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Seanad Éireann debate -
Wednesday, 26 Jun 1974

Vol. 78 No. 8

Finance (Taxation of Profits of Certain Mines) Bill, 1974 (Certified Money Bill) : Second Stage.

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

This Bill is designed to repeal, with effect from 6th April, 1974, the 20-year tax exemption for profits arising from the mining of scheduled minerals and to replace the exemption, with effect from that date, by a scheme of tax allowances specially designed to meet the needs of the Irish mining industry and generally comparable with mining taxation systems in other countries.

The decision to withdraw the 20-year tax exemption and to replace it with a new scheme of tax allowances was taken by the Government only after a comprehensive study of mining fiscal policy in other countries. As Senators are already aware, an interdepartmental committee was set up in 1971 to review the taxation and royalty arrangements in relation to the exploitation of our mineral resources. It was envisaged that this review would assist in the formulation of a sound long-term fiscal policy for mineral exploitation which would give the State an equitable share of profits and which would at the same time be sufficiently attractive to mining companies to ensure the continued development of our mineral resources in an orderly and efficient manner.

Following this study the Government concluded that the 20-year tax exemption was unduly generous by reference to comparable concessions elsewhere and that it was no longer appropriate in the light of the present state of development of the mining industry in this country.

As a general principle, all profits arising in the State should be subject to taxation. Where the concept of neutrality in the taxation of income is contravened the cost of foregoing the revenue must be commensurate with the resulting benefit to the community and must be recognised as such. Senators will agree that any tax concessions given to an industry should be subject to the overriding criterion of optimum development of our national resources. Application of this principle implies that the fruits of exploiting our mineral resources which are wasting assets should be applied to the greatest extent possible for the economic and social development of our country. The retention of the 20-year exemption would not give rise to any benefits to the economy which would not accrue in its absence and there would be no offset to the cost of living of foregoing the revenue involved. In these circumstances the Government were duty-bound to act by recasting the tax concessions available in respect of non-bedded minerals in order to ensure that the fruits of exploiting our mineral resources would be applied to the greatest extent possible for the economic and social development of the country.

Senators will be aware that worldwide changes have occurred in recent years in the climate of public opinion and in the framework of Government policies within which the mining industry has to operate. Regardless of the terms of fiscal legislation when investments were first initiated many countries have subsequently taken steps to increase their revenue from mining, even to the extent in some cases of expropriation or nationalisation in order to meet national objectives. The mining industry, though multi-national in its organisation and outlook, is nevertheless a closely-knit one. All mining companies are conscious that the industry is operating in a highly sensitive area in exploiting the natural resources of host countries. It is clear from the mining Press and journals that the industry recognises the universal character of these new attitudes and has in fact come to terms with them and, with necessary adjustments in its programmes and methods, is working in a reasonably satisfied way in new conditions.

Apart from international changes in attitudes to the exploitation of natural resources the difficulty in meeting sharply rising demand for base metals has led prices to rise to record levels, with commensurate increases in mining companies' profits, which in Ireland have been completely free of tax up to now. World demand for base metals, the discovery of the Navan mine, which promises to be one of the largest of its kind in the world, and other mining developments and possibilities in Ireland have fundamentally altered the mining situation in this country and made a realistic reappraisal of the 20-year tax exemption imperative. It was inevitable in these circumstances that Irish public opinion should strongly react against the continued exemption from taxation of profits arising from the mining of non-bedded minerals. In the light of such circumstances, it was imperative that the mining industry, having reached its present state of development, should make an equitable and suitable contribution towards the ever increasing cost of promoting national development.

It must also be pointed out that taxation is but one of the many considerations to be taken into account by companies in deciding the allocation of resources between different countries. It is clear that the tax exemption was not the only factor which led to the growth of the Irish mining industry in recent years. This development was due also to relatively favourable and well documented geology, improvements in technology, good mineral legislation and the impetus given by the Tynagh discovery in 1961. It is indeed significant that all the mining companies which have made exploitable discoveries here were engaged in mineral exploration before the 20-year tax exemption was introduced. Special considerations attach to mining tax concessions which relate to the exploitation of irreplaceable national resources and therefore they differ fundamentally from the tax incentives available for manufacturing industry which is intended to be permanent. A mine is a wasting asset and must be taxed while it exists or it will pay no tax at all. Manufacturing industry will pay tax when reliefs, such as those for exports, are exhausted and will confer a continuing benefit on the community. I wish to emphasise that the special circumstances which necessitated a change in the Government's fiscal policy as respects non-bedded minerals do not apply to industry in general, particularly manufacturing industry. The changes in mining fiscal policy do not of course imply any intentions whatsoever to change the tax relief in respect of export sales by manufacturing industry. Every Government since 1956 has continued the reliefs for manufacturing industry and there will be no change in policy in this respect.

The Government were anxious that the scope of the new scheme of tax allowances should not be finally determined until mining interests had an opportunity to submit their views on the matter. I received a number of submissions which I discussed with interested parties during the course of a series of meetings in recent months. I appreciate very much the constructive matter in which these consultations were held. Following consideration of these representations the scheme proposed last October was modified in some respects. In addition to the tax reliefs already announced it was decided that certain allowances should also be provided in respect of abortive exploration expenditure and the cost of acquiring scheduled mineral assets. The revised scheme of allowances is now set out in the present Bill.

Section 1 sets out definitions. The Bill is concerned only with the treatment of profits from the mining of minerals specified in Schedule 13 to the Income Tax Act, 1967.

Under section 2 of the Bill an immediate allowance is provided against any mining profits of a person from working a qualifying mine for the full amount of exploration and development expenditure as it is incurred on or after 6th April, 1974, in any part of the State. Senators will note that all exploration expenditure whether successful or abortive will qualify for immediate relief against mining profits. Where abortive expenditure is incurred on or after 6th April, 1974, relief will be limited to abortive expenditure incurred within ten years prior to the commencement of mining. It had been intended that a seven-year restriction should apply. This period was extended to ten years by a Report Stage amendment to the Bill in Dáil Éireann. In addition to these reliefs special provision is also made, in section 2, to enable companies already carrying on mining operations before the withdrawal of the tax exemption to claim an immediate allowance of any unallowed balance of exploration and development expenditure incurred before 6th April, 1974, which qualified for relief under existing law. Section 7 accords similar relief in respect of any unallowed balance of capital expenditure incurred on plant and machinery brought into use before 6th April last.

Section 3 will enable abortive exploration expenditure incurred before 6th April, 1974, but not earlier than 6th April, 1967, also to be set against mining profits. An amendment to the Bill on the Report Stage in Dáil Éireann extended from seven to ten years the general period over which abortive exploration expenditure may be accumulated for set-off against profits from a successful mine provided that expenditure was incurred on or after 6th April, 1967. Since the 20-year tax exemption commenced on 6th April, 1967, it is considered that this date would be an appropriate starting point for this allowance. Provision is also made in section 3 to prevent persons arranging matters so that successful mining companies would take over unsuccessful exploration companies in order to set their abortive expenditure against the taxable mining profits of the successful companies.

Section 4 is designed to cover the case where exploration expenditure is incurred by one company in a group of wholly-owned subsidiaries and mining profits are earned by the parent company or other subsidiary in the group. In such cases the exploration company may elect to have its exploration expenditure, whether successful or abortive, attributed to any subsidiary in the group or to the parent company so that the exploration expenditure may be set-off against mining profits wherever they arise within the group.

Section 5 provides relief for exploration expenditure incurred by a person who finds a scheduled mineral deposit and then sells the asset to another person who develops and works the mine. In such a case the latter will be able to claim in respect of the exploration expenditure incurred in connection with the mine.

Section 7 provides for "free depreciation" of new plant and machinery, other than road vehicles, brought into use on or after 6th April, 1974, in the working of a qualifying mine. Furthermore, as an encouragement to higher investment in new plant and machinery by the mining industry, provision is also made in section 7 of the Bill which will, in effect, allow a further 20 per cent of that expenditure, making 120 per cent in all, to be set-off as it is incurred against mining profits. The relief in question will apply to expenditure incurred on or after 6th April, 1974, on new plant and machinery used in connection with the mining of scheduled non-bedded minerals in any part of the country. As a further incentive to encourage exploration for non-bedded minerals, section 6 provides for a special investment allowance of 20 per cent of expenditure on exploration incurred on or after 6th April, 1974. This is in addition to the 100 per cent allowance for exploration expenditure allowed under section 2, to which I referred earlier.

Because investment in mining is highly speculative and generally subject to greater risks than investment in most other industries, there is a case for allowing all pre-production expenditure. It is also desirable to make an allowance for the cost of acquiring mineral deposits.

Section 8 enables the cost of acquiring deposits of scheduled minerals, where incurred after 31st March, 1974, to be spread over the life of the mine or 20 years if shorter. It would however be invidious to allow sums received from sales of scheduled minerals to escape income taxation because the owners elected not to work the deposit but to dispose of their interest. Consequently, section 11 imposes a charge to income tax, and section 12 imposes a charge to corporation profits tax in the case of a company, on the proceeds of sales of scheduled mineral deposits occurring after 31st March, 1974.

Sections 15 and 17 terminate, with effect from 6th April, 1974, the exemption from income tax and corporation profits tax, respectively, of profits from the mining of scheduled minerals.

Section 16 gives an option to anyone carrying on the trade of working a qualifying mine to elect to be charged to income tax for 1974-75 by reference to the actual profits of that year instead of on the basis of profits of the preceding year.

Section 10 provides for tax relief for marginal mines.

Sections 13 and 14 which relate to the tax treatment of dividends paid on profits previously entitled to exemption, are consequential on the repeal of the exemption. In particular provision is being made to ensure that dividends paid after the repeal of the tax exemption but out of profits which fell within the exemption period will carry the benefit of the income tax exemption.

I am satisfied that the new scheme of tax allowances provided for by this Bill, together with the other advantages of operating in Ireland, will afford adequate incentive to further prospecting and exploration so as to ensure the continuation of a satisfactory level of development of the country's mineral resources. Because of the generous allowances now being provided, the gain in revenue to the Exchequer in the next few years may not be significant, but over the next 20 years it is estimated that the tax yield on 1973 figures will be some £125 million.

I commend the Bill to the House.

I believe that this Bill is, to a great extent, a window dressing operation designed to fool some of the supporters of the Government. My criticism of the Government in their approach to mining is not, as a number of Government speakers have suggested, that I or the party to which I belong, object in any way to the community getting more from the mines. On the contrary, Fianna Fáil's approach was to encourage development of our mineral resources and get the greatest possible return for the community.

One of the most important reasons on which I would base my criticism is the Government's attitude in regard to the cancellation of the statutory exemption of existing mines, as distinct from new mines, from income tax. I believe that in relation to existing mines which were benefiting from this exemption cancellation is damaging to our hard-won reputation in the field of industrial development. When bargains or deals are made they should be kept. When we were in Government and endeavouring to work out the maximum amount that could be recovered for the community from new mines, consistent with encouraging mining in Ireland, that was one matter. It is a quite different and serious matter when one is taking away from existing mines a concession granted to them by both Houses of the Oireachtas, which one might say is solemnly enshrined in legislation, and then trying to reassure people, as the Minister has done here this evening, in relation to industrial development itself that investors in industry in this country need have no concern.

It is significant that the Minister has said here tonight:

I wish to emphasise that the special circumstances which necessitated the change in the Government's fiscal policy as respects non-bedded minerals do not apply to industry in general, particularly manufacturing industry. The changes in mining policy do not, of course, imply any intentions whatsoever to change the tax relief in respect of export sales by manufacturing industry.

Why does the Minister feel that he must stress that point once again? He has done so in the other House and members of his Cabinet have spoken on similar lines in other places. I can only assume, as one must assume when one hears it being said so often, that it has affected would-be investors in this country: it has deterred them from setting up industry here. Otherwise why should the Minister or members of his Cabinet feel that it is necessary on so many occasions to emphasise this point?

I may be forgiven for assuming that it is still necessary to emphasise this point because if there were no inquiries relating to the possibility of bargains being broken in that particular field of industry why should the Minister mention it again? I do not know if it would even be desirable or in the national interest for the Minister to reply to me on that question. I sincerely hope such inquiries did not arise. We all know that credibility is the greatest asset an individual has and, most certainly, that a Government has, and once a Government loses credibility it is forever distrusted. There is no surer way of losing your credibility than by breaking a sealed bargain, a bargain that was solemnly enshrined in legislation by both Houses of the Oireachtas.

If I may look back on the mining industry in this country over the past number of years, it must be remembered that up to a short while ago all the experts and, indeed, the books in the school that I attended, very definitely stated that there was no mineral wealth in Ireland. A State company was formed here for the purpose of exploring for mineral deposits —Mianraí Teoranta. This operation, although it cost a lot of money, was not successful. There were many complaints at that time about the money being spent on Mianraí Teoranta and had the Government of the time continued with this policy on the bigger scale which, looking back would appear now to have been necessary, there would have been an outcry in possibly both Houses of the Oireachtas. Perhaps, leading members of the Cabinet now might then have been leading the outcry and claiming that they were being asked to vote money each year for nothing else but digging holes in the ground. It might be said also that the State could have bought the latest technical know-how to improve exploration methods. This is all right in theory but in practice it is difficult and may well be impossible to bring about.

As a result of the experience in dealing in mining and exploration through the State company the Government decided to offer inducements to private enterprise to explore for and develop our mineral resources. This policy was highly successful in that it succeeded in enticing people with expertise to come here. They were successful in locating substantial finds of minerals and similar finds are likely in the future. That fact is well-known and accepted. It is, and must be, of some significance that in this small island we on this side of the Border succeeded in developing our mining industry to the extent that it has now been developed. It is surely ridiculous to think that we were so blessed on this side of the Border that we had vast amounts of mineral wealth and those at the far side of the Border had none. I mention this because it is the positive indication of how successful and wise the Government were at the time in offering these inducements and attractive benefits to knowledgeable people in the mining industry to come to this country. It is only very recently, I think, that they had any successful mining operation of any size in the North of Ireland and I think they were encouraged by the success of the efforts on the part of our Government at the time to attract experts from other shores.

There are people in this country who I am quite sure believe in what they say who want our mineral resources nationalised. I am not sure if there are many such people but every so often we hear these demands. They were not many or loud when the State company was exploring for mineral wealth in this country. I do not recall many of these people making demands at that time. What I think they are now advocating is that private enterprise, having done the work and risked their capital, should have the fruits of their labours and investments confiscated. It is now apparently forgotten that a number of companies spent a great deal of money on exploration and drilling with no success. If one were to accept the proposition that we should nationalise the mines at this stage, one must face the fact that large amounts of capital would be required and that the amount of capital available to the State at present for other purposes, such as the building of houses, schools, factories, hospitals and so on, is very limited.

Consequently if we were to nationalise the mines we would have to cut back on capital which is now being used in the type of projects I have mentioned. We have to try to attract capital from abroad to invest it in our nationalised mines. To succeed, if one were to attempt this—I hope the Minister would not ever think on those lines—we would have to offer considerable inducements and financial returns, and the net effect of this, though it might be called nationalisation, would not be very different from the present position in that a great deal of the profit would be going to outside interests who had invested capital in our mining enterprise.

When these inducements were originally offered there existed a situation where the mining prospects were poor. As the mining finds developed the State's bargaining position improved so that it is now possible to get greater returns for the State from mining and to give smaller inducements than were necessary in the past. It is unrealistic to compare the present situation with that which obtained when the mining inducements were first introduced.

It is clear that the Fianna Fáil Government, when they originally tried using a State company and found that that did not work and when they changed policy and offered inducements to private enterprise, found that this policy was successful. When this success put us in a better bargaining position the Fianna Fáil Government were preparing to extract the maximum benefit from that bargaining position.

I have already dealt with the points raised in the Minister's speech and the other speeches which have been made reassuring us that the same thing will not happen to them. I sincerely hope this is true. I believe, in the interests of equity and of the economy, that this exemption should not be removed from existing mines. I emphasise existing mines as distinct from new mines which can be treated on a different basis. There is no obligation on anybody to treat them in the same way as existing mines. This is an important point. I ask the Minister to give serious consideration to the implications of what he is proposing to do in this Bill in relation to existing mines.

The way in which the debate was handled in the Dáil mystified me as it is a debate about an important subject, which is how the community, through the Minister, through the Cabinet, are to fight their way through a period of economic stress probably unprecedented in the lifetime of our State. There is no doubt in anybody's mind, and one is not being partisan when one states that the economic future of these countries, Britain and Ireland, is sliding rapidly to an uncontrollable financial situation partly because of their inefficiency, partly because uncontrollable outside influences leading to inflation. We have the failure of the Common Market and the truly disastrous state of the British economy, which clearly is most unlikely to recover within the next decade no matter who is in Government.

In these circumstances any significant source of wealth in Ireland should be examined with scrupulous care by a responsible Government to try to see how much money they can take out of these mines, out of this property which I emphasise we own, because by a remarkable piece of good fortune we do happen to own the property, and what is likely to face the Government are the financial conditions in which they will lease it to a company in order to mine it, that is assuming they do not set up a State company and do it themselves.

One of our difficulties is that none of us is completely certain about precisely what figures we are discussing here tonight. All we have from the Minister is one figure, and that is the key figure. I think he must try to build on that figure for the rest of us here and in the country because there is considerable interest in this problem, very much more interest outside this House or the other House. There is very much more interest outside among responsible people about this question: What are the facts about the position in relation to mining and, of course, gas and oil? Tonight one of the evening papers has as its headline: "We are going to export oil". Is it this kind of periodic euphoria which grips the leader writers every so often? They are not to be blamed for this because reasonably well-substantiated figures have been produced by conscientious people who are non-partisan and not the slightest bit interested in party politics as we know it.

On the basis of these figures there appears to be enormous, newly-discovered, newly-realised resources of mineral wealth as well as the gas and oil, but particularly mineral wealth which we are dealing with here and of which we were not aware ourselves. I remember when we were in Government we got a report on mining and it made the statement that we should be written off as a country of any significant mineral resources. Now apparently that has all changed and this is where I have been perplexed, in reading the Dáil debate and listening to the comments by the working politicians, by their extraordinary indifference, apathy, apparent unconcern. There is the extraordinary remark by the Taoiseach—I referred to this before about a year ago—in which he said we have no significant mineral resources. I am sure he does not believe that now. That, I suppose, was a left-over idea which he had from so much of what was said in the past about our mineral resources, but I think he had a responsibility to know more about it than he appeared to know then. He certainly has a responsibility to know more about it, to have learned everything he can about it, since that time.

I can only assume from the reference in the Minister's speech that the figures are based on more reliable information available both here and everywhere else—his decision in relation to the fiscal policy. I would ask the Minister to let us have an end to the speculation, the wild euphoria— or is it reality? Is it true? Is it not wild at all? Is it well founded? Have we suddenly come into enormous wealth in this country and all we have to do is to set up organisations, either our own or pay an organisation to establish itself, and all our problems are over—problems in relation to the great subjects that concern us all, the provision of housing, health, hospitals, care of old people, education, communications, which all of us profess to want to find the funds for? These funds at present are greatly limited, there is no doubt about that, and they will become more limited, I would imagine, if the present deterioration in our economic circumstances continues.

Is it true that this money is there and that the only thing between us and that money is a decision on the part of the Government to follow a slightly more radical policy than their predecessors but, at the same time, an essentially very conservative policy of allowing this money to be taken out of the ground by private entrepreneurs for their own use, their own aggrandisement? The 5 per cent who own the 74 per cent are apparently to continue to retain their position, privilege, wealth and all that wealth can buy in our kind of society. Is that the position?

The previous speaker, the Fianna Fáil spokesman on this question, to some extent defended the 20 year taxation relief. It is really indefensible. I do not think anybody could defend the idea. Even to the simplest mind, there could be no defence of a principle to give taxation relief to what is, as the Minister said, a completely wasting asset. There will be nothing there to tax at the end of 20 years and therefore what the Government are doing is handing over the money and taking a small tax on profits, 9 per cent, giving them 91 per cent. Therefore there is no doubt in the world that this outrageous proposal should be stopped without any delay.

The case has already been explained to Deputies that there is no comparison between taxation relief in relation to capital investment, an industry or a factory, and this kind of thing because at the end they may decide to get out. I do not approve of any of these taxation reliefs at all. As you probably know, I believe the State should have its own enterprises. However, accepting that you believe in the private enterprise system and you support these people in the early days of their establishment of industries by giving taxation reliefs, they at least have to leave the factory and machinery behind them, and even if they are a failure you still have those assets, so there is no comparison whatever between this idea in regard to mines and taxation relief for industries, and there never was. There was never any confusion in the minds of the people who mattered most, these were the mining speculators. As the Minister points out, since this completely unnecessary row over the changing taxation system, the interest in mining in Ireland has increased rather than diminished. This is a defence of a totally indefensible position.

I wish to refer briefly to the point made by the previous speaker on nationalisation and his hope that this would not happen. In the first instance, we already own this property and there is no question of nationalising because it already belongs to the State in strict terms of nationalisation.

Secondly, I am always astonished when I hear our politicians deprecating the idea of nationalisation, because of course one of the few remarkably successful manifestations of native Irish Governments since the State was formed has been the various State capitalistic type nationalised industries —not nationalised in the true socialist sense, but certainly State-owned and operated: Bord na Móna, the ESB, even CIE, Aer Lingus, Irish Steel Holdings, and so on. Anyone who wants to quarrel can, because I know their predecessors, private enterprises, were extraordinarily inefficient.

First of all, they are mostly extremely efficient and very well run and we should be proud of these and, as I say, I am always astonished when I hear speakers deprecating this idea because all around them they see the remarkable success achieved by these organisations during the 40 or 50 years of native Government. Secondly, all of these are the tough industries—the ones that private enterprise would have taken if they could have made money out of them, but they could not. They are the public utilities, so therefore there is no money in them and private enterprise did not go into them. But we found the capital, enormous capital. If you relate the capital to present terms, the capital found for these many industries would be quite astronomical now, yet successive Governments, antipathetic to the idea of State enterprise but forced by the disinterest of private enterprise in these areas, went and looked for and got the capital and invested it and created these on the whole magnificent State industries.

Another intinn sclábhaíochta sort of attitude that these people have, positively frightening to me, is this idea that we have not got the experts, we have not got the technical knowhow—this kind of thinking as if we were a totally illiterate society. I can understand that in some of the Third World countries where the poor things, through imperialism and colonialism, have not got any significant educational systems. It is not true here. In fact all our State industries have found the experts and the technicians and they are mostly the product of our own universities and schools.

Therefore I do not think that that speaker made any case whatever against nationalisation, even if the Minister was proposing that, which I am quite certain he is not. I do not think it is a valid point and people should not go on making it. It is thoughtless and does not relate to the facts. We have been able to get people to do these things, so that should not hinder us in whatever decision we take about how to get the most money out of this kind of enterprise. We have never had any difficulty in getting capital and of course it is obvious that when you have resources of that kind you will not have a real shortage of a very essential raw material. There should not be this difficulty.

I digressed to deal with that statement because it is important coming from the leading Opposition party. I really believe that it should be discounted by the Minister in his consideration and his approach to this problem. Through a relative ignorance, we only know what is available to us as ordinary working politicians doing our best to find out the truth with the very limited resources available to us. Could the Minister give us the precise work-up on the figures, £125 million, £120 million over a 20-year period? What is that assumption based on? Is he in a position to say that there is this alleged enormous wealth in, for instance, the Navan mine?

We all know that enormous sums appear to be made by people other than our own people. As I said in my introductory remarks, we are a very poor nation as we are at the moment and we simply cannot afford a penny piece to go out of this country. We can use our powers as a sovereign Government to control the exploitation of this raw wealth or material wealth, and if it is true that vast sums are being made on the international money markets out of Irish mining because those people believe they are going to get a clear run from the Government and that the Government are going to take only minimal profits rather like their predecessors, then that is an extraordinary scandal. If there is this great wealth and if there is at the same time—and there certainly is—this great need in every single Department of State concerned with social, educational and other matters, then it seems to me to be a great scandal that the Government are not acting with greater decisiveness by putting an end to this speculation and money-making at the people's expense. Recently we saw as a result of one deal that Mr. Tony O'Reilly made an enormous sum by buying and selling out shares.

One figure which appears—it is a figure at any rate mentioned—in regard to the mineral zinc lead ore is of course extremely important. This is only one mine, the Navan mine, which has been given as something between 70 million and 80 million tons. It has been worked out from that that this could equal, when mined, a total of £3,000 million. These are such staggering figures that it is very hard to credit them. If they are true, it is a wonderful development for the State. If they are not true, we should be told. This is where the Minister's tax policies are going to bite. How much? What is the size of that bite? How much is he going to take from those people? If there is that enormous wealth there, this figure of £120 million over a 20-year period is, of course, absurdly inadequate.

Some say that the figure of £3,000 million may be too high and that the figure may be £2,000 million or £1,000 million. This figure has been worked out by an accountant basing his assessments on the price of zinc and lead at a particular time. It fluctuates, but mostly it fluctuates upwards. Prices have gone up because the minerals are essential raw materials and mostly they have fluctuated upwards. This wealth has this marvellous reality about it that the longer it is left there the more there should be. Zinc, whatever about other mineral resources, is practically a continually valuable raw material. If one studies the international financial Press in New York, Canada, Toronto and Britain, it would appear that there is some substance in this claim to that astronomical figure of wealth in the Navan mines.

As the Minister said in his opening speech—and the Minister for Foreign Affairs also subscribed to this view—because of the continued increased interest in mining in Ireland, there appears to be good grounds for believing that there is real money in enormous sums in the ground. If that is true, this figure of the Minister's is a paltry sum to be taking out for our people over the next 20 years at a time when we need money so badly.

I have not the slightest pity now, I could not care less about how much we take off these mining speculators, whether they are involved in mining, gas or oil, when I think of the enormous wealth made by exploitation of shortage of essential goods. The inflation which is threatening the whole of the western world at the present time can be traced back to the inordinate greed of these people in exploiting shortage of mineral wealth such as oil, gas and so on.

For anybody to ask us here to have pity on these poor unfortunate mining speculators or oil speculators or gas people is an extraordinary exercise in absurdity when one thinks that we are at the same time responsible, both here and in the Dáil, for trying to provide a properly-structured social organisation with social justice in our society. Money is the key to that and the money happens to be there. There can be no priority given to these people over the needs of the sick, the illiterate, the aged and the homeless in our society. We apparently have moved into that wonderful, unique, special, happy band which happens to have great mineral wealth. We are establishing no precedent when we turn on these people and tell them to get off our backs and that we will not be exploited by them any more. The oil-producing OPEC countries, the Middle Eastern countries, have done so. Kaunda has taken over the mines and taken virtually the total output from these mines for the betterment of his people.

The acceptance of such a tiny figure by the Members of the Dáil—and it would look as if it is likely to happen in the Seanad as well—is quite astonishing to me. I cannot understand it. On the very little evidence given in the Minister's opening speech we have no reason whatever for believing that he is making any serious attempt to get the optimum amount of wealth from this great, new, raw material. In fact—in this respect I agree with the Fianna Fáil speaker—it is a window-dressing affair, attempting to conceal the total betrayal by the Labour Party, who are committed to total public ownership and so on, of their stated political principles.

In this Bill the Minister had an opportunity, on behalf of the Government, of telling the various people who have worked on this subject, and those of us who have been concerned, that we were grossly over-optimistic and that our talk about this great new wealth in the heart of the country was not justified. He could have told us that our enthusiasm was misplaced and that we were misleading the people. Why has he not done this? Why has he not given us more detailed facts to go on as a basis for his £120 million over 20 years? We have had this figure of £77 million made up of the amount of wealth it would mean when mined. That is the Tara mining people's own figure. Therefore this does not appear to be an extravagant figure.

When then does this £120 million in 20 years come in, in the light of the Minister's great need for wealth in practically every Department with which he deals? Even more important to me is why there has been practically total silence on the part of Deputies and the working politician over the years in the Opposition and even in the very short time of a year or year-and-a-half in which we have known about these facts. Why have we had this conspiracy of silence about this wealth which is said to exist?

We must face the fact that this is a multi-million type industry. Enormous sums are at stake for a handful of people. When these people, whether they are involved in oil, gas, or mines, move in they use all their power to confuse, to mislead, to suppress, to bribe, to cajole and to influence the people making the decisions and the people helping the people to make decisions. We have seen the present controversy in relation to the relatively trivial sums involved in recent local government activities compared to this and the way these people operate in a situation like this. I am not saying that that is the reason for the conspiracy of silence, but I believe Deputies and Senators have a responsibility to examine a proposition of this kind in much greater detail than it has been examined up to now.

I can see no basis whatever put forward by the Minister. He has not even tried to deal with another very important factor arising out of the mining industry: what is going to happen to this raw material? Is it going to be smelted in Ireland? Both the Minister and the Minister for Foreign Affairs referred to it in passing in the Dáil. It is vital to know what is going to happen about the smelting of this raw material. Is it going to happen here? Are they going to establish a smelter here in Ireland or are they not? Who gave the Tara Mines people the authority to make contracts with eight different Belgian smelting companies to smelt this raw material? Why did they do that? It is an extraordinarily arrogant use of authority.

It must be obvious to all the Senators that the real wealth is in the smelting. If the Minister is simply sticking to tax on profits of mines, of course, as an expert on tax matters himself he must know that this is open to the most unlimited armamentarium of tax fiddles organised by these terribly wealthy mining organisations who have, pay and suborn talented accountants to fiddle the tax returns. One has the extremes of a company in Tipperary which sells to an offshore company. They sell at $1 and return that as the profit made on a ton of the output. They sell it then in an offshore island company at something like $50 a ton. The tax return is completely fraudulent. Even much more important are the recent discoveries by a House of Commons Committee on the oil industry, the North Sea oil industry, which showed that the British tax people were done out of £1,500 million by the fiddling of the Esso oil company. I think they are the crowd who have just made the discovery in Cork. These are the people we are asked to worry about here by the Fianna Fáil Party and to some extent by the Minister's party. Spare your tears. There are plenty of other people in this country who are more deserving of them.

What is the position about the smelter? Are we getting a smelter? Is the mineral wealth going to be smelted in Ireland? It is when the smelted raw metal is sold that the real money is made. It is sold on the world markets. That is where the real money lies. Is the Minister going after that money? If he is not, why not? This is real wealth and they know it. Tara, Cominco, Oppenheimer, Tony O'Reilly, Mogul and Silver-mines all know that. All of these people know well that that is where the money is.

Why is the Minister not going after that money? What is the reason? Where is his loyalty? Where is the Cabinet's loyalty? The Minister for Health is complaining that he cannot pay the doctors enough to give us a good service. The Government can only provide so many houses. We can only build so many schools, universities and secondary schools. There is a need for more roads. There is not a single Department of State which do not say they cannot fulfil their commitments because it has not got enough money.

The truth of the matter is that this is an enormously wealthy society. Deputy FitzGerald goes to the EEC looking for more money from the Social Fund and the Regional Development Fund. It is time we were finished with all this kind of begging-bowl activity. For heaven's sake, we should learn to give up. We are one of the wealthiest countries in Europe apparently. I believe it is totally irresponsible of the Minister, the Cabinet and the Government if these basic facts I have put here are true and if they have not contradicted them. It is effectively irresponsible of these Houses of the Oireachtas that they should have taken this pitiful figure of £120 million over a 20-year period as the optimum gain from the exploration and use of this new wealth, if anything we hear about that wealth is true.

Of course, these things interest me. The Minister should understand I am not criticising the Fine Gael Party because, as I think I have said many times, they are acting as they always professed to believe they should act: as a right wing conservative political party which believe that one should conserve society as it is and not change it and should preserve the position of the wealthy privileged minority and keep the others quiet by periodic handouts.

I am puzzled. I am less puzzled now, but I am puzzled still by the silence of our friend, the Minister for Industry and Commerce, on his failure to produce his White Paper which he promised to the trade union movement, and to us at our Labour Party Conference when he dismissed my plea for information and for verification or refutation of the points of the statement that I have made. "Heady stuff" he called it. Apparently if what we read is true, it is not so heady at all. But, the Minister for Industry and Commerce was able to survive his conference and the meeting with the trade unions by saying that we would get more information. Yet we have not got more information. Now we have this Bill with no information whatever. As to the true state of this new development in relation to mining wealth, I might tell Senators that an estimate given—and the Minister can refute this if he wants to—is the basic one that I mentioned earlier, that is, £3,000 million. If processed and made into industries based on this raw material it increases in wealth again. It is then multiplied by six or seven if processed into end products and consumer goods, to bring it to something around £14,000 million or £15,000 million. The Minister will understand my puzzlement when I was given these figures. They have been stated on many occasions and have never been refuted by either the Minister for Finance or the Minister for Industry and Commerce.

Why do we agree to let any more of this wealth go than we have to? Why should we support the Belgian smelting company? What is the position in relation to smelting? Is the Minister's figure of £120 million over 20 years based on taxation of the raw material exported to Belgium, the provision of a smelter and then taxation on the sale of the zinc and lead from that smelter? Is the Minister's assessment made on a very much more far-sighted and enlightened decision to carry on from the stage of creating the raw material and using the method at present being adopted by the Norwegians in their exploitation of their oil—a very gradual development and release of this raw material to industries based on this precious commodity? Is that what the Minister assessed his figures on? If that is what he assessed his figures on—£120 million in 20 years—something is obviously very askew and somebody is getting away with enormous sums of money at our expense.

We heard from the Fianna Fáil speaker about how much money is spent on this particular project. The work was initiated by an unpublished geophysical soil survey by An Foras Talúntais. I do not know enough about the intricacies of the stock market to understand what has happened since the initial finding of this great strike. There seems to be something terribly obscene about the way our Government have stood idly by while these people carve up this enormous wealth with the help of their local Irish support organisations of one kind or another.

Where people go into this business here or abroad speculating in mining —the Hughes and all these others— I do not think that they can be blamed for doing this kind of thing. This is their nature. They believe in this kind of thing. They believe in accumulating enormous amounts of wealth for God only knows what reason—but they do that only tf given the authority of the State or the society in which they operate. If they have these crude and insensitive and, in my view, essentially unchristian attitudes to society, which allows exploitation for their own need and greed, that is something which society should and can curb. There are many precedents for it. As in the emerging countries— Kuanda and the Middle East—there are many precedents for it. There is no reason why the State should stand by and allow these people to indulge themselves in their selfishness.

In attacking these people we are criticising the wrong people because it is the Minister, as he shows here in this Bill, who can decide on the degree of wealth which he will concede to these people. Quite obviously I believe that in order to increase the outturn from the mines there should be two forms of taxation—a taxation in form of royalties of anything up to 90 per cent to 91 per cent —giving them a take-out of 9 per cent, which would be perfectly adequate for them instead of the absurd amount being suggested here by the Minister. That figure may sound outrageous.

It is rather like in wartime when one found it very difficult to understand how 1,000 people could have been killed in a bombing raid. Equally, it is very hard to take these things in. I honestly believe that many Deputies and probably some Senators do not still understand what has happened in this country, that this extraordinary thing has taken place. There is no longer the need for this pauperised attitude that, with certain justification, we have had in the past.

We should try to understand that this wealth exists and that the safest way is to collect in the form of royalties for the mined ore body, zinc and lead, at so much per ton to be taken for the State. The rate I suggested is 90 per cent to 91 per cent. Off the west coast of America this was done in the case of a very right-wing state. The oil was offered for sale. The state was able to take 95 per cent and the speculators were quite happy to take what appeared to be a negligible 5 per cent.

The reality is that we are dealing with sums of such astronomical proportions at the present time that 5 per cent to a company of private individuals is still an enormous sum of money. This suggestion of 90 per cent to 91 per cent on royalties is still not an outrageous figure. On top of that there should be a heavy tax on operating profits.

A tremendously powerful programme is being operated at the present time by these companies to deflect the inquisitive public representative from finding out the truth. I do not think it is right for the Government to connive at this manipulation of various things. Everybody is involved so far as I can see. Everybody must be involved whether they be the Press, television, radio or politicians, but in various ways they are all involved whether by laziness, refusing to bother with the problem, taking the PRO'S hand-out, or submitting to misleading information by people similar to those referred to in the present inquiries in local government in north Dublin. This kind of thing is in operation while perfectly honourable, honest Deputies and Senators do not bother to examine the information given to them nor find out whether the information supplied from the other side has any basis in fact. Neither do they insist that their Government examine any such information. What has happened to the Labour Party in this present situation?

Why was all this tolerated by this party which are so committed and whose Minister for Industry and Commerce, Deputy Keating, is the key Minister in this situation? Is this the price of office—£2,000 million for three or four Cabinet seats? They are expensive, and not worth it, if one takes into consideration the achievements to date in relation to prices, health, housing, education, agriculture. Where was the gain for this united front, national coalition? On top of those failures—failure of price control, failure of the EEC—probably the greatest betrayal of all that I know of is this silence just now on this very important issue. There is no doubt in anybody's mind as to whether any of the parties are serious about their protestations of wishing to have the money to do various things in these different aspects of the organisations of the State. It appears that money is there and because of their obsessional commitment to doctrinaire conservative attitudes, they are siding with the oil, gas and mining speculators against the people, against the sick, against the homeless, against the illiterate, against the aged. It seems to me an extraordinary truth to have to accept in our society 50 years after it was formed. But the most unpalatable part of all of that truth is the role in all this of the Labour Party, a party established by James Connolly to create a socialist society, to create social justice for our people and for which the poor man gave his life in the process. That seems to me to be the greatest single betrayal of all of that party since they took office in this benighted Government. This is not being said from hindsight. About a year ago I postulated the inevitability of this kind of a betrayal by the Labour Party when they took their decision.

I am a little reluctant to contribute to this debate because I think every Senator here knows I have what might be called a vested interest in the mining industry. At least, I can claim a degree of knowledge of the industry. That is something that was patently missing from the two contributions so far in this debate. Some people seem to think that the mining industry began about ten or 12 years ago. The first speaker, Senator Hanafin, was obviously under the impression that there are only two significant dates in the mining industry in Ireland: the establishment of Mianraí Teoranta in the early 1940s and the introduction of the 20-year tax free concession in 1967. I do not know whether Senator Hanafin is ignorant of the mining industry before the 1940s or completely oblivious to what happened between 1940 and 1967, so perhaps a few comments on the industry during a number of years may be useful and possibly illuminating. I will deal with Senator Browne's contribution in a few moments.

Mining in Ireland goes back, I suppose, a thousand years and I think there is certainly evidence existing that there was active mining in the country four or five centuries ago. It has been suggested, with I think some degree of likelihood, that the eighth century Ardagh Chalice—found, as most Senators will possibly know, in a bog in County Limerick—was mined from silver recovered from the Silver-mines Mine in County Tipperary, a fact of which I am sure Senators Hanafin and W. O'Brien would have some knowledge. Mining here has a long, interesting and, on the whole, unfortunate history. It is only within comparatively few years that mining in Ireland has become a profitable enterprise. I mention these facts because, listening to some of the latter-day saints talking about the enormous potential wealth to be recovered from Ireland, I think it is just as well to have a look back over the lean years. I can speak as one who has had some experience of those lean years. I can remember mining in Ireland in the 1940s and 1950s and indeed in the early 1960s when there were no profits and very considerable losses. I have the sad memory of standing in a parish hall on the side of a Tipperary hill in the early 1950s and having to tell more than 200 workers that the mine was closing down and that I could see no hope of its ever opening up again. So far as I can recall Senator Noel Browne was a member of the Dáil in those days. I do not recall him standing out in opposition to that disaster. I do not remember him taking up the cudgels on behalf of the miners. Neither do I remember him enunciating any policy that would help a revival of mining in the country. In fact, unless I am gravely mistaken. Senator Browne was very conspicuous by the fact that he did not open his mouth on the mining industry until two or three years ago and then only when the apparently affluent years came into the industry.

It is very easy to divide the "lolly" when there is "lolly" to be divided. There is no question about that, but anybody who has any experience of business of any kind— manufacturing or mining or whatever it happens to be—would agree that there are bad years as well as good. I suppose the theoreticians tend to forget the bad years and dwell only on the good and on how the profits of the good years should be divided. Mining is different from all other types of industries. Mining is a high risk, high cost industry. I think anybody who knows anything about it will agree with that statement. Every Senator and every Deputy would agree that we should strive to ensure that the largest possible reward from mining or the exploitation of any of our natural resources goes to our own people. The Minister has given evidence that this is his line of thinking and the line of thinking of the present Government.

Certain people must get a fair reward if we are to exploit our natural resources to the best benefit of the country. In the mining and oil industries there are a number of different types of individuals and concerns who play a part. The speculator has been referred to disparagingly by Senator Browne. It is usually small companies who take the risk of trying to find some natural resources. We have all heard of the days of the famous Klondyke goldrush in which the men who found the mines did not belong to large mining companies in Toronto, San Francisco, New York or London. These men suffered untold hardships in discovering the source of gold which attracted people from every country to North America.

The people who take the risks are usually people who have not large amounts of capital, but who have the urge to discover and become wealthy. They are a natural part of the process of finding and developing resources in every country in the world. They must get their reward. Capital must be provided and this cannot be done unless it is acquired by taxation or some other means. The substantial capital required for mining can only be acquired from people who expect some reward.

The State must get the maximum reward possible from the exploitation of the natural resources of this or any other country. But it must be done in such a way as to encourage people to take the risk which is an indivisible part of the search for and exploitation of natural resources. People are prepared to take the risk in the initial stages by putting up some capital and taking the risk of finding nothing. The odds against finding a mine or an oil well are enormous. The figures quoted in the Dáil—the Minister will correct me if I am wrong—are that out of something over 2,000 prospecting licences issued so far only five viable mines have been discovered and developed. Two of those are in perilous condition. Except for the discovery of the Navan mine our mining discovery would be very limited and none of them would be in operation a decade from now. Whereas we are a comparatively wealthy country in terms of non-bedded minerals, zinc, lead and to a lesser extent copper, these discoveries without the apparent bonanza of the Tara mine would be comparatively modest.

I, as an Irishman, have always tried to do something to develop the mining industry and other industries. I can recall when mining restarted after the war—in the late 1940s and early 1950s—being unable to get an Irishman to put a shilling into an Irish mine. They preferred to back a dog or a horse but were not prepared to put money into a hole in the ground. It is easy to do it now when mining is in vogue and millions are being talked about in the way of profits. I can recall the time when only foreigners would take the risk and that is why they are in the country now exploiting our natural resources.

Senator Hanafin did not mention this, but the first step to encourage the exploitation of our mineral resources was made in 1956 when the late Gerald Sweetman introduced what is now known as the "four-plus-four" taxation incentive—four years at 100 per cent tax-free and four years at 50 per cent tax-free. I do not recall if Senator Noel Browne was a Member of the Dáil in those days. If he was, presumably he accepted that. There is no statement on record that he objected to assisting the miners, who were all foreigners in those days, to come in and exploit our natural resources and to give them these tax incentives. I do not think Senator Browne opened his mouth at that time.

The whole situation in mining as in the exploitation of natural resources has changed in recent years. There may be objections to the decision of the present Government to withdraw the 20 years tax-free allowance. They can be criticised on the grounds that this was brought in by the previous Government and should not have been withdrawn. The climate regarding the systems of companies exploiting natural resources has changed during the last decade. More modern methods of detecting the source of minerals have been found. The risk is not so great as it was a decade ago and it is obvious that some change was due in the relief in taxation for mines. The Government had a difficult decision to make but in the ultimate it should prove to be the right one. I make that statement as a person who might have some grounds for criticism.

I do not know of any mining company who asked the previous Government to introduce the 20 years tax-free concession. I have associations with various mining companies, as is generally known, and I have yet to find a company which have asked for that to be introduced. If it was brought in it was on the initiative of the then Government and Minister and without any pressure from the then existing mining companies. It is inevitable that a degree of encouragement will have to be given to individuals and companies, and I would hope a growing number of Irish companies would take part in the search for and the development of our natural resources. The finding of natural resources should be left to private enterprise. The State should not take the initiative in that regard. The role of the State should come in when the minerals have been discovered and costly steps have been taken to develop them and then negotiations should take place between the companies concerned and the Ministers concerned to decide what reward the State should receive and on what terms a mining lease and other leases should be granted.

The State then has a right and a duty to step in and to make the best bargain on behalf of the Irish nation. I should like to see the State participating in mining and other natural resource enterprises. I should like to see the State participating in the equity and the capital of such companies. I should like to see the State representatives sitting on the boards of Irish mining companies. This would be good for the companies and for the State. They would realise and appreciate that mining and the exploitation of natural resources is not as easy as some people make it sound. You do not get them by waving a magic wand. There is hard work involved and years of failure, and the rewards are tiny compared with the effort which must be put into it.

Senator Browne is right in stating that there has been exploitation. This exploitation has gone on for far too long. Some companies have done unduly well out of the exploitation of the natural resources of other countries and some individuals have made vast profits, but people who have been in the industry for a long time and who remember the difficult years can say without contradiction that mining and the ancillary industries do not very often bring the type of rewards that are now being talked of.

I should like to see the Minister going a step further in encouraging not only exploration in this country and the development of mineral resources but encouraging Irish mining interests, entrepreneurs, to go outside this country and develop natural resources in other countries. We are so used to sitting tight in this country and watching people coming in from outside to not only exploit our own resources but even to participate to a very substantial degree in our whole industrial fabric that the idea of going abroad as entrepreneurs ourselves and doing it seems sometimes to be lost in us. The merchanting spirit seems to be dead within us at times.

Now is the time, particularly since we have become members of the EEC, when we should be thinking not alone of retaining the biggest possible proportion of and getting the greatest possible reward from our own mining, manufacturing and other enterprises but going out and doing the same thing in other countries. I should like to see this spirit of initiative and enterprise encouraged. The Americans have been doing this for years. They managed to look after and conserve their own resources by encouraging their nationals to go abroad and exploit and develop resources in other countries. I am not saying that was necessarily a good thing. In fact it was abused, as we all know. But I think our people should be encouraged to look outward as well as inward. I hope the Minister and the Government at some future date will consider giving encouragement to Irish mining and other interests to do that.

Millions have been tossed around in regard to the future reward from mines but the whole history of mining over many years—these are not my words; they are the words of other people who know much more about it than I do—has been an up-and-down history. While the Minister is estimating that during the next 20 years the Irish economy will benefit to the extent of £125 million, it could be substantially greater. As we know, in the past five or six years the price of mining metal, lead, zinc and copper, has gone up to astronomical heights but so also have other commodities. That does not go on forever and if there is a downturn in the price of metals mines existing in potential could find their profits drastically squeezed. One thing is certain: costs are not going to come down. Any estimate made by the Minister or his Department or anybody else is based on current costs and, obviously, on the current prices of metals. The price of metals could change. In fact they are already changing. The prices of some base metals has gone down by at least 40 per cent to 50 per cent and may go lower. Whereas you have the enormous profits being made on the upswing you could make equally substantial losses on the downswing. I hope that will not happen to the Irish mining industries but I must point out that this is what has happened during 100 years or more in retrospect in the history of mining. Indeed the mine with which I am associated closed down for that reason, because in the early 1950s the price of base metals dropped to such a level that the mine could not operate profitably and it had to close down. Nobody got any reward out of it, either the people who put up the capital to develop the mine nor the Irish Government.

Mention has been made, again by Senator Browne, of the establishment of a smelter. Here I agree completely with him. However, there is no good in talking about establishing a smelter unless it is an economic proposition. I believe that, with the discovery of Tara and Navan with its enormous potential, and even allowing for certain disagreements about what exactly the ore reserves are there, it would now seem that the situation has been reached when the establishment of a smelter would be an economic proposition.

Here again I should like to reiterate my own personal views. I should like to see the Irish Government participating substantially in such a development. Smelting does not always pay either. We get all this talk about rosy profits from processing the ore to the ultimate, but it does not always happen that way. Smelters have lost money, too, believe it or not, just the same as mining companies. But I think this country should be in a position to process its ores, whatever type of ores they may be, to the ultimate, provided it is an economic proposition. Even if it were to be a very marginal proposition I would still be in favour of it. I think it would be a good thing economically for this country to have its own smelter. I hope the examination of this possibility will not be left entirely to outside interests. We have all read recently where certain of the big Canadian mining companies are looking at the project again. If there is to be any further looking at the project I should like to see the Irish Government in on it and in on the participation when that comes about.

With regard to Mianraí Teoranta, they could have done all the things we are talking about doing now 20 years ago—I will not say if they wanted to do it; I am sure there were individuals then as there are now in Mianraí Teoranta who would love to have been associated with the finding and development of Irish mines—but Mianraí Teoranta were set up in 1940 or 1942, were given no funds and given no personnel. They were set up to explore for minerals. They had the power to exploit minerals if they so desired, but they never did anything. It was willy-nilly left to private enterprise to develop the mining industry in this country for better or, as some people apparently think, for worse.

Those are the facts of the case. I think there is a part to play for an Irish mining company set up by the State, but the pity is that that company did not engage in exploration over the years. In how much stronger a position would an Irish Government today or even 20 years ago have been if a proper and effective survey had been done for minerals in this country. Then we would have been in a strong bargaining position. We left ourselves—and successive Governments must take the blame for this— in the position that you either had foreigners coming in to do the exploitation or it was not exploited at all. If it were to come to a choice between leaving this natural wealth unexploited in the ground and suffering continuing emigration, most of us would rather have anybody from outside come in and exploit the minerals and keep our people working at home. It is a poor consolation to have mineral wealth 100 feet or 200 feet or 500 feet underground and Irish men out in Toronto or in Texas working other mines.

When it comes down to a choice over the past—I am talking about giving credit where credit is due to successive Governments in this regard —the policy was right to encourage people to come in to open up the mines to develop them and to give employment. An enormous amount of highly-paid employment has been given. In the process we are training technicians in an active mining industry, which is the important thing. It is easy to talk as if the State can raise the money. There are growing numbers of people and technicians who are interested in manning the mines but they were not available 20 or even ten years ago. We did not have a mining industry; we did not have a school of mining; we did not have technicians; the capital was not available.

This situation is changing now. I hope, and certainly it is my fondest wish, that as the years go on the Irish people, either through private enterprise or through State participation in addition, will take a greater grip on the development of their own natural resources. They will not do it by making airy-fairy speeches in the Houses of Parliament; they will do it by putting their hands in their own pockets and by training their own people to do these things. I do not know of any other answer than that. Some people may have theoretical ideas of how it can be done, but in the final analysis those who try succeed, and they are generally the fellows who work and those who put their hands in their pockets. That has been my experience over many years. They are not the theoreticians who make airy-fairy speeches about things of which they know little or nothing.

I do not wish to say very much about the Bill. I would cavil at one or two sections, although the proper time to do so would be on the Committee Stage. I am not at all satisfied—the Minister knows this—that despite his declared intention, profits prior to 6th April this year will be free of tax. It is a complete matter. I know that the introduction of corporation tax this year on top of income tax complicates the situation still more. However I still feel that there is an element of retrospective taxation in regard to this Bill.

I am also sorry that in a section of the Bill where he allows subsidiary companies in a group of companies to set off abortive or any other exploration expenses incurred against the parent company or other companies in the group, this is only permitted where the subsidiary is 100 per cent owned by the parent company. I read the Dáil debate and the Minister talked about 25 per cent of a hole in the ground or something. It was an illustration, although one I find hard to follow. I do not think you can buy 25 per cent of holes in the ground, It is a very difficult thing to do. A subsidiary should qualify; what is normally regarded as a subsidiary company in ordinary commercial practice should be also so regarded in the case of mining.

The Minister has also decided that abortive expenditure after ten years will not apply. You cannot set off expenses of any kind, for abortive exploration expenditure or anything else, unless you make a profit. The State therefore would not lose any revenue unless profits were made in this case by the parent company. Perhaps the Minister could not write everything into the Bill or please everyone. He has done a reasonable job in trying to meet various representations made to him. He is also in a difficult situation in regard to the whole question of mining and the rewards that should be given to the various interested parties.

In conclusion, I hope that this Bill will continue to give encouragement to people and companies, preferably native companies, to continue the search for natural resources in this country either on land or off our shores. It can only be done if we, ourselves, are prepared to show the necessary initiative, take the necessary risks and put up the necessary capital. Human nature being what it is, nobody will do this unless satisfied he will get a fair reward comparable to the risks taken. I do not believe in giving out easy rewards to speculators of any kind: I am totally opposed to them. I believe that the men of enterprise should be rewarded. Not only are they doing good for themselves; they are doing a good job for the community. It is the Minister's job to ensure that profits which accrue from such enterprises are fairly divided with the lion's share going to our own people.

Here again I find myself in agreement with Senator Dr. Browne. We have a lot of leeway to make up in regard to the provision of houses, adequate health services and so on for our own people. It is right that we should use the development of our own natural resources to provide the capital for these developments. However you will not do it unless you encourage the type of people who are prepared to take that risk, do the work and put up the capital, unless you give them a fair crack of the whip. How that is done is a matter for the Government of the day. The present Government are on the whole doing the best job they can in difficult circumstances. The Minister knows my views on certain sections of this Bill. I think that the Bill would be improved by accepting my views: that is a personal view; probably the Minister has other ideas. The mining industry in this country is in a healthy state and I believe that other mines will be found. We must ensure that the tempo is maintained. The greatest potential probably lies in offshore oil and gas. At this stage nobody can say, but we must give a fair opportunity to the men who are prepared to take the risk: give them a fair reward and then ensure that our people get the largest possible slice of the cake.

I do not intend to delay the House very long but I have a few short observations to make which occurred to me while listening to the Minister's opening speech and remarks made by other speakers.

In years gone by there was scant recognition in school geographies of mineral potential in our country. The few lines given positively stated that there were practically no mineral resources within the limits of our island, but that our neighbouring island of England was very rich in deposits of coal and iron and other minerals. We had to learn by heart the names of the many British coal-mines and where the iron industries were situated. For much of our lives we were led to believe that there did not appear to be anything of any interest in Ireland underneath the ground. It was only when war broke out that the Government decided to exploit what was visible, the turf resources, and to use water for generating electricity.

For thousands of years there has been a certain amount of mineral exploration despite the fact that the geographies in the eighteenth and nineteenth centuries seemed to ignore it completely. History tells us that thousands of years ago mines were in operation. We also know that during the rising of 1641 iron was mined in many parts. In 1948, I remember coal mines being operated in my own county. This industry nearly collapsed overnight. Were it not for the fact that the Government provided a coal-burning station at Arigna, the mining industry in that area would also have collapsed.

This illustrates that, as the previous speaker said, there is a great element of risk involved in mining. Until very recently it was a field that the individual or private enterprise could not enter. There was always the danger that all the money would go down the drain. I know some people who did speculate in the coalmining industry and they lost their entire resources.

When mining was established, thanks to men such as Mr. Hughes —a Fermanagh man and a neighbour of my own who gained experience in Toronto—and other men, who used the latest devices and techniques, the most important strike was made in Tynagh in County Galway. People then became very conscious about mining and the wealth it offered both for individuals and for the nation as a whole. I remember the time when I was in the Dáil when it was necessary for the Government to vote a very large sum of taxpayers' money to salvage the copper mines in County Wicklow. Copper prices on the international market had fallen. Some time prior to that the experts had said there was no danger whatever. As an individual, I can see the tremendous risk envisaged in the copper mines in Wicklow and in coal mining in other parts of the country. For that reason we must admit that those who invest their money in this gamble are taking a risk. It was events such as these that prompted the previous Government to provide more incentive for people to invest their capital in exploration in this country.

When the explorations were successful there was an immediate outcry to ensure that the speculators did not get away with vast profits. It was only by using the latest techniques and equipment that these natural resources were brought nearer the surface. I remember the Ambassador Oil Company exploring for oil and gas in my own county. During that drilling they also discovered some gypsum in the area. I have yet to see any effort being made to develop any gypsum in that area. The company also discovered gas but in very small quantities. That was back in the period 1961 to 1963. Since then techniques have improved immensely. We are all delighted with the news of oil down in Cork. Up north we may envy these Cork people; they seem to get the best on every occasion and we certainly wish them luck if they have actually discovered oil and gas because it will be of tremendous advantage to the country.

No outsider could blame us if, in the event of oil or gas being discovered, the Government tried to cash in on that effort. After all we have witnessed in the past 12 months what other well-established companies have done in the Middle East. They have trebled the price of oil coming into this country. If we discovered oil nobody could say we were unreasonable if the Government took a large slice of the profits to ensure a better standard of living for our people.

The 20-year concession of tax eexemption was made a few years ago when there did not seem to be any great possibility of finding oil or gas and when oil was not as valuable as it is now. If the present Government feel like changing the law for the benefit of the people I would not oppose it.

Criticism was made of the Government for not setting up State companies to exploit these minerals for the benefit of the nation. The State companies which have operated up to now have done a great job, but they have been operating on the surface where it is comparatively easy to assess what is at stake. Anybody will agree that when you explore under the earth you are taking a financial risk. If somebody takes a risk with their own money that is their own business. If a State company were to take a financial risk with a large amount of money contributed by the taxpayers, there would be criticism from those who had advocated the operation in the beginning. If it was a success they would take the credit but it was a failure the company would be blamed for investing the taxpayers' money in a white elephant. We have seen this happen in other operations.

I should like to see excessive profits taxed. We are only a developing country and not very long established. During that period, irrespective of what Government was in office, we had to build up the country, something which the present generation do not fully realise. We did not inherit very much from the British Government except a legacy of bad housing and roads. It is to our credit that without a penny from any other country we have progressed so far. We should then expect that if speculators come into this country they stand to gain immensely. However, the Government should take a reasonable profit in order to improve our social services.

There has been talk for many years of the establishment of a smelter and there have been many discussions in the papers as to its location. I do not know the cost of it or what materials would be available for it when established. The Minister should consider the matter if there is an employment potential in it for our people or for people in areas where there are many unemployed at present. Unfortunately, we still have a large proportion of our people unemployed. We may be on the eve of a breakthrough. We do not want to do anything that would discourage any firm with capital from coming to Ireland. We do not want to tax them out of existence. But we do know from profits and accounts published that mining and smelting is a very profitable game if you come out on the lucky side. If that happens there should be some method whereby we could charge them on a tonnage basis on what they are producing or adopt some method whereby the Government would benefit from such an operation. There must be a marked gain in revenue so as to provide good living standards for our people from any enterprise which eventually turns out to be very successful and makes a great profit.

As I said at the beginning, I am not an expert on mining or on stocks and shares. I am an ordinary man who takes a look around me and sees what is happening. I know from experience that mining is a very difficult, hazardous and unpredictable occupation. There will always be people who will venture in—fools often venture in where wise men fear to tread. I know many people have taken a risk and have been ruined financially. There are others whom this risk will not deter. If they come to Ireland we will treat them reasonably well. They could not expect us to hand everything over to them and allow them to go off with all the profits.

I welcome this Bill as a limited measure to improve the way in which we are developing the natural resources of this country or allowing them to be developed for the benefit of the people. I welcome it because it will repeal the 20-year tax exemption which was granted in the Income Tax Act of 1967, for profits arising from the mining of scheduled minerals; and because it will replace this with a system of tax allowances dating from April of this year. I believe, however, that this is a very limited measure which reflects thinking which may have been relevant a few years ago. Indeed, the Minister said it was based on the recommendations of an interdepartmental committee set up in 1971. It is my view however that this Bill is not sufficiently related to the context of 1974 and to the immediate future crisis over the next few years: it does not take into account the vastly-changed world situation, particularly in relation to the availability of energy and raw materials or the very serious balance of payments problem which the countries of western Europe and countries of the world are going to have because of the increased costs, particularly of oil and also of food, fertilisers and the sort of base metals which we are discussing in this Bill.

I would also submit that the debate itself does not reflect the radical change in world circumstances, in which we should be examining the natural resources which we are fortunate enough to possess. It is in this context we should look at the way in which we can safeguard these raw materials, the way in which we can get sufficient expert advice on how to cope with serious problems over the next couple of years. We need a coherent policy on the way in which we can benefit ourselves, first of all. As the old cliché says, charity must begin at home. But we must also play our part in the international effort to assist the developing countries; the "fourth world countries" as they are now called, who do not have any natural resources at all.

Therefore, I propose to set this particular Bill in a challenging framework which I believe we have not examined with sufficient seriousness. I welcome the opportunity to look at this whole question of the exploitation of our natural resources. The Minister mentioned an inter-departmental committee which was set up in 1971. He also made reference to previous attempts to exploit our own natural resources, and Senator Russell also made reference to these previous attempts: Yet, this past experience has no bearing on the immediate present and the situation from now on, because there has been a radical change in the balance of power in the world and the consequent attitude towards resources and raw materials. I should like to have some indication from the Minister that this is not the end of governmental control but a very preliminary step in a series of measures which will allow us to adjust to this radical, new situation, which will allow us to benefit as much as possible from the fortunate circumstances that we have this mineral wealth.

We shall have to face up to a situation in which we must meet very serious balance of payments problems which we and other countries will encounter in the next few years to pay for the increase in oil prices. I would welcome some information or indication from the Minister of the degree to which there is a concerted study by the Government, being conducted in the light of this change in world circumstances, which is the context in which we must assess this particular measure. I join with those Senators who have urged the development of a smelter here and the processing in so far as possible in this country of the raw materials and mineral wealth which is found beneath the soil of Ireland.

The old problems of getting capital to do this no longer exist and we would get the capital, the expertise and any other assistance necessary to a small country. I think we can now call the tune on this because of the vastly changed world circumstances. I should like an assurance from the Minister that a genuine attempt is being made to exploit the feasibility of establishing a smelter to process mineral wealth in this country with the vastly greater benefits entailed for this country. Those who feel that any international mining concerns might express either anger or irritation at the attitude of a poor country like Ireland are being totally unrealistic in present world circumstances. We can in fact call a very considerable tune now, because of the urgent need for precisely this mineral wealth and raw materials. The Government should be sharply aware of just how limited a measure the removal of a 20-year tax exemption is, instead of congratulating themselves on it.

We must assess this problem in the light of the immense efforts that will be necessary over the next few years to exploit the existing resources, to try to find new sources of energy and new sources of raw material in areas where they have not been found before, preferably in areas such as western Europe where the political problems are not as evident as they are in the Middel East, for example.

Therefore, I feel that a great deal of the debate here and in the other House on this subject is out of date. It does not take into account the vastly changed world circumstances in this area, it does not take into account the urgent need of multi-national companies and of governments to find and exploit the raw materials that we have, the minerals that we have, as part of an ever-increasing demand and as necessary in order to compensate for the attitude of the OPEC countries or the raw material producing countries in other parts of the world—for example in Latin America where they are calling a much stronger tune than we would ever want to or be advised to call on raw materials.

What I would fear is that our thinking would not adjust to this new circumstance. I would fear that we would not have the expertise at the time when it is needed and I would fear that we would not even have the imagination to use the expertise to call in assistance when it is required. There would be no difficulty in getting the capital to exploit and process in this country our own raw materials. By doing so we would benefit ourselves most substantially from this exploitation.

The way in which I believe this could be done to maximum advantage would be by substantial Government participation in this exploitation and processing in our own country of the raw materials and, of course, of the energy sources which become available in the country. We must not look at this problem even from last year's perspective. We must relate it to the predictions and the evidence of a totally changed situation and of the very real problems which will face the countries not only of western Europe but of the world in general because of a totally changing situation. Anybody who thinks that I am exaggerating has only to look at the estimates of the World Bank about the named deprived developing countries who do not have any leverage because they do not have any energy sources or any raw materials of their own and who are on the brink of starvation. The larger the number of people one talks about the less real the problem seems. The World Bank prediction is of one billion people on the brink of starvation unless there is an emergency fund of $3 billion this year and probably $4 billion or $5 billion in the next couple of years as concessionary aid to rescue them from disaster and death.

This, then is the dimension at a world level of the problem in which we see ourselves as a small country, very dependent on energy resources from outside—very dependent on imports of oil and other materials— with a vastly worsening balance of payments situation in that respect. What have we got? Where can we look at the moment as a small still largely agricultural country in an attempt to redress this balance except to the fortunate awareness that we have now found raw materials in the form of mineral wealth and of the potential for oil and gas exploration around the coast.

I do not think I would be able to assess the technical and expert information on this but I have a political awareness of the dimension of the problems which we are facing and which other countries in western Europe are facing. There is a good deal of doubt as to whether democracies are flexible enough to cope with the particular problems which we will be facing. I should like reassurance from the Minister on several points. I hope this is not the last measure we will see in relation to our own raw materials in the current year?

Debate adjourned.