The person who invests money or raises a loan, say, in the region of £400, will find that the interest on this is deducted from his income tax and he then qualifies for childrens' allowance. To me this makes this type of person a speculator in his own right. All of this encourages needless overspending and going into debt. It is a most unsatisfactory and unhealthy economic situation.
Young workers, many of whom are earning good wages, should be given an incentive to save, to invest, rather than to spend or to borrow. Nowhere can I see any such incentive in this Bill. Every effort should be made to impress on people the importance of saving both in the interest of the individual and of the nation as a whole.
Regarding the matter of encouraging young people to save it would be well to look into the matter of saving for house purchase. Where are the real incentives to this end? In this context it might well be asked whether our building societies are now performing the work they were instituted for. All building societies at their foundation had the characteristics of a co-operative effort. There was idealism in them and they set about in a practical way to make funds available, through the saving efforts of the participants, to young homemakers.
It seems to me that these societies, in growing, become more like financial concerns. They seem to be more interested in dividends to shareholders than in providing tolerable financial facilities and incentives for the young home builder. Any effort to set up—even in the smallest way— co-operatives for house building should be encouraged in every way by the State. Experts should be asked to apply themselves to the problem of rejuvenating societies which have grown into mere banking companies or, saving this, financial experts should apply themselves to seek out ways and means of setting up funds which would endeavour to do in the 1970s what the building societies did in the earlier decades of this century.
The Government have said they will provide something in the region of 25,000 houses in this year. I would strongly recommend to the Minister that he take careful note of the suggestion to remove the tax from office blocks provided the owner guarantees to allow 25 per cent of the area to be used as living accommodation for those in need of homes. This would be a much better social and financial investment than imposing a 15 per cent stamp duty on those buildings.
Another alternative to making enough houses available annually is the rising cost of building components. The VAT applies to all building components and the Government should seriously examine the possibility of exempting building components from this tax. Houses for people are such dire social necessities that everything which would possibly make the building of them in sufficient numbers a reality should be done. Would not the removal of VAT from building components help towards the proposed 25,000 houses this year? I sincerely think it would.
I would seriously ask the Minister to try to get the building societies functioning more efficiently. I said I believe there is this tendency for them to become more of a banking concern than a building society.
In his budget speech the Minister promised to look into money matters. Often when the one financial knotty problem which counts is highlighted he merely puts the solution on the long finger by saying that further study should be made or a White Paper should be issued. Too many promises cost more and more money but the knotty problem is: where will the finance come from? The job for any Minister for Finance is to see where growth is needed, where social aids are required, to apply the remedy to cure the situation and, at the same time, tell the people where he is getting the money from and show them that this money is really available.
On reading the Finance Bill, my feeling is that on the matter of financing, only a fraction of the pre-election promises of the Coalition Government seem to be put into effect. There have been too many promises about how this money is going to be raised. The Minister mentioned that he hoped to introduce soon a new unified structure of personal income tax with graduated rates which will take the place of the present dual structure of income tax and surtax. Also we had the pre-election commitment to abolish estate duty in its entirety. This has not been done. We have now been given more promises. There is the promise of a White Paper. The overall feeling of many people who look at the record of the present Government and this finance policy, in particular, is that there were too many pre- and post-election promises, pre-election promises about what they were going to do and post-election promises to bring in studies and White Papers which would show us how they propose to regulate spending and taxes. I believe that we now suffer from a pie-in-the-sky Government.
All these promises were made and we have had very little in this particular Finance Bill or, indeed, in the budget. It cannot be denied that there is positive proof that this Finance Bill and the budget are incapable of doing anything. I see nothing in the Finance Bill to regulate inflation. It deflates the buying power of the few pounds in the purses of the sick and the aged, the orphan and the widow. I see no evidence in the Finance Bill of the Just Society or of the truly social conscience.
There are bound to be financial implications in the coming years resulting from our entry into the EEC. Most people labour under the illusion that entry into the EEC has put money into the Irish worker's pocket. This is not the case. This cannot be done without more hard work. The incentives are there since we joined the EEC but we must work towards this end of increasing our incomes irrespective of what we work at. I believe that many adjustments will have to be made in our financing methods on our entry into the EEC. The present Bill should have done something about this. It should have recognised the evolving situation resulting from EEC membership. It has failed to do this. I should imagine that from now on amalgamations, take-overs and mergers will become part of our structure to gear ourselves towards the level of efficiency demanded in EEC membership. The Minister should explain fully the implications of the provisions made in section 38 of the Bill for carrying forward losses for tax purposes. I should like his assurance that these provisions will not interfere with the developments and changes and, indeed, interactions in industries consequent on entry into the EEC which are necessary if we are to succeed in the EEC.
There could be abuses in this section as carrying forward of losses for taxation could lead to what is known as loss-buying transactions. When the Minister legislates to stop this particular practice, we would like to be properly assured that the Minister does not also hinder desirable developments such as workers in a loss-operated firm taking over with a stake in the company, going ahead with the successful rejuvenating and running of that little company. We must always be careful in legislation concerned with ridding abuses that we do not also legislate to dampen much needed ingenuity and enthusiasm.
In conclusion, I should like to say I have directed my thoughts on the Bill towards this gigantic problem of inflation. I feel the Minister and the Government are failing miserably in curbing it. No meaningful effort has been made to remedy the situation. It seems to be getting out of control, particularly in recent months. The Government's economic policy is geared towards further inflation. Considering that it will take another 12 months, unless in the meantime we have another budget imposed on us in the autumn, I shudder to think of what the position will then be. The Government have failed completely to curb inflation. That is the gigantic problem that confronts the country at the present time.
