Seanad Éireann debate -
Wednesday, 7 Nov 1951

Vol. 40 No. 2

Fógraí ó'n gCathaoirleach. - Local Government (Remission of Rates) Bill, 1951—All Stages.

Question proposed: That the Bill be now read a Second Time.

Minister for Local Government (Mr. Smith)

This Bill involves no new principle. The Bill proposes to apply, in respect of the erection, enlargement or improvement of residences completed before the 31st March, 1952, the two-third remission of rates for five years provided by the Local Government (Remission of Rates) Act, 1940, as extended by the Local Government (Remission of Rates) Act, 1950.

The remission does not apply in the case of houses erected by local authorities under the Labourers Acts and the Housing of the Working Classes Acts, houses in respect of which grants have been made under the Housing Acts or houses receiving remission of rates under the Housing (Gaeltacht) Acts. In effect, therefore, the type of house in respect of which this remission applies is the larger type which does not get assistance in any other way either from the State or the local authority. The number of houses of this type now being erected is very small.

The rates remission code has always been on a temporary basis. The parent Act—the Local Government (Remission of Rates) Act, 1940—covered the period up to 30th September, 1942. Since then the period has been extended by five continuing Acts similar to the present Bill. The last Act, the Local Government (Remission of Rates) Act, 1950— extended the period for completion up to 31st March, 1951. The period will, by this Bill, be further extended to 31st March, 1952.

Mr. Douglas

The principle in this Bill has been accepted as far as I know by all Parties. I do not think there can be any possible exception to its extension. I think the extension might have been for a five-year period. The only criticism I would have of the Bill is one of omission. An opportunity has not been taken to extend it. I think it should apply at any rate to improvements in business premises as well as in residences. There is a great deal of dissatisfaction all over Ireland—it is not confined to any part—that as soon as any improvement is made. I was going to say substantial improvement, but that would be wrong, there is a revaluation and the person or firm carrying out the improvement finds himself not only obliged to meet the costs of improvement but also an immediate increase of rates. There is an outcry against this but I am not sure it is fully justified. It seems to me that there ought to be some increase in rates if there are substantial improvements. I would suggest to the Government that the real grievance could be met by extending this Bill to increased valuations of all kinds. In other words, if there is an increase from £50 to £75 that increase should not operate for a period of five years or that there should be only a gradual increase over five years. That, I think, would meet the real hardship. I put that suggestion forward to meet a certain amount of dissatisfaction which exists. It seems to me that from a national and also from a municipal point of view it is good policy to encourage substantial improvements in business or industrial premises. At the moment, there is a tendency to repairs instead of alterations. Repairs will be allowed for income-tax if they are bona fide. There is practically no danger of increased valuation but once it comes to the stage of improvement, you may have to have it assessed for an increase and you are then certain to have to pay increased rates. The result is that there is a danger that some of our towns may not have the genuine structural improvements made which ought to be done. This would be in the interests of the ultimate collection of more rates. It is in the interests of Dublin Corporation to encourage such improvements as will increase the valuation. They will get more rates in the long run if they are not imposed for five years. I put that forward as a suggestion which, I hope, the Government will consider.

Mr. Summerfield

I would like to support Senator Douglas' suggestions in this matter. We hear a lot of talk about the effect on our economy of various theories but capital investment is something upon which we all agree, particularly if it is intended to be productive. Many of our newer industries need expansion. They are anxious to improve. If, as suggested by Senator Douglas, the Bill were extended to such industries where improvements were effected, it would mean that there would be a fairly considerable volume of improvement carried out without any delays in the capital improvement of our productive plant. I think, as Senator Douglas does, that in the long view it would pay the State and the local authorities.

Mr. McGuire

I would like to support the proposal of Senator Douglas, a proposal which has also been supported by Senator Summerfield. We hear a lot to-day about profits and about employment. It is obvious that if we are to have more employment there must be as much incentive as possible given to people to expand their businesses in every way, because expansion is necessary to create employment. We have only to read the newspapers to see the public interest in this matter of imposing higher valuations with consequent higher rates, on people who have the enterprise to extend their business premises and their plant.

I feel that this is a very important matter and I should like to see something done about it, because it has certainly been talked about for long enough. If something is done about it, there will be a greater incentive to people to improve their premises and there will also be an incentive to more people to do so and thus help to create more employment which is badly needed.

With regard to profits, we hear much talk nowadays about the State taking more from people's profits. The fact is that the State should take less in taxation from profits nowadays, and, instead of taking more money from people, should allow them to put the money back into the improvement of their premises. That is something which, I think, would be beneficial to not only property owners but to those in their employment.

Mr. O'Donnell

I want to support Senator Douglas and the other Senators from a different angle. It is quite obvious to anybody looking around the country to-day that a great deal of improvement of house property would have been carried out, were it not for the fear of increased rates. We see Dublin rather shabby at the moment, because people are afraid to improve their frontages because, immediately they do so, there is an increase in valuation. I know of cases of people who are afraid even to paint the front of their premises lest their rateable valuations be increased. Anything that will add to the general beautification, if one may so put it, of our country towns and cities will be helpful, and, as Senator Douglas has said, taking the long view, if people were able to feel that they could, with impunity and without penalty, improve their premises and make them more attractive, even from an architectural point of view, it would be good business to enable them to do so.

Mr. Quirke

A reasonably good case could be put up for the suggestion made by Senator Douglas and supported by other Senators, but, while some of the speakers may be excused on the ground of lack of experience, there is very little excuse for other Senators trying to bring a matter of this kind in on a discussion of a Bill like this. This Bill is quite obviously designed to deal with a certain type of residential property and if any Senator thinks, as apparently some Senators do, that the legislation should be extended to all kinds of property, such as factories of various types, I suggest that he should have thought of it a couple of years ago—and I am not talking politics—or else should deal with this Bill in the way in which it has been dealt with in the past and then, if necessary, bring in a special motion to deal with the other matter.

Mr. Douglas

On a point of explanation: this Bill originally included certain business premises.

Mr. Burke

That is precisely the point I wanted to make. Up to ten years ago, the legislation covered all the types of property which Senator Douglas mentioned. I have been a member of a corporation for very many years and this matter of the incidence of taxation in relation to persons who carry out improvements is a great deterrent. It has gone so far in the country that trades councils and other bodies have urged that this increased taxation should not fall immediately, and I think the Minister would be meeting the wishes of everybody interested in local affairs if he considered making a concession. Senator Douglas was very reasonable. He did not ask that the full concession made in past legislation be given, but suggested that, if the Government thought it too much of an impost, if the Minister for Finance felt that he could not carry the burden, he might spread it from year to year and thus lighten the drain on the Exchequer. It is well that we should encourage people to keep their property, their premises and their factories, in very efficient order. We hear a lot about productivity, but many industrialists are afraid that if they bring their plant up to date, it will involve them in a further weight of local taxation. That does not encourage the right type of saving or spending. The Minister now has the opportunity and we hope he will see his way to make some concession.

Mr. McGee

I want to caution the Minister to walk very warily in this matter because there are others besides those who are in a position to carry out improvements. The incidence of taxation will fall more heavily on those who cannot afford it than on those who are making a profit and for that reason I trust that the Minister will not go too far.

Mr. P.F. O'Reilly

At the risk of being told, quite rightly, that I have no experience of the Seanad, I venture to support the remarks of the other Senators who have referred to this matter of increased valuations consequent on improvement of premises. I must say, in fairness, that I realise that the matter is difficult. It must be a matter of great difficulty for the Minister's Department, but he is entitled to hear our views of this important problem. It is a matter of great public concern. It is, as has been said, unfair that people who, for reasons of pride in their premises or perhaps a desire to make more money, carry out improvements, should be penalised almost immediately. My suggestion is that any increased valuation following the carrying out of improvements should not become operative for a period of, say, five years from the date on which the new valuation is fixed. As Senator O'Donnell mentioned, it is hard that people who improve their premises should find that, because they have done so, perhaps on request by the corporation or local authority, they must pay substantially increased rates. Some years ago, a reduction was allowed in respect of valuations which were so increased. The matter is really very important and should get the consideration of the Minister as soon as possible. The public are seriously concerned about it and we are entitled to mention the matter to the Minister in the way in which we have mentioned it.

Mr. S.T. Ruane

In supporting the suggestion put forward by Senator Douglas, I should like to point out that the matter of increased valuation for many people means not alone a higher county rate but also higher charges for electricity, and, for those who have licensed premises, higher licensing charges. With the extension of rural electrification, many people in rural areas who might be inclined to make improvements are deterred from doing so not only because of the higher rates on an increased valuation but because of higher electricity charges.

Mr. Smith

No doubt a discussion covering the wide field travelled by Senator Douglas and the other Senators who have spoken would be very interesting, but it is not my function here to wade into that with them. The Long Title of the Act of 1940 which I am proposing should be continued makes quite clear what Senators are being asked to do here. That Long Title is: "An Act to give Partial Relief from Rates in respect of certain new enlarged and improved residences." To tell the truth, I am not a bit enthusiastic about its continuance either and, if it were not for the fact that there are some few people who started building operations at a time when they felt this rate relief would be available to them, I am very doubtful as to what my own attitude would be towards it.

It only refers to a very small number of buildings, for the erection of which the Department of Industry and Commerce issued licences. The view I take on this matter is that if there are people here who can afford to build houses for themselves, so spacious and so luxurious as not to qualify for the State assistance which is provided in the way of grants, it is a bit strange that we should come here—although they themselves were deliberately throwing aside moneys that were being provided to assist them in erecting these buildings—and ask the Legislature to relieve them of rates for a period of five years. It is with that reasoning running through my mind that I am not a bit enthusiastic about this proposal and were it not for the fact that they might be able to come forward and state that they thought they would be able to get this relief, the chances are that I would not be asking the Seanad to continue this measure for another year.

The other matters mentioned are not relevant to this proposal, but let me say this about them. When those engaged in business make the case that every time you make an improvement your rates go up and that that is in itself an impediment to those people engaging in that sort of activity, let me ask who is going to pay if progress does not. The public bodies want the rates and they have rising commitments every day. Is it not the case all down the way—it is the industrialists and the people in business that we are discussing now—that the people who pay income tax, the people who paint their doors and run their farms well, find at the end, when the State is making provision of a certain type for people of their class and age, that they are often told that because of their own industry they are debarred from receiving the generous benefits available to them otherwise? But look at it in the other sense—what is wrong with that? Both taxation and rates must be collected. Who can pay them but those in a position to pay, those who make progress?

While there may be in some instances —if we were to go into the general discussion here—a case to be made for rates relief in respect of certain industrial activities, it is no harm for us to remember that there is an excellent case to be made for not applying such a principle in a general way.

Question put and agreed to.

Agreed to take the remaining Stages now.

Bill put through Committee without amendment, reported, received for final consideration and passed.

Ordered: That the Bill be returned to the Dáil.