.30 p.m. I was told it would be circulated around 5 p.m.

The point in the amendment is interesting but I am not sure that the difficulties which Irish industries experience are simply related to a lack of expenditure on marketing or for that matter inadequate levels of training. The problems are a good deal more complex and deep than that. One of the problems which Irish companies have in relation to penetrating international markets — what Deputy McCreevy has in mind — is the size of Irish companies.

Broadly speaking they are much too small to make an impact internationally. If we are to improve the extent to which we can export we need to be able to put together much bigger companies. That is particularly true in the case of the food industry. Irish food companies are much too small to make the type of impact needed and to develop the type of brands which will gain widespread recognition in supermarkets right across Europe and in the developed world.

While this amendment is interesting it will not necessarily achieve the purpose for which it is designed. There is already a whole host of marketing agencies: Bord Fáilte, An Bord Bia, Córas Tráchtála and so on which are spending huge sums of money in marketing Irish products and encouraging Irish companies to develop new markets. In terms of Deputy McCreevy's objective the primary factor is that Irish companies are not big enough to make the necessary impact. There is a gross deficiency in indigenous companies in respect of any real commitment to research and development and more is the pity.

I am not prepared to accept this amendment on cost grounds and on the basis — as the Deputy will be aware when we spoke about this on Committee Stage — that a White Paper on training is in preparation in the Department of Enterprise and Employment. The Deputy's comments related more to marketing than to training although there is a connection. In that context I should say that this year between Bord Fáilte, SFADCo and the Exchequer we will provide funding of some £20 million in tourism promotion expenditure. An additional sum of £20 million will be available through the operational programme for tourism. In addition, An Bord Tráchtála will spend £41.6 million on trade marketing promotion, of which £12.5 million will be paid by way of direct grants. CERT will spend £12.2 million in training this year and FÁS will spend of the order of £10 million in industry based training. IDA-Forbairt will spend some £10 million on training grants. The gross sum is substantial. The proposal is premature as I would like to see what the White Paper says in relation to it. I recognise the validity of the arguments. I have a budgetary framework within which I can move this year and, quite frankly, I cannot allow any more.

I take the Minister's point. I am aware of the figures he has given for funding. I was responsible for both those areas. The point made by Deputy Upton is relevant. The operational programme for tourism — which I had the pleasure of launching last year — was part of the billions from the EU. I will not be specific about the figure because we had enough difficulties with it. Part of that total figure, whether it was £6 billion, £7 billion of £8 billion——

It was a lot of money.

Most of the money that will be spent on tourism in the next number of years will come from the EU. Some will be channelled through Bord Fáilte, some through SFADCo and some through CERT. The same proportion of money spent by the Irish Trade Board in the next few years will come from the EU. There are peculiar accounting methods which we have discussed in other contexts which I would like to see universally applied. I have given some ideas to the Minister that people in the Department of Finance might find attractive. These relate to how the agencies will receive money in an open and transparent manner which is not evident at present because various funds are treated differently. The moneys we will spend in trade, tourism and training will come largely from the EU with some Exchequer contributions. However, the end of this decade will see the end of the European gravy train. It is not that there will be no funds from Europe in the next millennium, but they will not be in the same proportionvis-à-vis the Irish economy and our gross national product as in the past. At that stage Irish companies in business, tourism or training will have to stand on their own. My experience in tourism and trade has been that many companies in tourism have a mindset that is reliant on the State agencies which, no matter how good they are, will not have money to channel into those areas. No matter who the Minister for Finance and no matter what shade the Government, they will not be able to supply large amounts of money. The same applies to the trade and training areas. What we must do in this time span is alert everybody to start looking after themselves. As Deputy Upton said, Irish companies are not large enough to offer their own direct marketing campaign, but there are EU schemes and funds available to groups of companies who come together. The purpose of my amendment is to encourage companies to think about standing on their own. We are into the second half of the decade and other events will intervene — the next election is just around the corner.

It is 110 weeks away, to be precise, and will take place in the middle of June 1997.

The Minister and I set that date between ourselves a long time ago. I am glad to note the Minister is keeping to it.

I am working to keep to it.

I can see the Minister has much work on his hands in that regard. I hope he will have more success than he and I had in the last administration.

Once we come to the end of December 1996 it will be a sprint to the finish.

I will take on board what the Minister says and withdraw the amendment but I would like to think he will reconsider it next year. The cost to the Exchequer would not be astronomical because the number of companies taking it up would be quite small and it could be ring-fenced to make sure it could not be abused. We want to encourage companies to recognise what the realities will be at the end of this decade and get used to the fact that the helping hand of the State will not, with the best will in the world, be able to fund at the levels it can now do with the help of EU funding.

Amendment, by leave, withdrawn.

Acting Chairman

Amendments Nos. 43, 77a, 77b, 77c, 77d and 78a form a composite proposal. Amendments Nos. 44 and 79 form a related composite proposal. Amendments Nos. 45 and 80 form a further related composite proposal. Amendment No. 78 is related. It is therefore proposed to take amendments Nos. 43, 44, 45, 77a, 77b, 77c, 77d, 78, 78a, 79 and 80 together by agreement.

Bill recommitted in respect of amendment No. 43.

I move amendment No. 43:

In page 75, line 40, to delete "or VII" and substitute ", VII, VIII, IX, X, XI, or XII".

I am reminded of Deputy Sheehan's contribution in regard to the airwaves. I happen to be regular listener to Radio 4 and I feel as if I am about to embark on something like the shipping forecast.

Notwithstanding our great friendship over the years, can the Minister tell me why Naas is not included as a seaside resort? It is the least the Minister could have done after all our times together both in this and in the last Government.

It was not for the want of trying.

The Liffey flows quite near Naas and it touches the sea in Dublin.

Acting Chairman

The Deputy is out of order.

We actually sent somebody down to Naas to see if the Grand Canal ws tidal at that point, but I regret to inform the Deputy that it was not. On the basis the town failed, but only just.

Deputy McCreevy will be familiar with this proposal. It was brought in on a pilot basis and restricted originally to the West Coast. Courtown was included following representations. Then, for the sake of equity it was decided to "give one to every county in the audience". On a more serious note, it is a pilot scheme and the take up on it may be insignificant in some areas — we do not know. There was much representation in relation to Salthill. We looked at the proposals but the original Salthill area was far too large and there was a dispute as to whether it qualified as a traditional seaside resort town. It traditionally had the role, and I was a visitor there on many occasions. It is now part of the suburb of a university town and much accommodation is taken up by students.

It was argued that Galway should get a place and that the area we are now proposing in Salthill was one of seven or eight areas identified by the consultant's report. It comprises the seafront, the leisureland complex owned by the local authority and some other land. Clonakilty is in West Cork which touches the sea, and that is why it is included. The Laytown, Mosney and Bettystown area is a traditional seaside resort. Clogherhead is a traditional but now run down seaside area. Likewise Enniscrone is off the main road. It is an area I know and it qualifies in addition to the ones already qualifying. I have nothing further to add to that except that Arklow was already proposed and the areas are quite tight in relation to Arklow.

It would be churlish of me, in the absence of Deputy Molloy, not to thank the Minister for making this partial gesture in the Salthill area. Half a loaf is better than none. When the Deputy moved the amendment on Committee Stage I thought he did so with a passion and a fervour which was not justified bearing in mind the cynical stare he received from the Minister at the time. It now transpires that those who ask receive. I am delighted for him and other Deputies, including Deputy McCormack who was of great assistance to him on Committee Stage, that the Minister has made this move to include coastal Salthill in the scheme.

While it can be said that portions of Salthill — I attended a meeting there recently — are now suburbs it is equally true to say that other portions are very much dependent on the hotel business. There are areas of Salthill where hotels are shoulder to shoulder with another. The sad fact is that many premises have effectively been decommissioned as hotels. While I accept that many students live in the area I hope there are not too many of them in the town during the summer months when this provision will come into its own.

I thank the Minister for responding in a generous way to the case made by all the Deputies who represent County Galway, not just west Galway, for the inclusion of Salthill. Last September or October — the Minister will correct me if I am wrong — Deputy McCreevy when Minister for Tourism and Trade suggested in an informal way that there should be such a scheme to complement what was being done in urban areas. He felt that many of the traditional seaside resorts were dying for want of investment. The three areas mentioned at the time were Salthill. Bray and Ballybunion. I am delighted that two of them have been included. I am sure the Minister considered the possibility of including Bray. Perhaps he will respond to Deputy McCreevy's amendment.

Salthill was always a traditional location for family holidays; parents always felt that it was safe to bring their children there and they always knew where they were. Deputy McDowell is correct in saying that the vast majority of premises along the seafront are hotels. Many premises are no longer being run as hotels because they were owned by families who did not have the money to reinvest in the business or who were not making enough profit during the relatively short tourist season to be able to reinvest a sufficient amount.

Salthill Development Association submitted an application and made a strong case long before this or previous budgets were presented in the House. It put a comprehensive package together in the hope that financial support would be made available to the area.

It has been to the disadvantage of Salthill in recent times that the area designated for urban renewal in Galway city has done extremely well. When the inner parts of the city which were run down were designated there was a phenomenal take-up. Visitors to the city can be very proud of the leading role played by the local authority, Galway Corporation, in encouraging developers and those wishing to invest in the city. We can be proud of the fact that we do not have a concrete mass of offices or retail premises. With Deputy McCormack I was a member of the corporation when it insisted that residential accommodation should form part of each development. As a result we now have a living city. Up to then the inner city had been neglected.

I would like to see the same happen in Salthill. The Minister will find that the people of Salthill and developers in the Galway area will not be found wanting in responding to this gesture. Salthill has lost out in terms of business because people were inclined to be drawn to the inner city which now has a pleasing ambience. This decision to include Salthill will mean that the tremendous work which has been done by the corporation in recent years on the promenade will be complemented by local business people reinvesting in their businesses knowing that they will receive support under this Finance Bill.

I thank the Minister for his generous response to the points of view expressed by Deputies on Committee Stage.

The people of County Louth are glad that the Minister has seen fit to include the village of Clogherhead, which he described as a rundown tourist location, in this scheme. That is not an unreasonable description.

It was not my intention to be offensive.

I accept that. The village urgently needs to be rejuvenated and I hope designation will help considerably in this regard.

The Minister is more than familiar with the geography of County Louth. I wish to make a case for the inclusion of a number of seaside resorts in the northern half of the county — Clogherhead is on the southern tip. As the Minister will be aware, Omeath was the mecca for day trippers in the 1950s and 1960s. Unfortunately, this business dried up in the 1970s to the 1990s. It was mainly people from Northern Ireland who visited locations such as Clogherhead and Omeath on holiday.

To buy butter and drink on Sundays. I was with them in the 1950s although not to drink.

That is an over simplification. The economy of Omeath benefited considerably from their presence. They came in droves on a regular basis. Unfortunately, this business has disappeared. As a consequence the business structure is now in decline. Omeath is a beautiful village at the foot of the Cooley Mountains near Carlingford Lough. There is a clear need to provide incentives and an innovative scheme would be of enormous benefit to that village. It would be a pity if it was not included in the scheme. Its inclusion would be immensely appreciated.

In making the case for Omeath I am not overlooking the importance of villages such as Carlingford and Blackrock, the home of my constituency colleague, Deputy Ahern. In their own way they have also been a mecca for day trippers. Tourism particularly in Carlingford has been developed. There is a strong community spirit and its achievements are an example to other areas. This shows what can be done when people come together, organise and participate in the tidy towns competition in particular. Carlingford was the overall winner in 1988. This provided a stimulus for the development of tourism. We need to ensure that we maintain the momentum.

The designation of various towns will provide a dynamic for the development of the tourism industry. This is urgently needed. The potential of the tourism sector in County Louth has been hindered because of its geographical location close to the Border and the impact of the troubles in the North in the past 25 years. The opportunity now exists to provide a dynamic in the locations I have mentioned.

I am delighted that the Minister has agreed to include Clogherhead in the scheme. It is an area with immense potential, an area which people visited in the past, I hope the urgently needed developments will be set in train as a result of this decision. I am disappointed the Minister is shaking his head to indicate it is not possible to consider the other places for designation at this stage. Perhaps he will elaborate when replying.

We have reverted to Committee Stage for this group of amendments, not Second Stage, and Deputies should remember that.

It would be remiss of me not to thank the Minister and welcome the fact that he included Bettystown, Laytown and Mosney in this section. On budget day I heckled the Minister when he mentioned the list of resorts designated and asked him if he was aware there is an east coast. I am glad he has included not only the three areas I mentioned in County Meath, the only stretch of beach in that county, but other resorts. That will be welcomed by everybody. I am particularly pleased with the designation of Bettystown, Laytown and Mosney. Laytown and Bettystown have suffered in the last 20 years from a downturn in the tourism industry, not only because of the difficulties in the North but because of general dilapidation. This measure will assist these areas and boost tourism, and I express my appreciation to the Minister for including them.

I thank the Minister for including a substantial area of Salthill in the areas for special grant aid. I thank Deputy Geoghegan-Quinn and other Deputies in the area for supporting me in the campaign in this regard. Despite an attempt by another Deputy last week to embarrass me, I was determined to continue pushing this matter. I am glad that after five months in Government we succeeded in having Salthill included in the designated areas.

Thanks to Deputy Molloy.

He is down there handing out press releases.

I have been in the Oireachtas for eight years and I hope I have made achievements in the short period my party has been in Government.

The Deputy's colleagues in the other parties are working hard for him.

The Deputy in possession should be allowed to continue.

I appreciate all the help I get. The Salthill 2000 Committee invested its own money in preparing an extensive report on potential development in the area. I was lucky enough to persuade the Minister for Tourism and Trade, Deputy Enda Kenny, to meet this group and he was very impressed with its submission. Despite what Deputy Geoghegan-Quinn said, the Galway inner city development helped our case because Deputy Kenny was very impressed with the work done by the people in that area which is also designated. I have no doubt that the people of Salthill will maintain the same high standard in availing of the tax relief for seaside resorts. I thank the Minister publicly and appreciate all the help I received in this regard.

I compliment the Minister for making a number of amendments to the scheme announced in the budget. I particularly welcome the inclusion of Clogherhead, an area that deserves designation. I am surprised, considering the Minister's roots in my constituency, that he did not see fit to include areas in the north of the constituency such as Omeath. Despite the fact that I live in a seaside resort I have always said that Omeath is more deserving of designation than any other resort in the constituency because it is situated on the Border. Deputy Blaney, the longest serving Member of the House, asked in his budget speech why Omeath was excluded, particularly in view of the fact that we have peace. One of the main reasons Omeath suffered down the years was the violence in the North, which obviously reflected on the economy just south of the Border.

In the village of Annagassan on the east coast a very good local group has been successful in putting forward a project for the area. If that village was included the area would be much more viable. The village of Blackrock where I live a dormitory town of Dundalk, is a seaside resort. The swimming pool in the town which is owned by the local authority has lain derelict for a number of years despite efforts to restore it. Last week a proposal was put before the county council to allow developers to demolish it and build apartments on the site. If the Minister had seen fit to designate the village it might have helped in restoring the swimming pool.

The Minister and some of his party colleagues may be aware that Clogherhead pier is in danger of falling into the sea. Even though this matter may not relate to the section perhaps the Minister would consider it.

It is not often a County Louth Deputy has the opportunity to thank a Government for doing something for the wee county, but I unreservedly congratulate the Minister on designating Clogherhead which is badly in need of assistance. After eight barren years of Fianna Fáil rule during which the only announcement from Ministers was the odd song at Fianna Fáil dances, it is nice to see a positive measure for the county. Considering the Minister's relationship with County Louth and County Down——

——and the Deputy.

——I am not surprised he included Clogherhead. I hope in the next few years he will consider sympathetically the inclusion of Carlingford and Omeath. In the last 25 years Omeath has been virtually turned into acul-de-sac. People from the North did not visit the area due to the difficulties there. This once thriving and popular resort has virtually foundered. If ever an area deserved inclusion in this scheme this one does. The village of Omeath needs to be refurbished. I echo my colleague, Deputy Ahern's plea for something positive to be done for Clogherhead pier or otherwise it will disappear into the sea. During the past 25 to 30 years it has been the subject of 18 visits from Government Ministers of all hues and sizes who have made promises but have never returned. We need a pier in Clogherhead.

Unlike other Deputies I am somewhat disappointed because there was nothing in the bag for Waterford in this instance.

What about Tramore?

Tramore was already included. I commend the Minister for extending the number of areas designated under this scheme. When I spoke on this matter on Second Stage the Minister for Tourism and Trade was present and I made the point that from the Exchequer point of view I do not understand why it is necessary to exclude areas. The Minister said that even today we do not know the impact this measure will have on some areas, that it may be marginal or nil. Some areas will have the enthusiasm, co-ordination and structures and will probably do a good job. On that basis I made the point to the Minister for Tourism and Trade that this scheme should be open and include as many areas as possible. I spoke at some length on Second and Committee Stages about the inclusion of Ardmore in County Waterford about which I received representations. I thought I spoke most eloquently and was reasonably confident that if there were additions to the scheme Ardmore would be included for all the reasons I outlined. Ardmore led the way like a beacon in terms of what could be done in these areas. People in Ardmore worked hard for many years and despite many disappointments the town became a national tidy town championship title holder. Having achieved that, they are disappointed Ardmore is being excluded when there is an opportunity for investment and improvement in resort areas. I am disappointed that while the Minister added other areas to those designated under the Bill, he did not include Ardmore.

The same argument although in a different context could be made for Dunmore East, a beautiful fishing village in the southeast. One of the problems facing such an area is that substantial investment in hotels is needed. I commend the people who run the five hotels in that area for their efforts on behalf of the community to attract tourists. I have no doubt that hoteliers in the Dunmore East areas would have seized the opportunity presented by this scheme that could yield such benefits for that community. As the Minister is aware while the fishing industry struggles as it has during recent years, areas such as Dunmore East need to create new opportunities to generate income in the local economy. Tourism has been one of the key areas targeted by Dunmore East for investment. Indeed the village did extremely well as a result of being the film location of a book written by Maeve Binchy, the name of which escapes me.


That film helped the area greatly. I know the local hoteliers, and the areas of Dunmore East and Ardmore and there is a definite willingness among the communities to invest in their areas. That is not to say that they have not invested in it in the recent past, but the catalyst needed to seriously upgrade those areas could have been the inclusion of Dunmore East and Ardmore in the scheme.

There was not any need to exclude areas under this section. A large number of areas could have been included without imposing a great burden on the Exchequer. I assure the Minister we will seek to amend the Finance Bill in 1996 to include those areas. I hope the designated resorts will avail of the opportunities provided for urban renewal under the section. It is a great opportunity for them and they have no excuse but to forge ahead and make the necessary investment.

With Deputy Nealon's approval I call Deputy Sheehan next. I remind him and other colleagues that we have passed Second Stage and we are on Report Stage.

I thank Deputy Nealon and the Chair for allowing me to say a few words of thanks to the Minister for including the urban area of Clonakilty and the greater part of the surrounding rural area in this beneficial scheme. I thought during my contribution on Second Stage that my list of 27 areas to be included under the scheme had fallen on deaf ears, but I must thank the Minister sincerely for including the townlands of Dunmore, Mucross, Lonagh, Drombeg and Pallas as well as the townlands of Clogheen, Inchydoney Island, Gallanes, Tawnies Lower, Tawnies Upper, Desert rural, Youghal rural and Miles. This is a step in the right direction. I hope as Deputy Cullen said, this important pilot scheme for the renewal of traditional seaside resorts is a forerunner of one that hopefully will include many more areas.

I understand tourism will be our main industry within the next decade. Every effort should be made to develop our facilities, make it attractive for tourists to visit this country and to ensure we benefit from that important industry. I hope the Minister will see fit in the near future to extend this worthwhile scheme to the majority of the areas I mentioned on Second Stage in my constituency of south-west Cork. We are not blessed with lush pastures where I come from.

You are not blessed with a Labour Deputy.

You were for a long time.

We have to rely on tourism for an income and if we do not have adequate facilities for tourists they will not visit our area. I thank the Minister for including these areas under the scheme. I hope he will not forget the other 26 areas I mentioned in south-west Cork in the next allocation of funds.

I welcome the addition of Enniscrone to the designated resort areas. We were all disappointed that Enniscrone and other resorts in County Sligo did not figure on the initial list. Enniscrone is one of the great resorts in the northwest. Like all traditional resorts for which this scheme has been designed, Enniscrone has to an extent faded away in recent times because of a change in tourist patterns. The local people made strenuous efforts to revive the area despite the change in tourist movements and did it with extraordinary success but they require additional assistance and are receiving it under this measure; the area will be transformed in a matter of years. The people of Enniscrone were resilient in the face of changing tourist patterns and the Northern troubles. As a result of the peace process many Northern people visited the area last Easter and I am sure the same will apply during the summer. I thank the Minister for selecting Enniscrone for the purposes of this Bill and for including the townlands of Carrowhubbock North, Carrowhubbock South, Frankford, Kinnard and Trotts in the district electoral division of Kilglass and the townlands of Bartragh, Carrowcardin, Muckduff and Scurmore in the district electoral division of Castleconnor. Since the announcement was made there has been a flurry of activity seeking further information about suitable projects under the scheme. It would be pointless introducing a scheme if nobody took advantage of it, as happened in some urban renewal areas, but the people of Enniscrone will take advantage of this scheme.

A large championship golf course was developed in Enniscrone in recent times. I invite the Minister for Finance and his colleague, the Minister for Tourism and Trade to visit the golf course next summer as my guest, and I will allow them win.

I do not know if the officials sitting in what is known as the "bull pen" would like to strangle or praise me for this idea. As the Minister for Finance stated on Committee Stage, I was the progenitor of this idea. During my time as Minister we made considerable progress in this regard, but we had not decided on the resorts to be included under the scheme. The idea was accepted by our colleagues in the Department of Finance and prior to the Finance Act, 1994 I endeavoured but failed to convince my colleague, the then Minister for Finance, Deputy Ahern, that this was a good idea. However, it was agreed later that a seaside resort renewal scheme would be beneficial. As many seaside resorts had become dilapidated I believed it would be a good idea to initiate a pilot resort renewal scheme based on the urban renewal scheme and particular resorts were selected for final approval before the budget.

While I welcomed the idea on budget day, I am sure the scheme will outlive its usefulness. The advice given to me and to the former Minister for Finance was that in initating such a scheme, regardless of the areas selected, others would also wish to be included. The Minister adopted the spirit of my idea and on budget day announced the seaside resorts selected for inclusion under the scheme and, while they differ somewhat from the resorts I selected. I accept it is the right of the Government to select its areas of priority.

If, like the urban renewal scheme, this scheme is extended to include all resorts it will lose its attractiveness, but undoubtedly the Minister was under pressure to extend it to all areas; it is the right of every Deputy to make the best case possible for his or her constituency. The scheme has been extended further in the past few hours. On Committee Stage I tabled an amendment to have it extended to Balbriggan and I have now tabled an amendment to have it extended to Bray. As children, my brothers and I were frequently brought to Bray where we had relations. It was a simple matter of travelling to Dublin and getting the bus to Bray, a town which has not benefited over the years from the explosion of tourist numbers. If too many resorts are included the scheme will not serve its purpose. It should be restricted to six or seven resorts, as announced by the Minister on budget day. While it may be successful in some areas, in two or three years' time we will not be able to judge its overall success and because of the explosion in tourist numbers some resorts will benefit regardless of the scheme.

Because people tend to take advantage of cheap air fares and go abroad on holidays the traditional seaside resort has lost its attractiveness. Why should a person take a seaside holiday in Tramore if he or she can take a flight costing a few hundred pounds to a sunny destination in Europe? I brought my children to Tramore on holidays for many years, but that resort has become very rundown and will welcome this scheme. With a three party coalition Government and the normal pressures on the Minister to extend the scheme, it was inevitable the list of resorts would be long. I welcome the inclusion of Salthill, a resort that should have been included at the outset. However, in order to be able to determine the effectiveness of the scheme I would have preferred if the Minister had confined it to six areas.

As the progenitor of the scheme I look forward to monitoring its progress over the next three years, but I am not sure how that will be done. No doubt each resort deserves to be included, but because so many have been selected, the usefulness of the scheme might be scotched.

Deputy McCreevy has the look of shock often displayed by progenitors of men when they realise they are about to become fathers of triplets or quadruplets. He has suddenly realised that he is more fecund than he thought and that all his offspring will be speckled around the coast.

The Joe Duffy factor.

This scheme cannot fail, but it will probably do better in some areas than others. However, one cannot buck the market. If certain types of holidays are on the way out no amount of tax assistance will make them attractive again. If people no longer feel that sitting on their deckchairs at the seaside in Bray is the way to spend their summer holidays no amount of tax relief on hotels in Bray will convince them otherwise. Perhaps the Minister should have initiated a tourism related project, not necessarily one that would qualify under a seaside resort scheme. The future of tourism in Ireland is not at the seaside. While seaside tourism is not on the way out, the days are gone when everyone got on the LNER train to Morecambe, sat on deckchairs on the beach, their heads covered in handkerchiefs knotted at the four corners. We should not cod ourselves about that. We cannot wave a magic wand over some areas if the tide has gone out permanently on them.

I too compliment the Minister for including in the scheme Achill. Mulrany and Westport. Achill was one of the prime tourist destinations in the past but it now urgently needs reinvestment. County Mayo lost a Dáil seat in the last general election and that reflects on all politicians. At one time, we had nine Deputies in County Mayo, we now have five and that speaks for itself.

I welcome the inclusion of the new areas in the scheme. I am sorry Deputy Molloy is not here because he did a lot of shouting across the floor of the House the day the announcement was made about Westport. However, although Westport is a good business town there are 1,500 people unemployed in the area. That is a major problem and it is essential that Westport gets this investment. The town did not benefit under the urban renewal scheme although other towns in the county availed of it. I have been a member of the urban council since 1979 and we have been demanding urban renewal status for Westport since that time. Ballina and Castlebar were granted urban renewal status but Westport was excluded. I congratulate the towns that have now been included in the scheme but it must be remembered that the people who will become involved in it will have to spend money to avail of the tax relief. In other words, they must make a profit. Deputy McDowell is correct when he says that the Government cannot lose on this.

I ask the Minister to include small towns such as Newport, Louisburgh and others, where there is no employment, in the scheme.

Belmullet, Enniscrone and all the other areas in my constituency should be included in the scheme also. I am concerned that there appears to be numerous schemes which benefit business people and those who have money. I understand the Minister has only a certain amount of money to go around but I ask him to consider those who have been severely disadvantaged, in particular young people who buy a second-hand house. They are not entitled to any grant-aid, they must pay stamp duty on the house and they do not avail of the first time buyer grant. I realise I may be digressing a little from the amendments——

The Deputy is digressing.

——but I want to make the point that there are too many schemes available for the people who have money. I want to see a scheme put in place next year that will benefit people who live in the country throughout the year. Perhaps the Minister will consider the establishment of such a scheme before next year's budget.

Because of their inclusion in the scheme, new life will be breathed into Achill and Westport. These areas need investment urgently and without this type of scheme, people would not come in and spend money in these towns. Deputy McCreevy attributed the establishment of the scheme to himself; Deputy Bertie Ahern was in my constituency some months ago and he said he initiated it and people who stood in by-elections seemed to be of the opinion that they initiated it. However, this Government delivered on it. I ask the Minister to include Newport and Louisburgh in the scheme next year.

I join Deputies who welcomed the inclusion of areas in their own constituencies in the scheme. I am particularly pleased that Bettystown, Laytown and Mosney will be brought into the scheme but I have some questions for the Minister. In regard to defining the boundary. I hope that Mornington and the Gormanston area will be included in the scheme. Laytown, which is one of the areas now being included in the scheme, is the venue for the only race meeting in this country that takes place on a beach. It is normally held in midsummer, this year's meeting took place last Monday. I hope the Laytown races will continue and that somebody will take on board the incentives in this scheme.

I understand the concerns of some Members in regard to broadening the scheme. However, this is one area that the Minister will be glad he brought into the scheme because there is a very active local development group in the east Meath area which has done a lot of work over the past number of years. This group will generate further enthusiasm in regard to the expenditure of moneys on the east coast. This is a particularly important area because it attracts many tourists from Northern Ireland and people from Dublin who only have to travel half an hour to reach the countryside. They can also visit the beaches at Laytown, Bettystown, Mornington and Gormanston. This area is the closest seaside resort for people living in the midlands and many families have caravans and mobile homes in east Meath. The additional facilities that will be provided from incentives in the scheme are long overdue and will be welcomed by all the people who use this resort.

This scheme will provide good incentives not just for the tourism industry but also for the building industry in the area. I am sure all Members will join in the welcome for the inclusion of this area in the incentive scheme.

Enniscrone is my local seasaide resort — it is approximately 20 miles from where I live — and I welcome its inclusion in the scheme.

Does the Deputy wish to declare an interest?

Yes, I have a great interest in it. People who wish to spend a day at the seaside go to Enniscrone. It has a beach which is approximately two and a half miles long, one can walk from the village of Enniscrone to Ballina and it is one of the most beautiful seaside resorts in the west. This resort will benefit greatly from its inclusion in the scheme. It has a beautiful 18 hole golf course——

And a racecourse.

——which many people from Dublin and other areas of the country use. Great work has been carried out in that golf course as a result of the allocation of lottery funding. The allocation of lottery funding to places like Enniscrone has been criticised in this House but I can vouch for the fact that it has resulted in great benefits for Enniscrone. The improvements in the golf course have resulted in more tourists visiting the town.

I thank the Minister for including Enniscrone in the scheme and I also thank Deputy McCreevy for initiating it. I know that the townlands included in it will benefit greatly.

I will try to reply to as many of the points as quickly as possible. While I accept Deputy McCormack's gratitude in respect of Salthill, my arm was effectively bent by my colleague in Cabinet, Deputy Higgins, who asked me to reconsider the submission in regard to it.

In response to the points made by Deputy McGahon and others with regard to Omeath, with which I am familiar from the time I spent in Warrenpoint as a youngster during August, attractiveness has waned considerably now due to free trade and the absence of the distortion the Border used to cause for day trippers travelling in both directions. The northerners came south to drink on Sundays and to buy butter and other items they could not get during the 1950s, the southerners went North to buy Mars bars, Spangles, bangers and other items that one could not get in the South.

I suggest to Deputies Kirk and McGahon, and all the Louth Deputies, that the Delors peace package proposal and the INTERREG would recommend that they encourage the Mourne and District Council in the North and the County Louth local authority to prepare an integrated tourism development plan for the Carlingford Lough area. There is probably more potential development capital available through that mechanism. For those Members who do not know the south Down area going up as far as Kilkeel, it leaves Wicklow in the shade as far as I am concerned. I do not wish to offend anybody in Wicklow, least of all the Leas-Cheann Comhairle——

There is a by-election coming up there.

——but it is a most beautiful part of the world that, tragically for southerners, has been out of bounds but I hope the peace process will change all that. In regard to Meath, I would say to Deputy McGahon that a jointly prepared tourism development plan is the way to proceed. I know there is co-operation between the two county councils and indeed with the Urban District Council in Drogheda. In regard to Deputy Wallace's point, I have the map for the area and while I cannot read the full list of townlands, because it is not completed, I see that the northern side of Bettystown goes up to almost the end of the golf course. I hope that answers the Deputy's query but I will make the map available to her later. I understand an explanatory memorandum has been circulated in that regard.

There is an argument — and Deputy McCreevy referred to this — that if we widen the urban designated areas too much, we will dilute their effect. That argument may seem valid but, on analysis, it is not because in widening existing urban areas in designated towns such as Dublin, the focus of concentration is diluted in a particular part of that town and very little benefit is gained as a result. In this case we came under enormous pressure to extend the scheme to different constituencies and the response from Deputies on all sides of the House is testimony to that. There is nothing wrong with that but I do not think a development in Clogherhead will necessarily compete with a development in Laytown or Courtown. It does not have the same effect as having two hectares in the centre of Galway and expanding it to ten hectares. There is still a point of focus in different parts of the country. A number have referred to the fact that it will depend very much on the quality of local leadership in the area and on the county councils. If I was a member of a local authority in any of those areas I would demand that the county manager in conjunction with the planning office and in consultation with local property owners and interests in the area, develop an integrated co-ordinated development plan for their area. Deputy Michael McDowell is right and I agree with him that the nature of tourism will change very rapidly. The traditional bucket and spade seaside resort is competing with very attractive guaranteed sunshine destinations in part of the Mediterranean. Unless there are additional activities, such as golf and other types of environment related activities, the traditional seaside town as a seaside town will not necessarily prosper.

There are requests for Ardmore, Bray and Balbriggan to be included which I am not accepting. Bray must be the only place in Ireland where one can go on holidays by DART. To suggest that we extend this pilot scheme for a seaside town which is effectively an operational suburb of the greater Dublin area is not credible. It already has urban designation status and I am not open to that suggestion for that reason. Likewise Balbriggan which is not yet as much a suburb of Dublin but the by-pass will resuscitate it considerably. I have also been lobbied on designating Lusk and other towns that might have benefited.

Laytown, Bettystown and Mosney are right beside it and I am familiar with that area having gone to school there.

We have gone as far as we can go. Natural market forces are driving up activity in places such as Balbriggan and Bray. We are trying to identify and resuscitate areas where the existing market forces have been weakened by other attractions. The areas have been included in a pilot scheme which will run for three years and we will have to see how it works out.

I am not prepared to accept amendments other than the ones I have brought forward.

Amendment agreed to.
Amendment reported.
Amendments Nos. 44 and 45 not moved.

I move amendment No. 46:

In page 76, between lines 6 and 7, to insert the following:

"47.—Section 15 (1) (e) (iii) (I) of the Finance Act, 1991 is hereby amended by the substitution of the following paragraph for paragraph (a):

‘(a) the operation of tourist accommodation facilities for which the Bord maintains a register in accordance with the Tourist Traffic Acts, 1939 to 1987, other than hotels, guest houses and self-catering accommodation, except that Bord Fáilte may at its discretion and subject to criteria agreed with the Minister for Finance, where the characteristics and tourist needs of an area so justify, admit a hotel, guest house or self-catering accommodation as a qualifying tourist undertaking which would obtain the same treatment as a holiday hostel,',".

I moved a similar amendment on Committee Stage. The purpose of this amendment is to permit in certain circumstances investments which will otherwise fall outside the BES category by virtue of the fact that they are physical assets such as buildings or land, to come within the scheme on the grounds they are tourism related and are approved specially for the purpose by Bord Fáilte. The purpose is also to introduce an element of flexibility in the provision of tourism schemes.

I said all I have to say on Committee Stage but I am moving the amendment again because it should not be allowed to drop out completely. I do not expect the Minister to give an extensive reply.

We can certainly look at how this may develop over the year but my position has not changed since the Committee Stage debate. I will not accept the amendment.

Amendment put and declared lost.

Amendment No. 47 in the names of Deputies Michael Ahern and Michael McDowell is deemed to be out of order as it does not arise out of Committee proceedings.

Amendment No. 47 not moved.
Amendment No. 48 is in the name of the Minister and amendments Nos. 50 to 52, inclusive, are related and it is suggested therefore that amendments Nos. 48, 50, 51 and 52 be taken together. Is that agreed? Agreed.

I move amendment No. 48:

In page 84, to delete line 38 and substitute the following:

"(ii) which, prior to the conversion, had not been in use as a dwelling.".

This amendment is a response to the constructive debate we had on Committee Stage and the problem we will have to increasingly address during the coming years, that is the under-utilised and potentially derelict space above shops in towns across the country. This is an effort to ensure section 23 type relief is capable of being given for the traditional three storey commercial building, where two floors used to be the residence of the shopkeeper and are now no longer so for all sorts of complex reasons. I am familiar with the problem from my time on Dublin City Council. Those buildings now need some kind of assistance to bring them back into economic life. As a result of the thrust of the debate on Committee Stage I am happy to table this amendment, as promised, to meet the concerns. Amendments Nos. 48, 50, 51 and 52 are related and they will address the concerns accurately identified.

On Committee Stage I tabled a similar amendment to amendment No. 52 and this made the debate possible. Do I withdraw amendment No. 52?

They are being discussed together and we will deal with it when we come to it.

My amendment comprehensively incorporates the requirements of amendment No. 52 and therefore amendment No. 52 is not required.

I thank the Minister for taking the idea on board.

Amendment agreed to.

I move amendment No. 49:

In page 88, line 35, after "dwelling" to insert "or for the purposes of compliance with the requirements of the local authority and fire officer for the area".

On Committee Stage I proposed that one would be entitled to a tax allowance where the local authority insists that the fire regulations be complied with, as that often necessitates expense. I felt it necessary to amend the Finance Bill to ensure that tax relief could be given for expenditure necessitated on foot of the fire officers' recommendations. We had a discussion about that on Committee Stage and the Minister said he would come back to it on Report Stage.

Having considered Deputy McCreevy's concerns, the amendment is not necessary because refurbishment work undertaken on a building to ensure it complies with the fire and safety requirements of a local authority would clearly be regarded as necessary to ensure the dwelling was suitable for use as a dwelling. Thus the expenditure on such work could be included in a certificate of reasonable cost and would qualify for relief.

I accept that.

Amendment, by leave, withdrawn.

I move amendment No. 50:

In page 89, line 10, to delete "there are two" and substitute "there is one".

Amendment agreed to.

I move amendment No. 51:

In page 89, line 13, to delete "two" and substitute "one".

Amendment agreed to.
Amendment No. 52 not moved.

I move amendment No. 53:

In page 94, line 11, to delete "38 per cent" and substitute "32 per cent".

I put this amendment down in conjunction with amendment No. 55 to express a view as to how the corporation tax system should be reformed. I identify with the Minister's view that the rate of corporation tax should be reduced to less than one-third as is the case in the UK. Amendment No. 55 is part of the same proposal. It is worthwhile giving a corporation tax break to small companies. Having thought about that and the possibility of different bands of corporation tax I was more attracted to the idea of simply giving them a tax credit. I put down those two ideas in the hope that they will be considered for next year rather than this year.

Amendment No. 54 is based on the same premise and we discussed it on Committee Stage. The effect of my amendment would be to reintroduce what was known as small companies corporation tax relief. As I explained on Committee Stage, I did not stay up half the night thinking how to word this amendment. It is a direct cog of the relevant sections which gave rise to that relief, with some changes to bring it into line with modern day practice. My proposal is that a lower rate of corporation tax should apply to companies with profits of £80,000 or less with a graded scale between £80,000 and £100,000 and the full scale to apply thereafter. We had a fruitful discussion on this.

For the moment we should deal with amendment No. 53.

Deputy McDowell moved the amendment to reduce corporation tax from 38 to 32 per cent and amendment No. 55 is another way of giving small companies tax relief. I said at the time that a more effective way would be to target companies rather than have a blanket reduction from 40 per cent to 38 per cent. It would not incur great expense to go for either small companies tax relief or designate specific types of companies which will qualify for the lower tax rate. I do not believe totally in applying the 10 per cent rate across the board. There are indigenous companies with employment potential which we should target.

The Minister could progress on that basis. He made a reasoned argument as to why he decided to reduce the rate from 40 per cent to 38 per cent this year. He may previously have been of the opinion that targeting was a better approach. I agree that it is a fine call and I have nothing against the principle of reducing the rate but I believe, and the Revenue Commissioners' records will show, that the cost of targeting will not be as great as I once thought it would be.

I have expressed an interest in this area for some time. I do not wish to rehash what I said on Committee Stage. We have a 38 per cent rate this year. There is an opportunity for targeting. All debates and reports state that job growth will be in small and medium-sized industries. Big companies, particularly those in the services sector, are shedding jobs. Small companies should be encouraged and one way to do that is to reduce the rate of corporation tax.

As a member of the National Economic and Social Forum I argued that just because there was a 10 per cent manufacturing rate I did not subscribe to the view that we should have a 10 per cent rate across the board. Every job created in the manufacturing sector has the capacity to create one or two other jobs in ancillary industries whereas the services sector does not have the same ratio of job creation.

As regards job creation I do not think it is of benefit to big institutions although it benefits those with large profits. It is legitimate to bring in a tiered rate of corproation tax which should be targeted. That should be done as a matter or urgency and the Minister will be commended for going in that direction next year when preparing the Finance Bill.

We have already had this debate. Reducing taxation for small companies is a blanket approach. We should differentiate between the types of company, age of the company and so on. I appreciate the co-operation of Deputies in their approach to the Bill. One of our great strengths over the years has been the certainty with regard to the 10 per cent tax regime. We are able to say to investors that this is fixed and guaranteed until the year 2010 and in the case of the IFFC to the year 2005. It is an extraordinary advantage in competitive terms for inward investment and a bonus for companies involved in forward planning. There should be a consensus on whatever changes we make in corporation tax and, once agreed, we should stick with it.

One of the few things of inestimable value to a Government, regardless of its political persuasion, that an open market economy can provide is a degree of certainty in the regulatory regime and the governance of the economy. That is why I indicated my policy in regard to the reduction of corporation tax from 40 per cent to 38 per cent over the next two years. If we cannot achieve this over three years we will do it over four or five years.

I am not disputing the merits of what Deputy McDowell proposed at the outset of the debate — it provides a degree of certainty and enables people to plan — but this proposal would lead to windfall gains and would not necessarily address all the issues. I will consider this point in the context of next year's budget and Finance Bill and I hope to introduce a provision which will enable us to have a comprehensive debate on the matter. I will ensure it is in such a form that it is owned by all of us and, therefore, will not become a football. Many companies suffer considerably by not knowing Government policy from one year to another.

How much would the measure have cost?

It would have cost £128 million in a full year.

Amendment, by leave, withdrawn.

I move amendment No. 54:

In page 94, between lines 17 and 18, to insert the following:

"55. —The Corporation Tax Act, 1976 is hereby amended by the insertion of the following new section after section 1:

‘1A.—(1) Where in any accounting period the profits of a company resident in the State do not exceed the lower relevant maximum amount, the company may claim that the corporation tax charged on its income for that period shall be calculated as if the rate of corporation tax for that part of the financial year beginning on 1st April, 1995 and each subsequent financial year were 25 per cent. (instead of being the rate fixed for companies generally).

(2) Where in any accounting period the profits of any such company exceed the lower relevant maximum amount but do not exceed the upper relevant maximum amount, the company may claim that the corporation tax charged on its income for that period shall be reduced by a sum equal to the following amount—

(M - P) × I/P

where M is the upper relevant maximum amount, P is the amount of the profits and I is the amount of the income.

(3) The lower and upper relevant maximum amounts mentioned in the foregoing subsections shall be determined as follows—

(a) where the company has no associated company in the accounting period those amounts are £80,000 and £100,000 respectively.

(b) where the company has one or more associated companies in the accounting period, the lower relevant maximum amount is £80,000 divided by one plus the number of those associated companies and the upper relevant maximum amount is £100,000 divided by one plus the number of those associated companies.

(4) In applying subsection (3) to any accounting period of a company, an associated company which has not carried on any trade or business at any time in that accounting period (or, if an associated company during part only of that accounting period, at any time in that part of that accounting period) shall be disregarded and for the purposes of this section a company is to be treated as an "associated company" of another at a given time if at that time one of the two has control of the other or both are under the control of the same person or persons. In this subsection "control" shall be construed in accordance with section 102.

(5) In determining how many associated companies a company has in an accounting period or whether a company has an associated company in an accounting period, an associated company shall be counted even if it was an associated company for part only of the accounting period, and two or more associated companies shall be counted even if they are associated companies for different parts of the accounting period.

(6) For an accounting period of less than twelve months the relevant maximum amounts determined in accordance with subsection (3) shall be proportionately reduced.

(7) For the purposes of the foregoing subsections the profits of a company for an accounting period shall be taken to be the amount of its profits for that period on which corporation tax falls finally to be borne, with the addition of franked investment income other than franked investment income which the company (if a member of the group) receives from companies within the group.

(8) For the purposes of this section the income of a company for an accounting period shall be taken to be the amount of its profits for that period on which corporation tax falls finally to be borne exclusive of the part of the profits attributable to chargeable gains; and that part shall be taken to be the amount brought into the company's profits for that period for the purposes of corporation tax in respect of chargeable gains before any deduction for charges on income, expenses of management or other amounts which can be deducted from or set against or treated as reducing profits of more than one description.'.".

Amendment put and declared lost.
Amendment No. 55 not moved.

I move amendment No. 56:

In page 94, to delete lines 18 to 24, and substitute the following:

"(1) Section 162 (as amended by section 48 of the Finance Act, 1990) of the Corporation Tax Act, 1976, is hereby repealed.".

This amendment is of interest to people who operate what are known as "close" companies. This provision was included in the tax Acts at a time when there was a considerable differential between the corporation tax rate and the high income tax rates. It was of benefit to journalists and television broadcasters who set up limited companies and acted as directors, thereby saving themselves a considerable amount of tax — the corporation tax rate was considerably lower than the personal tax rates. To deal with this tax avoidance measure the Revenue Commissioners introduced a surcharge on those companies, and it has remained in place ever since. On Committee Stage I suggested to the Minister that this provision was not worth a candle any more and the simplest thing would be to repeal the relevant section of the Act. The Minister said that he would examine the matter before Report Stage. The reasons I gave on Committee Stage for the removal of this provision are still valid.

Having examined the issue, I cannot accept the amendment for the following reasons. First, the main anti-avoidance purpose of the surcharge remains relevant. In the absence of the surcharge the attractiveness of the deferral of higher tax rates payable by shareholders in the receipt of dividends would be further increased. Profits retained in a close service company would be taxable at 38 per cent whereas if they were distributed to shareholders they would suffer an effective tax rate of 58 per cent when account is taken of both the corporation tax and income tax payable. It is reasonable to suspect that this deferral option would be availed of in preference to distributing profits by way of higher remuneration or dividends which would be immediately subject to the higher income tax rates in the hands of the recipient.

Second, the main argument put to me for the alleviation of the surcharge was that it was having a detrimental effect on the ability of service companies and, in particular, small service companies to build up adequate capital to meet their day to day needs. The changes in the Bill recognise that argument and reduce the impact of the surcharge, thus increasing the ability of companies to retain a higher level of resources for working capital purposes without incurring the surcharge penalty. Although the Deputies may have had different experiences, neither I nor my Department have received representations seeking the total abolition of the surcharge. This suggests that the companies affected accept that their problem has been recognised and acted upon.

I did not receive any representations either — I simply thought it was the best way of dealing with the matter. How much would the measure cost?

Approximately £200 million.

I am sorry the Minister cannot accept my amendment. If he and the Revenue Commissioners give further consideration to the matter, the Minister may see fit to repeal it in next year's Finance Bill.

Amendment, by leave, withdrawn.
Bill recommitted in respect of amendment No. 57.

I move amendment No. 57:

In page 95, before line 1, to insert the following:

57.—(1) In this section—

‘the agreement' means the agreement in writing dated the 16th day of May, 1995, between the Minister for Agriculture, Food and Forestry and the National Co-Operative for the provision of financial support for the development of agricultural services together with every amendment of the agreement in accordance with Article 9.1 thereof;

‘the commencement date' means the 12th day of December, 1994, being the date specified in the agreement as the commencement date;

‘a member co-operative', ‘the Minister', ‘the National Co-operative' and ‘society' have the meanings respectively assigned to them in section 52 (1) of the Finance Act, 1994.

(2) Notwithstanding any provision of the Corporation Tax Acts—

(a) a payment made under Article 3.1 (a) of the agreement by the Minister on or after the commencement date to the National Co-operative, and

(b) a transmission of monies under Article 3.4 in respect of payments under Article 3.1 (a) of the agreement by the National Co-operative on or after the commencement date to a member co-operative,

shall be disregarded for all of the purposes of those Acts."

This amendment proposes to insert a new section which follows closely on section 52 of the 1994 Finance Act. That section provided that certain payments made by the Minister for Agriculture, Food and Forestry under a specific agreement to National Co-operative Farm Relief Services Limited and grants made by that body to its members under the same agreement were to be exempt from corporation tax. This new section proposes to extend under a new agreement similar relief to the same bodies. The purpose of the new agreement is to create employment in the provision of agricultural services through the appointment of development officers. It has been decided to exempt from corporation tax payments made under clause 3.1 (a) of the new agreement by the Minister for Agriculture, Food and Forestry to the umbrella body, the National Co-operative Farm Relief Services Limited, in respect of salaries and expenses of development officers and payments made by that body under clause 3.4 of the agreement to its member co-opertives in respect of clause 3.1 (a).

I regret to say I have no idea what this is all about.

It exempts employment grants from consideration for the purposes of corporation tax.

What does the company do?

It provides farm relief services. It is not very active in Dublin south east.

It is not a State company.

It is a private company.

Amendment agreed to.
Amendment reported.

I move amendment No. 58:

In page 103, between lines 25 and 26, to insert the following:

"60—Section 39 (1A) of the Finance Act, 1980 is hereby amended—

(a) by the insertion of the following:

‘(c) artificial insemination (AI) production,', and

(b) by the insertion of the following:

‘(iii) in relation to artificial insemination as including references to artificial insemination production,'.".

Debate adjourned.
Debate adjourned.