I find a certain amount of difficulty in understanding how wide or how narrow Section 3 is intended to be. The first sentence says that it relates only to commodities not produced commercially in the State in the 12 months ended 31st August, 1939. If that were taken just by itself, it would seem to me that the section was not going to prove nearly as helpful as it is possibly intended to be. It is quite possible that this section may be interpreted rather more widely, because, after all, it is mainly a section to give discretion to the Revenue Commissioners under certain circumstances. But, there is a certain amount of uneasiness—it has been expressed to me— that if it is not understood that it will be interpreted reasonably and with some breadth, it may prove a discouragement to certain manufacturers. It is quite clear that where a particular commodity was not manufactured before that date because it was not considered to be an economic proposition, and is now manufactured, because of scarcity, on an uneconomic basis, this section gives full discretion to allow any cost to be chargeable on assessment of income-tax.
It is not quite so clear, and possibly the Minister could help me in the matter, that where the commodity was manufactured or was available, but where the emergency or the war circumstances have forced it to be manufactured in a totally different way and by different means unlikely to be continued afterwards, the relief desired will be given. What I have in mind is this: you may have a certain commodity manufactured here and finished with a certain raw material. Machinery is available for the use of that raw material, but the raw material is now unobtainable, and alternative materials may be used, but they necessitate new machinery. The alternative proves not to be as good and the new machinery may become completely useless after the emergency. It seems to me that the cost of that machinery, in so far as it becomes useless afterwards, should be a charge over the period as depreciation, because it is in the public interest that the commodity should continue to be made, and we do not want to discourage anyone. You have another very simple illustration of the same thing in the case of a firm using motor deliveries. If it becomes undesirable, or impossible, to use petrol for the purpose of those deliveries, and if firms for the period of the emergency introduce horses and vans, the public will have to put up with the slower transport and certain inconveniences. Firms will be rather unwilling to do that if they find that the expenditure will be regarded as capital expenditure and could not be written off as soon as the vans become useless. That is a simple type of illustration. I have been asked by the Chamber of Commerce to raise this point, and to ask how far this section will be interpreted narrowly. One letter I had from a representative of the Chamber of Commerce mentioned a case where, in order to continue a particular type of manufacture, the manufacturer had to adopt a Heath Robinson type of machine, as he called it, which he would certainly abolish as soon as he could, although it is getting the job done.
On strict reading, I am not at all sure the section would meet his case, and if he did instal machinery of that kind it might happen to be regarded as capital expenditure. I think the Minister could help me with regard to that. There is also the case where a commodity was made before 1939 from raw materials and where the manufacturer has now to make the raw material. In that case I gave it as my opinion that the section would cover it, although in the previous case I was not at all sure it would.