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Seanad Éireann debate -
Thursday, 27 Jun 1974

Vol. 78 No. 9

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

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

As I indicated when speaking on this Bill last night, I welcome it as a limited measure in that it does repeal the tax exemption for profits arising from the mining of the scheduled materials which had been granted by the Income Tax Act, 1967. However I was arguing that it is only a very limited measure and does not at all indicate the radical new approach which I would argue is imperative if we are to benefit from the natural resources which we find in this country.

It is important if we are to cope with the extraordinary and quite different new problems which challenge this country and other countries both in Western Europe and the world. Last night I said that the balance of power in the world has changed as a result of what was called the energy crisis and as a result of the steep rise in oil prices with the consequent serious balance of payments problem for countries.

That particular problem is not unrelated to this subject of mining and mineral wealth in this country, because precisely the same situation can and, to some extent, is occurring in relation to exploitation of mineral wealth. Developing countries with mineral resources are beginning to adopt a similar attitude to the OPEC countries—the oil-producing countries. I believe that this will continue and that they will adopt a similar attitude. They will say: "We want much higher prices for our materials; we want to nationalise"—this is happening to a very large degree—"we want to control the degree to which our resources are being exploited; we want to process and benefit substantially from our own resources."

The result will be that a shortage of base metals will become more acute and the need for alternative development will become still more critical. We, in Ireland, are in danger of not being equipped to cope with our own situation or to benefit to the greatest degree that we can from the mineral wealth which is in our country, so that we can use it in a positive way to cope with the vast problems of the balance of payments deficits which we will be meeting as a result of the increased oil prices. We must cope with the tensions and the distress generated by galloping double-figure inflation in this country. This measure does not show even an indication of a governmental awareness of the degree to which we must harness the resources we have to meet a radically changed situation. Therefore I should like to see more indication that the Government are trying to adjust to these new circumstances.

As I said last night, the Minister in his opening speech talked about an inter-departmental committee set up in 1971. I re-affirm here that this is not at all a sufficient basis on which to introduce either this legislation or any such legislation in 1974. We must re-examine the whole situation of our natural resources in the light of the last three months, six months, and the last year, with a knowledge of how much the situation has changed and what a very different problem will face us over the next three to five years. We must do it by making available the expert information which we need and the technological experience and the backup which we can now demand because we have the resources of which the world is becoming critically scarce. For that reason I do not agree either with the intimidation in the Minister's speech or in the speeches of some other Senators that we are a small country and that we do not have the capability or the potential to develop our own resources.

We now have sufficient leverage to call a very substantial tune in this area. The Government can argue for and develop a governmental participation in the assessment and exploitation of our natural resources and their processing, and formulate an overall policy of the extent to which and at what speed we develop our mineral resources. We must be aware that these are a wasting asset. We must know, not only in relation to this country but in global terms, what the asset is and to what degree it ought to be conserved or exploited. We would be extremely foolish not to have a radically different and accelerated approach to this problem.

I should like therefore to put to the Minister some rather more specific questions in this area. I appreciate that this Bill is to tax profits arising out of mining. The Minister may not wish, or may not be in a position to answer the questions either because they do not relate to his specific area of responsibility or because they have not been examined at a sufficiently developed stage at governmental level. I would put it to the Minister that if they have not been examined they should be in the forefront of Cabinet thinking and that he, as a very senior member of the Cabinet, ought to be in a position to give an indication of the degree to which the Government are aware of and are equipped to cope with both the radical new dimension of problems and the completely new position in which we find ourselves in relation to both the energy crisis and the exploitation of natural resources.

The more specific questions I should like to put to the Minister are, first of all, to what extent is this Bill a limited first step in relation to mining and the development of mineral wealth in the country? To what extent will it be followed by much more radical and substantial measures which are part of a Government intent and strategy to participate in and to have a substantial control over the exploitation of mineral wealth and its processing?

Secondly, to what extent is this Bill a first step in a realistic appraisal of the extent of the mineral resources in the country and of the necessity to have a coherent policy which takes into account the radically changed and still evolving circumstances? To what extent are we aware that what happens in some faraway developing country with similar resources which adopts a radical policy, affects the level and the value of our mineral resources? To what extent are we flexible enough to introduce sufficient Government control of exploitation of our natural resources to allow us to adapt to this dimension of problem?

More specifically, to what degree has the feasibility of Government participation in exploitation and processing of our mineral resources been examined in the new context of having sufficient leverage and of having the ability to demand that those multi-national companies who wish to exploit mineral resources in this country must do so in Irish terms with sufficient participation by the Irish Government? This must be done in a way which will allow the Irish Government to have overall control of conservation of this wasting asset, and the degree to which it will be processed within this country with the spin-off benefits which that would have for the Irish people and with the capacity that would give us to cope with the very severe problems which we will face in relation to balance of payments, inflation and so on.

In the light of Government policy in this area, to what extent have we already invited, or are we prepared to invite into our country the expertise in a technological and economic sense which will protect us from being used by multi-national companies? These companies know very well how to compensate for their difficult experiences elsewhere by exploiting a small, perhaps insufficiently aware, country like Ireland. Unless we have a global perspective in relation to our own mineral resources and unless we go significantly further than the terms of this out-of-date measure in relation to the taxing of the mineral wealth of this country, we will be exploited.

We welcome the present Bill because it changes the previous incentive of the 20-year tax exemption. The 20-year incentive was necessary at the beginning but it was not necessary when the Tynagh mines were found to be so productive. It is high time for the change to be made. I am pleased that the change was made after prolonged consultations and that the policies proposed here are in line with those operating elsewhere. We are, we hope, at the start of mineral development. The Navan mines, with their tremendous possibilities, should be followed by similar discoveries in other places. Therefore it is proper that the Government should be wholly involved and concerned with monitoring the development as it progresses.

The present Bill does not offer any prospect of immediate tax return to the Exchequer. That is understandable because we must allow for the expenses incurred in exploration before true profits can be computed. Therefore the return to the country is in the long-term. The figure of £125 million over some long period is a highly speculative one.

The return to the country will be much more in the creation of employment. It is really the shin-off of the secondary effects that hold out the greatest hope in this area. We hope the smelter project will become a viable one. There are many areas which would be much more suitable than Cork harbour. This type of industry should be located in a very remote area where it would not create a nuisance. When this smelter project is reactivated again, I hope the Government and not the company concerned will call the tune. We know smelter companies would like to set up in the most favourable location, irrespective of the consequences. The Government should ensure that this does not happen. They should have a very definite zoning policy regarding the location of such potentially dangerous and dirty industries.

I mentioned the great pay-off we expect from the high employment involved in the mining industry. That is something which needs to be guided and developed. On the one hand we must ensure that the environmental control is at the highest practicable level. We do not want eyesores such as disfigure many other countries. We want the Government to exercise real control over the activities of the companies in this regard. This should be a continuing control and should have ever-increasing standards. It is only now countries are becoming conscious of the environmental problem associated with many industries, but especially with mining. Countries are putting increasing pressures on the mining companies. Because mining companies are international companies they are exceedingly difficult to control. We should not delude ourselves that we can control them better than others. Other countries will succeed in the years ahead in compelling those mining companies to contribute towards the preservation of the environment. That battle will be a continuing one. We will be able to impose conditions on them in five years' time that we just could not attempt today. In ten years' time I hope we will be able to impose still higher standards. These should be the standards that more powerful countries have been able to impose on those national giants.

With regard to the question of employment, we must learn as rapidly as we can from other countries. People should be encouraged to be thrifty. Otherwise we may be faced with a position such as confronts parts of Norway at present, where wage-earners as a result of affluence squander their money at weekends on drink and so on. When the assets are gone people would be in a worse condition than at the start. There is a real educational problem.

We are fortunate in that we are only at the beginning of this. We should make a real effort to ensure that what happened elsewhere is not repeated here. That applies not merely to mining industry but also to offshore gas and oil. They will create the same problems of affluence for a small group who work very hard and put up with difficult conditions whether in mines or on rigs in the ocean. People must be advised on how to cope with this problem for the benefit of their families and the community in which they live. These are the real problems. The amount of the tax yield is insignificant compared with facing those problems in a proper way. We must succeed in leaving our country better for having found these resources than we were without them.

I wonder if more teeth could be put into the Bill to encourage continued exploration. If we are going to create a mining group within the country people whose way of life is mining should be assured that their livelihood continues and that when one mine runs out others are coming into production. The only way to ensure that is by continued exploration. While I know there is the permissive clause here that costs incurred against exploration can be written off against profits, I should like them to qualify for certain of the reliefs here—being able to allow past profits to be written off against profits. However, there should be some commitment that a certain percentage of the profits in any one year have to be put into exploration in that year. In other words, we want to avoid the company deciding that they would just mine out what they wish and then leave the country after that. Would it be possible to introduce an amendment to that effect, or would the Minister have any idea how we might put the pressure on to ensure that exploration is a continuing process for those who are operating the existing mines?

We should also need to expand very rapidly our own geological services and corresponding departments in our universities and technical colleges so as to ensure that we were not relying merely on these companies for advice and for knowledge as to where the most likely further finds would be or indeed for the evaluation of anything that might be found. We should at this stage have a commitment to developing our resources. We should be prepared to expand, as rapidly as we can get technical staff, into creating independent centres of geological and mineral exploration, acting either through the universities or through the various State offices co-ordinated in some way. We should strengthen considerably our own efforts and potential in this field.

I welcome the Bill as far as it goes. I realise fully the difficulties that face a small country in trying to grapple with and control these international giants and I only hope that in the years ahead our control will move step by step with the control we see other and more powerful nations being able to impose on those companies especially in the field of environment and in the field of community and labour development.

I do not propose to speak at excessive length this morning on what is obviously a subject of very great importance. I had some doubt as to whether I should speak at all because, though of a different nature to his, I would have to make a like declaration of interest to that made by Senator Russell last evening, in that my professional firm advise the chief company whose happy, fruitful discovery has led to this legislation to combat the evils that are thought to flow from their happy, fruitful discovery. I thought about this because it is right that we should declare an interest. I am sure that my colleagues in the Seanad will know that it does not at all affect the views I express, which would not be the views of that company.

I have had no discussions relative to what I want to say here today. It did not seem to me that merely because my firm took instructions from this company I should be forever silenced from making a contribution to a matter which had interested me long before I received the instructions from them. Indeed I should say with regard to that that I acted for a very large number of the firms which engaged in prospecting work in this country including one in particular which incurred considerable expenditure long before even the first tax holiday was introduced in 1956. Some knowledge of the subject should not silence me. Perhaps it will become clear that what I say really relates to the generality of the situation and I hardly refer to the detail of the matter with regard to any interested party. Should I do so, it would be merely incidental.

I understand the problems the Government were faced with in reaching the decisions enshrined in this Bill, From most of the contributions which have been made I gather that, if there is a public criticism, it is on the whole, a criticism that this legislation, which withdraws a tax holiday and introduces a new set of allowances, does not go far enough in the withdrawal but goes too far in the allowances proposed to be made. My view is completely different. It is possible that the Government, as a pragmatic matter in producing legislation which would allay public feeling with regard to this, had little option but to introduce legislation of this kind. If I had been a member of the Government I could not have persuaded myself that I was entitled to withdraw a concession on the footing of which very large sums of money had been invested by many people, a great majority of whom were resident in Ireland. I could not have persuaded myself that it was right to withdraw a concession in so far as that withdrawal would affect existing companies which had outlayed their moneys on the understanding and had made their calculations on the basis that a particular type of legislation would be there for the benefit of the companies who were raising the money.

However, I can see why people could reach a different conclusion. For instance, there was the outcry, based on the idea that a group of people, a foreign company, were sitting on scarce exhaustible Irish resources which they could take away for their own personal advantage. Public enlightenment was such with regard to this that I do not think we could have begun to have a rational discussion on this matter until we got that particular thing out of the way. Why have the Government introduced this legislation? Why were the committee established in 1971 to consider the possible changes in tax as well as in relation to royalties? Why has this all happened? It is possible to say, although there is a degree of hindsight of course involved in this, that the concessions made in 1967 were excessively generous. A concession, incidentally, was being sought and I believe was being required when the concession of 1967 was made. In other words, the four-year tax holiday followed by the second four-year period of the 1956 legislation was not, in fact, fully satisfying the interested parties.

The reason for all of this is a complete failure to grasp the problems involved in relation to this. It is funny that we are debating this issue. There has been a Departmental committee. I know that the rubrics of it do not require the Department or the Government to publish their report, but it would be such a help to us all if we knew, for example, whether everybody agreed with the recommendations. What was the other point of view? What degree of information did these people have? On foot of what set of facts did they reach their decision? Was the statement of the facts disputable or not? Do we all agree with it? It would be useful to know if the Government at the end of the day reached a decision on foot of an argument which was satisfying to us who are outside the Government as well as to those in the Cabinet who had the duty to do what they have done. I think that is unfortunate.

To go back, I think that probably one must expect that there is a general feeling that the concessions given in 1967 were over-generous. This has led to a consideration within the Department with regard to this. I wonder how much real study has been made by the Departments concerned regarding the whole question of mineral resources, the whole question of the relationship—forget about Ireland for the moment—of modern industrial developments to the availability of resources. How much examination have they made of the whole structure of the business of starting off with the discovery and then the development of that discovery? There seems to be an assumption that we go over to a tap in the corner, turn it on and take a glass of water; that that is our water and why should we let somebody else come in here, walk over to the tap, turn it on and take a glass of water.

It is not as simple as that of course. There is no doubt that the whole situation would be utterly outrageous that we should be allowing foreigners— let us assume for a moment that this was an entirely foreign company; this is disputable and I think inexact in relation to the beneficial ownership of the shares anyhow—let us assume, which is not true, that the companies here were multi-national corporations and were coming in here with their great resources and just running away with what we have. That is not true either. In fact, no multi-national has been involved in the discoveries. If I am correct I think four relatively small companies have been making these discoveries. These are Northgate, Tara, Silver-mines and Avoca. To go back to my simile of the glass of water, the mining position is not quite like that. It is much more like the situation of somebody in a desert who is extremely anxious to find water and there happens to be a well somewhere which, with the expenditure of very scarce resources available to the people in the desert, can be discovered by somebody with pertinacity and the flair and determination to take all the risks and on the basis that he and his family are going to get a good chunk of the water in the well if they do actually get it but with the risk that they will expire in the process.

There is no mine actually existing in an economically significant sense until it is discovered. It is assumed that it is all there and that everybody knows all about it and that there are, say, seven people down in the Geological Survey Office who, if they only took time off, would discover all the resources everywhere and then it would be a simple question of the Minister for Finance going over to London and getting the necessary cash. This is not the situation. We shall be in serious trouble unless as a country we learn to face facts and to examine the clichés that are thrown at us and to remember that things said often enough do not become true by the fact of their being said often enough.

The public are pushing the Government towards a kind of legislation, towards a kind of policy which is wrong, based upon a misconception of reality. We as public men have a very serious duty to inform the public so that they understand what they are talking about. There are vast areas of the world which are still unexplored. Let us forget for a moment about the club of Rome. Let us assume that they are wrong and that the whole world can sail along in its present kind of conduct, that on this matter the socialists and capitalists agree. It would be very interesting for the Seanad to engage in a debate as to whether we should not all be wearing hairshirts or whatever you wear when you are cutting back and whether we should not all be giving an example to the world of the kind of life that men will have to live when we use up all these resources, but that would not be right for this particular debate. Let us assume that the world wishes to continue to do what it is doing at the moment. If it is to be able to continue to do what it is doing at the moment it will have to make enormous discoveries of new resources all over the world.

At this point in time there are vast areas of the world unexplored, and from the national point of view as distinct from an international point of view. There are people here who are very concerned about the underdeveloped areas, as I hope I am myself. We are going to help them by making discoveries, although in the short term it may have a bad effect on the Zambian metal prices. However, in the long term the more discoveries that are made the more help we are going to be able to give to the world. If that is so we must encourage people to go about the business of discovery.

A mine is not there until it is discovered. It is no good, for example having a factory on the Aran Islands producing marvellous things to satisfy everyone in the world if these goods cannot reach the mainland. They are only there when they are obtainable. A mine is not discovered without great difficulty. It is not discovered without great risk or without great cost. We must recognise that these operations are costly and risky and that few people are prepared to pursue them. We must frame our policy in this light and get rid of this curious blockage, which is partly anti-foreign, partly anti-landlord—this curious syndrome in which there is an element of envy, an ordinary natural envy, this feeling that these people have got a wonderful thing which we all could have got.

These people have discovered for Ireland a marvellous thing which without their discovery would not be in Ireland in the economic sense of being in Ireland because it is only in Ireland when it is known to be there. I am not a geologist and I have no idea of geological time but let us call it geological time—ages and ages. It might have been lying there for another set of ages.

On that particular point it is perhaps worth knowing that one of the very big international companies had a licence to explore this particular area and gave it up. Then these people took their prospecting licence, went on and made their discovery. It is impossible to talk about mining in Ireland at the moment without referring to this very great mine.

Could we look at some actual facts with regard to the cost of discovery. In the Canadian Mining Journal of April, 1973 Cranston and Martin worked out that in terms of cost and dollars, we can forget about inflation, every discovery in the period 1946 to 1950 cost $2 million. This is the average cost of what must be spent before a discovery is made. In the 1966-1970 period that cost had increased to $15 million. This is one of the side effects of technology.

Technology has been referred to in this debate as if it now got rid of the necessity for the prospectual flair, the individual skill. This is not true. Technology has increased the range of ability to discover but it has also increased the cost of discovery. These are facts worth considering and I should like to be assured that they were considered by the inter-departmental committee. There are many sides to this argument and many countries to be surveyed which are at different stages of economic development, which have different social systems and different political traditions. If changes are taking place in one country, is it right to assume that these changes are in the right direction even for that country? In 1971 the average cost of one Canadian ore discovery was $27 million.

A calculation was made by the Australian mining industry, taking the period of ten years to 1971-72 and this again confirms the Canadian estimate where the Australian average, relating significant mineral discoveries to mineral exploration expenses, worked out at $20 million. That does not guarantee a major discovery. There might be no Navan in that. If there had not been a Navan we would not be having this debate. We would still be wondering if we could further improve the holiday to get somebody to go around and continue to search. What about the prospects of success?

The United States Government's strategic minerals development programme surveyed the period for 1939-49. During that period there were 10,071 prospecting licences granted. Of these 1,342 were worked and abandoned and one successful mine emerged. The odds were 10,000 to one in the range covered by that particular case. This is in relation to the grabbing of what is not there until it is discovered.

In Canada a company called Caminco which has some interests here now had surveyed its own operations during a period of 42 years— 1927-1969. One thousand properties were examined and 78 of these were found worthy of major exploration expense, that is, exploration expense of $100,000 a go, and seven of them became operable mines. A prospector's financial ability to pursue the prospect must be looked at by the Department before he is given the right to go ahead. If one's expenditure does not result in producing something, all is lost. It is completely at risk. Hard work has been put into the project but there is no return. There are no second prizes. There is no place money in this business. You win or you lose. If you lose you lose all. Do those people who are arguing that the Irish people are being robbed of their resources state to the Minister that he should take millions of pounds from the taxpayer or that he should persuade some financier to give him millions for this operation, to engage in the risk involved in this type of exercise? This kind of money is only available for this kind of operation in a free society to the people who can spare it for that kind of activity and who are prepared to take that risk. Are we to take money from people who do not wish to engage in this kind of risk? Are we to tax them down? Are we to force their savings? This is the bit in the puzzle that none of the people against international capital will face up to. Are we to replace international capital, talking generally, by a development dependent upon our own savings? I should like to see any of you facing the hustings on that basis. Are there to be compulsory savings? That would mean a reduction in the standard of living. It would mean a cutting back in the accelerating social programme that we are all so keen to further.

Unless we can establish and develop our industry on the basis of a stable community, generating revenue, these programmes which the Government wish to maintain would have to be cut back. We should look at what is the actual situation here.

From 1956 there were 2,090 prospecting licences issued. There were 90 companies involved. As a result of that operation, there were three economic ore bodies and two marginal ones established. Of these four are in production. That is a rate per operation of .25 per cent. From 1961 £38 million was spent to bring four companies into production. To the most recent date I have seen £3,500,000 was paid to the shareholders. The £38 million had not been recouped in earnings. That does not take into account the £6 million of totally abortive expenditure engaged by the various companies involved.

There is a distinction which is generally made and one which the Minister and one of his colleagues have made also. There seems to be an assumption that in some way mining at the end of the day leaves merely a hole in the ground whereas investment in industry other than mining is on a longer continuing basis, in other words that when one particular hole is exhausted that is the end of the mining industry. There are a lot of holes in the ground in Canada but at this moment after 100 years of mining industry in Canada with all these holes left behind their exports of minerals is in the order of £2,000 million. The assumption is that once a company has organised itself with suitable finance it will bale out. Of course, its funds are committed for prospecting and exploration.

There is something to be said, arising out of what Senator Quinlan said, for examining the kind of inducements we should offer to ensure that the moneys made out of mining activity go back into prospecting here because, of course, international companies will be free to prospect everywhere. In fact, one hole in the ground leads to another; that is the history of the mining industry. The funds become committed to this kind of activity; the people's minds run in this direction. They are mining men; they are miners. George Orwell called the miner a sort of grimy caryatid upon whose shoulders nearly everything that is not grimy is supported. I take that Orwellian sentence as a fairly sound proposition to account for the whole of modern industry. The miner's activities lie at the foundation of the whole of modern development. Without these resources, because of the threat to their existence, because of the possibility of their scarcity, all modern development is cast into doubt as to how long a life it may have.

These activities are of supreme importance to the whole world. That is true whatever view you take of the nature of the social organisation there ought to be. They are in this thing; they like the business; it is risky but they are men who take these risks and, in fact, tend to go on doing so and have done so. This may sound surprising but the Canadian example is not a bad one. When resources in a particular area are used up the funds seek them elsewhere. What has happened in Ireland? This is proven already and arises by implication from what the Minister said in his opening speech in the Dáil. This happened in Ireland. Tynagh mines is not yet a hole in the ground; it is on its way to becoming one, but in the course of the using up the Tynagh mines the very same people, admittedly with another company, went off and found Navan. The very same people who found Navan may go off and find another mine and so on. It is of enormous importance that the Government and the people engaged in public life should look at the realities and should rethink their whole view of the mining industry. If we do not have a right view of it then we have no proper policy about it and we do not have right legislation.

There is a feeling that it is a less worthy activity, less useful a contribution to the economy. We can dispose of the hole-in-the-ground argument on the basis that one hole in the ground is replaced by a potential further hole in the ground by the people who found what was in the first and will find what is in the second hole. When this discovery is made it has an enormously beneficial effect on the economy. Look at the Canadian export figure of £2,000 million a year. I am just taking a recent figure; I have not checked it. The figure here is £20 million at present. That could be, and I hope will be very much more but there is a very low import content involved in making these exports which is not true of many exports. The multiple effect of incomes generated in mining is notably high. The release of the economic forces made by mineral discoveries, I believe, can be seen to enable new countries to develop and stride forward into the circle of developed nations.

Take the Canadian position. It is an industry now 100 years old and it is worth knowing—I am not going to go into details but the Minister will probably concede—that the concessions in these new sets of allowances are not as good as even the existing set of Canadian allowances. They are certainly not as good as the allowances which existed in Canada before the change and they are certainly not as good as those that existed before the tax holiday was introduced in 1956.

During a period of favourable tax treatment in Canada a fine and considerable industry grew up. As a consequence manufacturing industry has been established to supply the services needed by the mining industry, to take the profits of the mining industry. It generates industry both in relation to what is leading into and what is to come out of the activity. I think we must face the facts with regard to this. It seems to be infinitely more important that we have a fine exploration programme going forward here. Getting that launched is much more important than the question of who is going to launch it, who is going to be the beneficiary of the discoveries which are made. The community is the major beneficiary because the final income which remains behind is, in any case, insignificant in comparison with the overall benefits to the community in terms of employment, services and so on.

In Canada there has developed also in the universities tremendous skills which are available for the industry and which are required by the industry. That kind of demand for professional skill, even for solicitors, is beneficial to those on whom the demand is made. I would like to see the kind of sober assessment, which was difficult to make in the situation we had last year, being made of the benefits to the community of mining activities.

In the course of his speech in the Dáil the Minister referred to the fiscal changes taking place in various countries. I think this should be said so often that people would wish we would stop saying it in relation to all our industrial and commercial activities, other than those where we had this export tax concession. When they talk about nationalisation of this, that and the other thing they should really be brought back to the fact that the State is a partner as to 50 per cent in all commercial and industrial activities in the sense that—it may be a sleeping partner—it gets one half of the profits. This seems to be a fairly good position to be in. It is not going to be 50 per cent here with the adjustments to be made in the light of the concessions.

There seemed to be a suggestion that we are making a move which all other wise countries, such as the Philippines, are making and that we are right in doing that but one of these sober countries is Canada. Another is Australia. What has been the effect of the Australian fiscal changes? Canada's situation is enormously different from ours. It has established a vast mining industry which has had 100 years of favourable tax treatment during which it was built up. But let us look at Australia. According to the statistics on mineral exploration published by the Board of Census in Australia, the money being spent on exploration in 1968-69 was 73 million dollars; in 1968/69 it was 118 million dollars; in 1970-71 it was 161 million dollars; in 1971-72 it was down to 117 million dollars; in 1972-73 it was down to 90 million dollars. Its prospect for 1973-74 is 65 million dollars. As a result of these brilliant tax changes the amount of money being spent on exploration in Australia, which is cited to us as an example to follow, has been reduced by 62 per cent.

I am asking the House to assume that it is a good thing that money be spent on exploration, that it is a good thing to continue to be looking for resources that are urgently needed by modern industry if modern industry is to go on. I ask you to forget about ecology for the moment. There are other ways of dealing with that.

We can assume that argument to have been completed. In mid-1971— this, I gather, is one of the great tests of activity in this field—there were 280 diamond drilling rigs in Australia. Two years later this had fallen to 100. Drilling contractors were seeking work overseas; the smaller exploring companies had disappeared and this is one of the features of the situation. They were all small men, men who had gathered together their pence from the Canadian Exchange and who were having a fling and hoping to God they would find something; none of them were "big cheese".

All these companies in Australia have disappeared because of the tax changes—it is no longer interesting for them. Australian-trained drillers are moving overseas. If it is as easy as all that for foreigners to come in to take our scarce resources, why are not we busy taking these somewhere else? Why do we not ring up a number and go off and pick up a zinc mine somewhere? Is it as easy as all that? If it is, these extraordinarily selfish, cruel and avaricious capitalists of Ireland are blind, and dull as ditch water. What is the reason for it? If they are foreigners with us, why are we not foreigners with them?

I do not think it is as easy as all that. There is a great deal of preparedness required, willingness to spend money and to pursue that money with hard work and a good deal of knowledge. We are talking about the lifeline of the modern industrial world; discoveries make possible a reassessment of the degree of scarcity of these resources. I am quite optimistic about this because of the extent to which exploration has not taken place over vast areas of the world. That activity should be encouraged. If I were one of these fellows I would not be seen dead in Ireland at the moment, where the climate of opinion has forced the Government to do this kind of thing. I do not think there is hostility from the Government or from the Revenue Commissioners. This has been forced upon them by an unenlightened public opinion, which is unfriendly and not welcoming. Their line is: "You find and we shall grab".

It is always interesting to hear Senator FitzGerald even where he fails to put his own individual point of view. It is certainly stimulating and instructive to get lists of facts and figures and to be able to make some comparisons of our situation, in quantitative terms, with the situation in other countries.

I would like to emphasise particularly one remark he made. It is the fact that an advisory committee have been sitting for some time. Presumably, they have given their report of deliberations to the Government. We should be able to read this report; it should be made public and we should debate it in the Seanad. Then we would know what is at the basis of Government thinking in drawing up legislation for our mining industry and for the whole of the oil and gas industry which we hope will develop around our shores. We should be working towards the framing of some sort of overall policy.

Certainly, the Bill that is before us now gives very little indication of an overall policy that the Government should be preparing and working on and to which we should be contributing. Most people agree that 20-year tax holiday was too generous in its original conception. As Senator FitzGerald pointed out, this was drawn up in an era when the common belief of most Irish people was that we were a poor country as far as mineral resources were concerned. I can recall my geography classes where all the Irish textbooks spelled out the fact that Ireland had few mineral resources—just a couple of coalmines that were not going to last much longer and a few small deposits of other minerals. It was within that context that the tax legislation on mines, which we are repealing, was drawn up.

The 20-year tax holiday was designed to encourage people to risk their money and to risk their capital in an effort to discover mineral wealth. Whether we like it or not, it certainly had the effect of inviting exploration and prospecting. The companies involved may be basically Irish but, of course, in this situation we had to draw on foreign expertise. Therefore, the 20-year tax holiday has produced results and there is no question that it has totally changed our view of our mineral resources. It is not just the view of what has been discovered, but there is a widely held view—one reads it in newspaper reports by serious correspondents and in other magazines dealing with economics, finance and industry—that there are good prospects of further discoveries of minerals and of oil and gas off our shores.

Therefore the context in which we are working has changed and we now realise that the view which was held about ten years ago was not a true one. The work of the explorers and of the prospectors has made us more aware of the mineral wealth which we now know exists in certain quantities. It is not unreasonable that we should alter our legislation. The problem is to find a balance to ensure that a sufficient proportion of this wealth remains in the country, and, as Senator Quinlan has said, that sufficient proportion is reinvested in further exploration and at the same time that the legislation which is drawn up does not discourage further discovery or further prospecting. In fact, this must be encouraged.

It is not simple. Members who have spoken, saying that this legislation does not go far enough, have a very strong point and wish to see a more vigorous Government attitude to mining, to exploration and to the total mineral resources of this country. They wish to see clear indications of Government policy.

Apart from the two measures which have been mentioned, the ending of the 20-year tax holiday and the awarding of certain allowances in this Bill, there is no general indication of Government policy. I should like the Minister to give a clearer indication of over-all Government policy. As Senator FitzGerald and myself have stated, we should like to see the inter-departmental committee's report published and have it debated in this House in a realistic way. This debate has been a good one. We could contribute to policy and we would fulfil our duty as Members of the Oireachtas if we debated a possible White Paper and were able to make suggestions about the policy the Government should follow in this area.

There are two ways in which the Government can influence the operations of mining or prospecting companies. One way is through the legislation we have before us, that is by taxation, and the other is by the Government being more vigorously involved in the running of the companies, by having Government nominees on the boards. The Government should act on this suggestion. It would ensure benefits all round. Senator FitzGerald has eloquently made the case for being careful that we do not tax prospecting and mining companies out of existence. This would be short-sighted. When the time came to establish our own industry to continue the work, if it was a totally nationalised industry, we would have financial problems and difficulties in obtaining expertise from abroad. The entrepreneur has an important role to play in this area. The Government should enact legislation to have Government nominees appointed to the boards of prospecting companies. This is one of the ways in which we can ensure that the Government view is put forward to the companies. One cannot view just one particular aspect in isolation: there must be a general policy. Again, as Senator FitzGerald has pointed out, the mining industry generates further industrial activity at both ends. There is a processing industry, when the mine is developed and when there is a sufficient level of mining activity; there is the ancillary industry, the pre-mining industry which provides equipment for prospecting and mining.

One of the dangers in a small country like this is that these ancillary industries at both ends of the mining spectrum would not be based in Ireland, if for example, all the equipment were imported and the ore exported unprocessed. We are neigh-bours to Britain and the Continent with their large industrial bases, their smelters and their own mining industries of various types. Government nominees on the boards of mining companies could do a great deal to ensure that the ancillary industries were developed in suitable places in Ireland. There is no doubt that there are environmental problems. There are problems, for example, in the siting of smelters. Certain smelters create few problems for the environment. Depending on the ore being smelted, there can be considerable devastation. One has only to go to some of the areas of the Ruhr in Germany where smelters have been in operation for ten to 15 years to see the devastation of the countryside. Ireland is a small country and cannot afford to make mistakes of this kind.

There has been much talk of putting a particularly noisesome smelter in a very scenic part of Cork harbour. This could very well destroy a wonderful amenity and an area which is of great tourist attraction. This is the type of problem which could be solved expeditiously if the Government had nominees on the boards of mining companies. The important liaison work which could be done in the development of the industry is something which I hope the Minister will consider.

The Norwegian Government, for example, have produced legislation in this connection, particularly in dealing with the problem of off-shore exploration. The Norwegian Government have a stake in all the exploratory work and also in the actual extraction of the oil or gas. We should be prepared to take a stake in the companies, if only by appointing Government nominees to the boards.

I should also like to see further encouragement for Irish-based companies. If the company is Irish-based, there is no reason why there should not be a bias in its favour in the tax laws and in the legislation governing the regulation of the industry. What we want to ensure, and this will keep the wealth in Ireland, is that Irish people are encouraged to take risks, invest money and become generally involved in the mining industry to a greater extent. We should not cavil at giving specially favourable conditions to Irish-based mining industries. As Senator Russell has said, why should we not also encourage Irish people who wish to prospect abroad? There is something to be done in that area too. Perhaps these Irish people prospecting abroad could be facilitated in their taxation problems when they return to the country with their money. Every encouragement should be given to them to work abroad if they so wish. If a mining industry develops here, as we hope it will—it has already begun to a considerable degree—we should encourage our people, if they find suitable conditions, to prospect outside Ireland. There is something to be said for giving them special treatment just as I feel we should give Irish-based mining companies specially favourable treatment for their operations in this country.

Senator FitzGerald pointed out that there has been a change in the tide of public opinion here. Of course this is natural. Ten years ago people here were under the impression that there were not any minerals in this country. In the sense that Senator FitzGerald talked about, there were not—in a sense they are not there until they have been discovered. We hope that there will be further discoveries and that there will be incentives for people to continue these discoveries. The fact that public opinion has changed in that the view is held that what wealth is there should be used for the benefit of this country. This is not an unnatural feeling provided it expresses itself in a way which is constructive and unconstrictive. Then, there is nothing wrong with this feeling. It is one of the feelings the Government will have to respond to.

It is the Government's job to find the right balance in drawing up legislation for dealing with the companies which will work in Ireland, but I think there are considerable dangers if large multinational corporations come in, because they have such efficient ways of compensating themselves for any losses they incur in any other area of operations. They certainly are expert at exploiting countries which are not aware of their own potential. We have got to be careful when these multinational corporations start operations. They need not be discouraged but they must be carefully supervised. There definitely is a need for Government nominees on the boards of all corporations involved in the mining industry, particularly in the actual mining side of the industry in Ireland. I hope that when the Minister replies to the debate he will be able to give us some further indication of overall policy and particularly of the advice he is getting from the inter-departmental committee which are keeping a watching brief in this area.

I welcome the Bill. It is a clear indication that the Minister is serious about reform in the income tax code. This is something which no Minister has done in the history of this country. We have got our own Parliament. It took some considerable time to start reform of the income tax code. This Bill proposes to embrace in the tax code an extra £125 million income in 20 years, otherwise 6.5 millions per annum, which I think is hardly a figure with which I could agree. The people of the country were expecting to get much more from taxing of the mines than what the Minister estimates.

I know that mining companies will be quite satisfied with the Bill that is presented by the Minister. They will have no objection whatsoever to paying that amount of tax per annum. They are serious about developing mining in this country. They have given hefty scholarships to have mining technicians trained in the Regional Technical College in Athlone. That is a clear indication that they intend to stay here and develop the mines. It is only natural that the State and the community would benefit as a result of wealth accruing from these mines.

I do not think any sane person could justify giving a 20-year tax exemption. I think Senator Hanafin was embarrassed in his opening speech when trying to make a case that the present Government should not have done anything about the 20-years tax exemption. If they had been allowed to do that it would have been full speed ahead and the companies involved in these operations would have completed the work and exhausted the mines before the period elapsed, leaving nothing except holes in the ground filled with rubble and water.

It is extraordinary that it is where the good land is that these mines have been found. We are losing a natural amenity when the mines are exhausted. I do not think it will be possible to redevelop the land or reclaim it when the mining has come to an end. Many people who invested in these mines became rich overnight. As Senator Noel Browne said, some became millionaires. Had the Government not moved, there might have been a very serious situation created for the over taxed workers of this country. The first sign of that had been the formation of an organisation called NITRO. They certainly are looking for reform. We know that reform will have to come slowly. It will not happen overnight. I am satisfied this Bill provides concessions which we never got before. Something will have to be done to give greater relief to people who are overtaxed at the present time. This is one of the countries where the people who have most of the wealth are not taxed. I refer to mining companies, land speculators and, to a lesser extent, big farmers. The Minister has done something about all these matters. It is very welcome as far as the workers of the country, and I, are concerned.

The Bill is a move in the right direction. If the Revenue Commissioners were as ruthless with the mining companies as they are with the ordinary taxpayer, the Minister's conservative figure would be exceeded, and the mines would become a greater source of wealth which would help the economic and social development of this country.

Senator Noel Browne made use of the occasion to attack the Labour Party, and the Ministers in particular. He is still a member of the Labour Party. If he had any sense of honour he would resign from the party and not go around creating a situation where there is character assassination. He uses every single occasion possible to attack members of the Labour Party. He probably expects to be a martyr and to be expelled. I doubt if he will get the opportunity to become a martyr. I was hurt by Senator Browne's remarks about Ministers who were not here to defend themselves. The Minister for Finance escaped fairly well, possibly because he was present. When we are dealing with such an important matter as the Bill before the House it should be dealt with in a serious manner.

I have just heard from Senator McAuliffe the best argument I have heard for not joining the Labour Party. Earlier, I very much enjoyed the contribution of Senator FitzGerald, although I must admit that I did not agree with one word of his conclusions. As a callow youth I had the great pleasure and, indeed, also the great benefit, of sitting at his feet on many a fine morning and listening to him lecture. I admired then the range of his erudition, humour and his great humanism. That admiration has increased since then through listening to some of his contributions here in this Chamber. He was one of those who helped to inculcate in me that attitude of scepticism which is the hallmark of academic training and it is ironic that I am not in the least bit convinced by his comprehensive reporting to us of the difficulties that face the mining industry in terms of exploration costs, the size of investment finance and the return on capital.

He recognised that in economics, which pretends to be a science but which is based to a great extent on eighteenth century philosophy, the basic justification for profits is an ethical one. Profits are a reward for risk. There has latterly arisen in economics the problem of trying to justify profits in a non-risk situation, particularly in the field of the multinational corporation and the integrated firm. If profits are based upon risk and if profits are in a sense commensurate with the degree of risk, then one cannot plead a special case that because risk is high in a particular form of economic activity it must have particular types of protection.

In a capitalist society risk taking and earning profits are synonomous. Profits are the motor power of the economy. If there is no profit in a particular form of economic activity or enterprise it follows rationally from the system that there will be no investment within it and, for that reason, one requires social forms of investment if that economic activity is to be pursued.

There is not an industry that could not fail to put up the type of argument and special pleading that Senator FitzGerald so eloquently presented to us here today. For example, one would not find the great advances in medical science if there was not such a high degree of financial return on pharmaceuticals. The pharmaceutical industry is notorious in terms of the risks involved and in terms of the huge expenditure required in fundamental research. That research is not carried out for the good that these companies can do man in terms of helping his health. Rather is it carried out in order that there can be an economic return on capital invested.

There is no argument, therefore, in saying that because an enterprise is a high risk one we should not impose social controls or social constraints on its activities and there is no justification for giving it special consideration.

In terms of a national policy in relation to national resources I welcome this Bill for what it is. In my view, it is nothing more than a beginning. In so doing, I have to declare my own interest and say that my philosophical attitude on this would be the one shared by members of my party and that is a socialist one in relation to the use of national resources and their control. Quite clearly and obviously my remarks will be biased because of that particular basis.

The Bill, in itself, should never have been necessary, irrespective of the very eloquent defence put forward by Senator FitzGerald for the risks involved in mining, because these concessions should not, in the first instance, ever have been given.

Senator FitzGerald asked: are Irish capitalists different from their ilk in other countries? I indicated that they are. That difference, I believe, is part of our national character, which is too lethargic. In our school days we were told that this was a country in which there were no natural resources, except peat, and that if there were natural resources we did not, in any event, have the capability, the capacity, the energy, the drive or the money to exploit them. It was a craven and cringing attitude. As a result, exploration licences for land and sea were sold for a song particularly in the palmy days of the Department of Industry and Commerce in the late 1950s.

Yet one can go back into the last century and find, for example, in the publications of the RDS that there was common belief that there existed at least the possibility of mineral resources in this country. One can also refer, for example, to the IBEC Report in the 1940s. Yet there was not a child, I am sure, up to 1960 that was not informed in his geography lessons that this country was one which was devoid and denuded of mineral wealth.

Having said that, it would in my view be a continuation of the craven policy of the past if we did not regard this Bill other than as a beginning of a national policy covering the development of our natural resources, whether it be base metals, oil or gas. We should see this Bill as a foundation upon which we will build State participation in metal extraction, in smelting and indeed in process industries based upon the smelting processes.

In the past this country has remained poor because its exploitation of its other great natural resource— grass—has not been carried to the highest form of economic processing. We exported the product of that particular resource at an unfinished stage —cattle on the hoof—the "value-added" was carried out in another economy. Irish capital was exported to that economy in pursuit of our export and Irishmen went to that economy too in pursuit of Irish capital. It was, and is, a ridiculous situation. National income is, in itself, simply an aggregation of "value added". If we export the possibilities of the "value added" naturally we depress our national income. There would simply be a repetition of that disastrous policy in respect of one great natural resource if we were not now to insist that "value added" to the maximum will occur within the confines of our economy with regard to base metals mined in Ireland. For that reason I am saying that this Bill no more than constitutes the beginnings of a policy on resources. We have now, for the first time, the possibilities of using a resource which will give us the central core to the economy which we have lacked for so long, and that is in metals and medium scale engineering.

One can use an analogy in respect of the optimum utilisation of this resource by referring to oil, which is affecting us all very considerably throughout the western world at the moment. The Arabs have long been exploited by outside companies. Their product has been exported in its most unprocessed form. But they have now realised what has been happening to them and they recognise their great power. They have taken steps to redress the economic balance between them and the companies.

Other countries too, such as the Norwegians, have learned in the oil area. Unfortunately, other countries, such as Britain, have never learned. It is an economic rule of thumb that whatever the British do economically is automatically wrong. We should not imitate them. Senator Alexis FitzGerald referred to another country which is now beginning to exert some national muscle over the use of its natural resources, namely, Australia. He criticised the impact of their tax policy and by reference to that he showed a graph that went downwards in terms of investment in exploration. That is mainly true, but one would have to look at a cost benefit analysis from the Australian national point of view and ask what is the relationship between output and consumption. What use does the Australian Government have in mind for the exploration and utilisation of those resources? Perhaps a slow down in extraction is to their national advantage.

We have now the possibilities presented to us, through this Bill and through other measures which I hope will follow it, of developing a metals industry and, upon it, medium scale engineering. If that can be effected within a period of about 15 years it will change the technological face of this country. It will not only do that by giving us a truly integrated and comprehensive industrial structure, but it will also have financial benefits of which the Minister for Finance is aware and to which he referred in his speech. I am making reference, of course, to the impact which a national mining and metals industry will have on the balance of payments.

My party's policy has been referred to during the course of this debate. It is this. The natural resources of our country should be developed to the maximum benefit of the Irish people as a whole, in other words, spelling it out institutionally, there should be maximum State involvement, within the constraints imposed by capital available and political factors. I understand, and Senator McAuliffe made reference to it, that Senator Browne criticised the Labour Minister who is involved in this area, namely, the Minister for Industry and Commerce. I should like to make one comment on that. In a public debate at our own party conference last year between the Minister and the Senator it was the advice of the Minister that was taken by the party. That explains, to a great extent, the chagrin of the Senator and his attacks on the Minister.

As I said at the beginning, my personal approach to this whole Bill is from the point of view of a socialist but it is one which is shared now by others who do not share that ideology. It is shared by the Arab community. It is shared by the emerging peoples of Africa, for example, Zambia. It is shared by the Australians. It is shared by the South Americans. That is to say, that where a resource exists it must be exploited in such a fashion that there is a balance between those who are given the right to exploit that resource and the people in whose country that resource exists. We have got to establish the principle, particularly in relation to exploration costs, that if private enterprise discovers these resources, then it does not have an absolute right to exploit them without social controls, and that any exploitation can only be carried out in conjunction with the social partner of the State.

However, the last speaker referred to one very important point in terms of national attitudes on this matter which appeared to disconcert Senator FitzGerald. It is one to which the Minister very wisely referred in his speech. The people do not wish to see a situation in which a very great resource of theirs is exploited in such a fashion that only the very few benefit while ordinary people have got to shoulder a burden of taxation, which many of them regard as being beyond their ability to pay. They wish to see the taxation burden spread equitably. Essentially then I regard this Bill as being part of the over-all taxation reform which has been begun by the Minister in a most imaginative and encouraging manner. One might also say, a most courageous manner.

Finally, I regard it as a foundation upon which this Government will construct a policy in relation to all natural resources so that we will have, in this country, a proper balance between private enterprise and social involvement in the exploitation of our mineral resources which will bring us the benefit of outside expertise and outside capital while at the same time ensuring for the people of our country an adequate financial return on the resources which are theirs as of right.

The title of the Bill seems to limit the observations one can make on it. It is a Finance Bill and it seems to me that we have to confine ourselves as to whether or not in the circumstances of finance and tax a good job has been done. As mentioned by Senator Halligan, it was on the basis of the advice of the Minister for Industry and Commerce that the Labour Party's attitude to the mines was changed. In changing their minds they realised that they were not saying to him that the social order is unchangeable. What they were saying to him was: "You have got a job to do. There is a way of getting at some money that would be beneficial to the community." The question arose as to whether to compromise at the particular time and in the particular circumstances how much the compromise and how to compromise. Having heard the observations of my own party and having looked at the Bill, I am satisfied that if the Minister had adopted an intransigent attitude I frankly do not think we would even have got this far on the question of dealing with the mines and we would not have the more effective type of taxation that we have now. Like Senator Halligan, I see this as a beginning. Because of the circumstances in which we found ourselves and the factors that were placed before us having regard to how other nations tackled the problem, I felt that there was room for compromise and the thing to do under the circumstances was to compromise. There was a question of procrastination in trying to get your needs. For that reason it would have been everything or nothing at this time. There were a large number of choices but I am quite sure that the Minister having regard to the fact that it was difficult to satisfy the needs of all the people and after consultation did deal with the strength that he had. Having read through the Bill, I am satisfied that the speculators have not been allowed to oversell their ideas. I can see promise within the Bill of further things to come. I am not speaking about the smelter because I do not think it is relevant to this particular Bill. It is a Finance Bill and we are discussing how to get money in the interests of the people of the country in general. The Minister, in my opinion, did a fair job of getting this money without losing sight of the objective. I hope the objective is still there. We should get a great deal more out of the full potential.

The Minister had to look at the needs of each side in dealing with the introduction of taxation. He probably had to revise his strategy to some extent based on consultation and the views offered by the various interests throughout the country. When dealing with mines it must be noted that not only do they run out but they become smaller. Electronics and plastics are involved. There are large areas of employment in these fields. If enough cannot be got out of the mines and other industries take their place, those changes affect the lives of hundreds of people. On the basis of the proposed taxation when mining starts to go down these other industries can grow.

It does not appear that £125 million will be got out of this project, nor is that the full exploitation of what is available. As a realist, I recognise that each side can exercise a certain amount of power on the other. The Government will not get their way all the time. The Government and industry do not always hit it off so well nor do the Government and employees. There is some power with the investors and they exercise this power to some degree. If I were to speak on a basis other than that of finance and taxation, I would not make the same observation. I am dealing with this matter in a pragmatic manner.

This is a finance Bill, a development of the taxation system. It introduces some improvements in regard to taxation. There was only a three year exemption in Canada, for example. They had already got away with seven years here. There is scope for further development. I do not like using the word "exploitation" having regard to my belief in socialism. It could give the impression, wrongly, that everyone's possessions would be taken over without regard to their rights. The Minister has held council with his associates including the Minister for Industry and Commerce. He had to evaluate how the other countries got the most out of it. On the question of mining, neither the investors nor the State could get sufficient out of it without putting in a certain amount.

To become intransigent about the question of applying the taxation in the manner in which it was done would show an eagerness to get away from dealing with the problem. If taxation had not been introduced we would have some of the community arguing that there was a fear of criticism on the part of the responsible Ministers. This would be a sign of defeat. I do not make my criticisms on the basis of disparaging the Bill. I welcome it as a beginning. I do not accept that this is the whole situation. There is a great area between everything and nothing. Based on accumulated experience any experiment and research should be taxed in a short time to show the public that the problem was being tackled. Reading through the Bill, I feel that the Minister was over-cautious in dealing with the problem. He could not be accused of procrastinating.

It is said that treasures of the heart and soul are riches. That is not much use to a man who is without a bean. He is looking for employment. If this Bill allowed people to pursue their interests in a way which would help the employment situation and would not push it back from the point to which it had reached and the potential it showed, the unemployed should be satisfied to see this type of development, apart from the taxation which will be introduced. They can recognise that if the mines decline, that effects only one aspect of the economy. Other industries can grow and develop as those who have money to invest will not be satisfied with putting money into mines for 20 years. When they become money-orientated they will put money into other side issues. If the mines are not paying, they will move out of the area.

Senator FitzGerald stated that Irish people should have a look at prospectors in other countries. They are not looked upon as foreigners. In any event, we appreciate the money which is coming in and the expertise and the scientific knowledge these people bring to the country. However, this does not establish their full right to exploit to an excessive degree the mineral wealth of the country. This can only be done on the basis of what is good for the people. Whether Irishmen go out and do so in any other country or not the same argument holds.

I will wind up by saying that I hope this is a beginning of much better things to come. Before there are any other major developments, such as those we read about in the paper the other night regarding natural oil and gas, I hope there will be a coming together of the minds within Government, and not in their own separate ways, as to what is the best way to tackle the problem from here on. The people should assert themselves in a way that will, in the long run, be to their advantage. In deciding that policy perhaps one or two people with money will get hurt but many people could get hurt if we did not make up our minds to go the whole hog and follow it up.

Having examined the matter jointly and having had the benefit of all points of view including the attitudes of the people who feel that the mines should be nationalised, and so on I would say as an individual—and I think I could speak for some of my fellow party members—that if we found all the facts were against us and that there was only a certain limit to which we could go we should come to terms with the facts. At least before anything is done there is a need to get together. I say that openly and without reservations.

There is a difference of opinion with regard to the question of the development of our natural resources. That problem should be resolved not so much on the basis of one side being dominant over the other but on the basis of a full examination based on our present experience and our acquisition of knowledge. Any further dealings we have about the granting of licences or dealing with people who are making attempts at mining, who are in the field or are looking to get into the field, should be on a very deep, inquisitorial basis. We must look right into every aspect of it before we finally come to a decision, and this should be done jointly.

Finally, I should like to say to the Minister—in the circumstances he is not the happiest man in the place having regard to the power that each could exercise on the other at a particular time and having regard to the position which developed—that I should like to welcome the Bill and hope that some of the observations I made will be helpful. I hope also that this will be the beginning of better things to come.

I am grateful to Senators for the manner in which they received this Bill. Everybody in the House without exception gave it a welcome, although in some cases the welcome was spelled with a small "w". Some aspersions were cast on the value of the Bill. My principal congratulatory prize must go to Senator Hanafin who, with tongue in cheek, criticised the Bill as being a piece of window-dressing and then assured us that Fianna Fáil believed in getting the greatest possible return to the community from the mines. The Senator then criticised the Bill because he said it was so Draconian it might discourage investors. He then told us that when Fianna Fáil were in power they had provided incentives to encourage mines and when they were put out of power they were about to extract maximum benefits. That is not bad for a person who did not tell us in what way they had succeeded in getting a return from the industry or how they were going to go about extracting the maximum benefit in a way which would not have discouraged investors. He seemed to think this Bill was going to do that.

May I interrupt? I was dealing at that stage with new mines.

I see. Senator Hanafin did not tell us what he considered to be a new mine. For instance, would he like to tell us whether he would regard Tara as being a new mine or an old mine? Would he consider that Tara should be exempt from the provisions of this Bill?

I had in mind new explorations.

In other words, he would not apply this Bill to Tara. If that be so it would mean that the estimated £125 million, which I emphasised was in 1973 figures, would in fact be something in the region of only about £50 million. In other words, the lion's share of the benefit which he said Fianna Fáil believed in getting for the community could not be obtained if the Tara mine was to be excluded. I am afraid Senator Hanafin in the long run has disclosed something material because his own speech was a perfect piece of evasion. We now have, on his disclosure at this stage, obtained a clear indication that his thinkinig, and presumably the thinking of his party, is that the profits in Tara would not be available to the Irish people.

If I was evasive in what I said the Minister is much more so. I did not mention the Tara mines at any stage. Is that the one to which the Minister referred?

I asked Senator Hanafin if he was considering that the Navan mine was a new mine or an old one and I understood him to say that in his view a new one would be one that had yet to be explored. The Navan mine is already discovered. It is ripe for development. If I understood the Senator correctly he said that the Mining Taxation Bill should not apply to it.

I was dealing with new applications for licences for mining.

Yes, in other words it would not apply——

Despite the politeness of the interchange between the Minister and Senator Hanafin I would ask the Minister to desist from these invitations to Senator Hanafin to intervene.

I am very sorry but I wanted to clarify with Senator Hanafin some matter that was in doubt. What is not in doubt is the purpose of this Bill. Under this Bill the Government on behalf of the people will acquire a half-interest in Irish mines. The Government will be partners and will obtain through the system of taxation 50 per cent of the profits of the mines. I think that is a very significant step forward.

There has been criticism of the Bill that it does not spell out conditions which the Government would attach to mining leases and so forth. Of course that is a matter for the Minister for Industry and Commerce. It is a matter not for legislation but for inserting in the leases as they may be issued. This Bill is a finance Bill and is therefore, limited in its scope to deal with matters affecting taxation. There has been disappointment expressed by several Senators about the £125 million estimated taxation over the next 20 years. I would like to emphasise, as I said at the beginning, that that is based on 1973 figures and is itself open to a number of considerations which cannot yet be accurately estimated. For instance, while there have been published figures relating to estimated ore reserves many of these published figures have not indicated the grades of ore or the percentage of metal content. There is very little information about metal ratios, the rate of throughput, the percentage rate of extraction, capital outlay and operating costs and royalties payable. Of course, we do not know what will be the behaviour of world prices of metals over the next two decades. There are other matters, such as transport costs, which cannot be precisely measured.

It is reasonable to anticipate that in accordance with their very best traditions the Revenue Commissioners have been conservative in their estimate. Indeed, some figures which have been bandied about since the estimates were made would lead one at this stage to say that perhaps the estimate could have been increased to something in the region of £150 to £160 million, on the basis of present knowledge. But, as I emphasise, with increasing knowledge one might well find that that should be further increased. I doubt very much that it would decrease.

Again, it is important to emphasise that this estimate is based upon what we know about mineral resources. It is related to discoveries already made and does not relate at all to anything at all which may be discovered over the next 20 years.

Reference has been made by several Senators to the desirability of bringing offshore resources, such as gas and oil, within tax liability. I should like to remind Senators that I took the steps to bring profits from such development within the tax net in the Finance Act last year. If profits are made from offshore gas or oil, then the benefit will flow to the Irish taxpayer as well as to the users of the commodities because of the action we took last year. That is not to say that it might not be necessary to introduce a Bill to take account of the particular problems and difficulties of the oil and gas industries, particularly in relation to offshore development. That will be a matter for a Bill which, like this, will deal with the peculiar problems of offshore drilling and development. We shall face that whenever the need arises, which I think will be fairly soon.

Because of the limited time available, I do not want to deal with all the points raised in the debate, but I will deal with some of them.

Senator Hanafin referred to the mining activity in the Republic and contrasted it with the comparative lack of a mining industry in the North. He suggested that this was a consequence of the 1967 prodigal incentive of a 20-year tax holiday. It is important to recall once again that there is no company engaged in mining in the Republic of Ireland which was not engaged in exploration before 1967.

Senator Alexis FitzGerald referred to the undesirability of a Government going back on promises or undertakings. If somebody acts on foot of those undertakings, I accept that that is an undesirable thing. Very fortunately for us, it is not a consideration that we have to bear in mind in relation to the taxation of mines. No company has operated on foot of the 1967 bonanza. They were all in Ireland and active in Ireland before the 1967 unnecessary tax holiday was given to them.

Fortunately, there has been no breach of faith and we are right to be acting now before somebody is in a position to say: "Well, we have only come into Ireland after 1967 and, therefore, it would be a breach of faith to go back on what we understood to be the position in Ireland". The activity in Ireland has mainly stemmed in recent times from the 1956 legislation, introduced by my predecessor, the late Deputy Gerard Sweetman.

There were others—a minority in Ireland—such as Senator Ted Russell, who had faith in the mining possibilities of Ireland when the rest of us were still influenced by Eleanor Butler's geological findings about there being no mineral resources in Ireland. We do not blame Eleanor Butler. She was only as wise as the state of man's knowledge then. However, there are people like Senator Ted Russell who had the foresight, courage and patience to be involved. They were very, very few and perhaps it is fortunate that Ireland has had such people and still has them. They have had the foresight and the courage and were ready to take risks where other people were too cautious to move.

Senator Hanafin referred to the possibility that this legislation might discourage investment in Ireland. This has been mentioned by the Fianna Fáil Party for several months past. It is about time they stopped it. They did it when we first announced our intention to bring this tax holiday to an end. The people who shouted loudest about it were some people who, naturally enough, were disappointed that they were going to lose the freedom from taxation. I and my colleagues have been criticised because, as we have spoken about mining taxation, we have also emphasised from time to time that there was no possibility whatsoever of withdrawing the exemption from income tax which was enjoyed by exported manufactured goods. We had to do this because no matter what is suggested to the contrary, or whatever might have been said by the Opposition or by any politicians, the facts are that the inquiries which the IDA are receiving from people interested in setting up manufacturing industry in this country are on the increase. Inquiries have increased substantially since the announcement about the ending of the mining taxation holiday. I hope that we will hear no more about this, because it is certainly most damaging to the interests of Irish workers and the people as a whole.

We had only one advocate of nationalisation of mines in this debate. That is not surprising because our people realise that nationalisation is not a panacea; it is something that cannot be done without paying for it. We already have considerable difficulty in acquiring sufficient funds to invest in agriculture, manufacturing industry, housing and other very necessary social investments. It would be entirely wrong, as Senator Alexis FitzGerald said, if the State were to deprive some of those essential investment needs of the funds that they require, in order to become directly and solely involved in the highly risky occupation of mining. It could not, by any sensible test, be justified.

The only other way in which nationalisation, referred to by Senator Browne, could be implemented, would be to start printing money to try to pay for it with devalued currency. That would have a most damaging effect upon the whole economy, even more damaging than the other method I previously mentioned. It was because the Labour Party conference realised the folly of confiscation and nationalisation that they accepted the advice of my colleague, the Minister for Industry and Commerce, that the right thing was to achieve a compromise of conflicting interests. That is what we have done in this legislation.

We, in Government, are hopeful that the State will participate in a very active way in the mining industry. The Seanad are bringing in an amendment on Committee Stage. This will provide that the various tax allowances in respect of exploration will be available to developing mining companies if they are wholly-owned subsidiaries of the company which explored and discovered the mine. These incentives will be available even though there might be State participation. We want to ensure that there is no avoidance. That is why we are granting this concession only where the developer is the explorer or is a wholly-owned subsidiary of the explorer. In order to facilitate the the participation by the State in the mining industry we will provide in this amendment that the incentives will be there even though the State may be involved.

Several Senators including Senators Browne, Robinson and Russell referred to the desirability of having a smelter. The Government are actively engaged in encouraging people already in the mining industry in Ireland to establish a smelter. I do not wish to say too much about it at present because the negotiations are at a sensitive and very constructive stage. We can look forward with confidence to the possibility of having a smelter in Ireland in the foreseeable future. The smelter is now an economically sound proposition because of the quantity of ore which we now know exists and which is about to be developed. With a little bit of luck we will be able to supply all the requirements of the smelter for a considerable time to come. There is a certain amount of spare smelter capacity in the world. It is a very costly business to establish a smelter. Notwithstanding all these considerations, the time has come for the smelter and we will see it emerge very soon.

Not on Little Island, though.

Senator Quinlan very properly raised this question of the location of dirty industries. We are surveying the whole country at the moment in order to consider the most suitable locations for dirty industries but the most suitable location is always in somebody else's back yard or nearer somebody else's property rather than one's own. It will not be easy for the Government to make recommendations in this field. They are bound to be resented by somebody or other.

Like the itinerants.

Yes. The dirty industries are like the itinerants. We are all for them so long as somebody else carries the cost and the disadvantages. Mines have been placed by nature. The mine must be developed wherever it exists. The same does not apply in relation to a smelter. There are of course certain constraints. The principal constraint is the desirability of having the smelter as near as possible to the principal source of the ore. If Senator Quinlan considers that factor he would realise that Cork Harbour would not qualify at the present time for that particular industry, whatever qualifications it might have for other industries.

I trust that this short survey of the points made in the debate will suffice. If, on my further consideration of the matter. I think that any particular points raised by Senators require further comment, I shall communicate directly with them.

Question put and agreed to.

When is it intended to take the Committee Stage?

Today, if possible.

The Minister may not be aware that a number of our Front Bench Members are in Brussels. It is likely that they would wish to have an opportunity of dealing with the Committee and Report Stages. The Minister can be assured of the fact that we should like to facilitate him, but since there was no notice of an intention to complete the Bill today I do not think I am being unreasonable in requesting the next Stage to be taken next week.

In that case I have no wish to create any difficulty for anybody. I would not object to it being left over.

There is a request from the Minister for it to be taken immediately and a proposition from Senator Hanafin that it be taken next week.

The only point I should like to make, and we should certainly like to facilitate Senator Hanafin and the Opposition generally, is that this Bill passed through all the Stages in the Dáil with an assurance from the Minister that he would introduce an amendment to cover a point made by Deputy Colley. Otherwise the Bill was passed unanimously. The Minister is now introducing that amendment. I wish to make that point clear in case there are any doubts about possible further amendments.

I would not wish in any way to be unreasonable. In that case, perhaps we could proceed today.

In view of the very heavy burden which would be put on the Minister with the Finance Bill and also that this amendment is coming in by virtue of a request from his own party, Senator Hanafin might consider allowing the remaining Stages to be taken today.

I am agreeable.

I am grateful to Senator Hanafin. However, I should not like to mislead him. There were criticisms of different sections of the Bill in the Dáil but I have given an undertaking to Deputy Colley to consider a point that he made and this amendment certainly meets that point.

It is a matter for the House to decide whether it is agreeable to take Committee Stage now and further that it agrees to take the recommendations, without notice.

I can see no useful purpose being served by delaying the next Stage to this day week.

I have no desire to make any contribution to this debate but I have been associated for the past 50 years with mining, I happen to be a very near friend of Mr. Hughes who, incidentally, is an Armagh man.

I think the Senator is making the wrong contribution at the wrong time.

People who speak most on matters are very often those who know least about them.

Agreed to take remaining Stages today.