Section 1 provides for an allowance of £4,600 for people aged between 65 and 75 years. I bring to the Minister's attention the fact that people over 65 years and widowed who are at the exemption level of £4,600 would benefit more if they did not avail of it. Taking the personal, age and PAYE allowances the amounts are equivalent to £4,600 and if they were availing of the exemption of £4,600 they would pay tax at 40 per cent whereas they would only pay 26 per cent if they took the other option. Some people in the bracket may not be aware of this and the Revenue Commissioners should let them know. I have already come across two or three cases where people would benefit more on the 26 per cent tax rate.
Finance Bill, 1997 [ Certified Money Bill ]: Committee Stage.
This has been brought to my attention and is one of the anomalies when people move from the exemption level to the standard rate of tax. We can arrange for the Revenue Commissioners to draw it to the attention of those affected by it.
While I recognise the Minister has made progress in the area of income tax, tax reliefs and the changing of tax bands, I and my party are concerned about imprudent political decisions in the area of public expenditure. Notwithstanding the excellent economic conditions, there is a need for prudent management of the economy to give real and long-term tax reliefs and make real and radical changes to the tax system.
I welcome the substantial increases in personal allowances made by the Minister to benefit both those paying the standard rate of tax and those paying the higher rate. I also welcome the increase in the age allowance from £200 to £400. It should be increased further because many people over 65 who are paid small pensions — for example, from county councils — are penalised for paying into a pension scheme. If this allowance can be increased in future, it will benefit our elderly citizens. We should also examine a similar increase for people under 66 on long-term pensions, such as invalidity pension. Many of these people, as well as those on small private pensions, earn less than £100 per week, which is not a large amount of money, and they are paying tax, which is not right.
The area of personal reliefs is one which depends on how we manage the economy overall and the extent to which the Minister can extend such reliefs. I endorse the last point made, especially the way pensions are treated. People make contributions to pension schemes throughout their working lives. The points made are not partisan or political but are ones we all share and are ones a Finance official should examine. In fact, it is not just such an official who should examine the area when one considers the negative impact a small professional pension can have on medical card entitlements, for example. People who have made prudent provision for old age should not be punished and there is a case for special arrangements to be made for pensions. I am sure the Minister shares that view but I am aware he has constraints, as have all Ministers for Finance.
There is a substantial improvement in this area as well as a recognition that elderly people have additional concerns on top of their additional costs. Many elderly people appear to be reasonably well provided for, but that does not stop them from worrying to a point middle-aged people would regard as excessive. Their concern is real. There is a problem with the interface between entitlement to social welfare benefits and the statutory State pension and these must be examined. However, bearing in mind Senator Roche's previous comments, these must all be measured against existing constraints.
I move recommendation No. 1:
In page 15, before section 4, to insert the following new section:
"4.—Section 154 of the Finance Act, 1994 is hereby amended in so far as it has application to an employment situated in Northern Ireland;
(a) (i) by the substitution of '5 consecutive days' for '14 consecutive days' in paragraph (a) of subsection (2),
(ii) by the substitution of the following paragraph for paragraph (b) of subsection (2):
`(b) one of which the individual concerned is absent from the State, and present in Northern Ireland for at least eight consecutive hours during the day,',
(b) by the insertion of the following proviso after paragraph (c) of the proviso to subsection (3):
`Provided that paragraph (b) (i) shall not apply to an employment which is subject to the provisions of Part III of Schedule 6 to the Income Tax Act, 1967, solely by reason of the employment being situated or exercised solely in Northern Ireland.'.".
This raises the thorny cross-Border issue, which is a difficult one for people who live on the Border. Something must be done, so in this recommendation we seek to avoid the double taxation of workers who work across the Border. I am surprised the Minister did not make provision for this in the Bill because it is a widely flagged concern shared by all sides of the House. I recall Senator Maloney specifically referring to it on more than one occasion. It would be difficult for the Minister to accept the recommendation I have tabled but there should be a commitment in principle to introducing a proposal along these lines to prevent a real problem in the Border area. If the economies on both sides of the Border improve, especially if peace becomes a reality in the North, we could find ourselves with greater difficulties. We are supposed to have got rid of borders and to adhere to the principle of free movement of workers and services. It is necessary to ensure taxation regimes do not impede such free movement. The taxation regime not only impedes it; it also actively encourages people to operate in the black economy, outside the law and in a manner disadvantageous to both tax administrations in the Republic and in the North. There is a need to resolve this. I accept it is difficult but it is something towards which I would like to see some commitment in principle.
There has been considerable debate on this and I am sympathetic to the plight of people who find themselves caught with Thatcherite salaries on the one hand and Republic of Ireland tax bills on the other.
There are a number of issues involved here. I am the first Labour Party Minister for Finance. Successive Fianna Fáil Ministers for Finance did nothing about this issue. The conversion of Fianna Fáil in Opposition to a sense of passion that the issue should be resolved contrasts with the extraordinary silence which characterised the occupancy of Upper Merrion Street by successive Fianna Fáil Ministers for Finance for many years, including the well respected Border Deputy, Ray MacSharry, who held the office with a good reputation. That is the first partisan observation I feel obliged to make.
However, there is a thrust to the argument made by Senators Roche and Maloney and by others in the Dáil. We should not lose sight of the standard principle in OECD countries and EU member states that taxation is paid on the basis of residence. The Senator is asking me to upturn that principle. Where is it to be confined if one starts? It is not possible to deal with the issue in the context of that principle.
There are ways in which the aggravation of the problem, caused by Thatcherite politics in Britain, can be reversed. First, I set up a working party after the budget two years ago and it reported making a number of recommendations on levies which have been implemented. Second, under Article 18 of the Double Taxation Treaty, Government employees on either side of the Border are taxed by the Government for which they work and are not deemed to be liable for tax in the jurisdiction in which they live, assuming it is different from the jurisdiction of the Government for which they work.
Changes in the nature and status of employment in the United Kingdom resulted in people who previously were deemed to have worked for the Government on foot of their employment by a local health board or education board or local authority institution, now being deemed, where these boards were changed in one form or another, no longer to be directly employed by the Government and consequently were not included in the tax exemption to which I referred. Many people who are directly involved in the cross-Border workers' campaign, some of whom I met as recently as yesterday, are directly affected by this.
Since there is no loss of revenue to the United Kingdom in respect of this and since the Irish State did not seek to attract this revenue, I propose to raise the matter with my friend the new Chanacellor of the Exchequer, Gordon Brown. I was unable to secure success in this regard with his predecessor or with Treasury officials. There are ongoing negotiations between both sides and it is possible, although it is a matter for the UK authorities to decide how they wish to treat that status. However, I will press the case with the Chancellor and that is probably the next step through which progress can be made.
With regard to the recommendation, it is not possible to interfere with the principle in this manner. Many of the arguments made by Deputies in the Dáil, which might be advanced today, referred to the problem of rural depopulation. That problem exists throughout the country and is not peculiar to County Donegal, which has been affected most by this issue and is the source of virtually all the agitation about it.
I welcome the latter part of the Minister's response, although I disagree with his earlier comments. There is no need to arm wrestle on a partisan basis.
The Minister recognises that particular circumstances apply in the case of County Donegal where there has been a long tradition of retaining the family home through migrant working. The difficulty has begun to express itself more profoundly in recent years because of changes which resulted from the application of what the Minister calls Thatcherite policies in Northern Ireland. I welcome the Minister's intention to hold discussions about this with the Chancellor of the Exchequer. It is true that depopulation is not confined to County Donegal. However, Donegal and other Border counties have a particular characteristic pattern of living which involves working away from the home. If we are still awaiting elections in November perhaps the Minister might be able to do something more substantial in October.
I seek clarification of this section for the heads of the Irish universities who contacted me about it. They welcome the provisions of section 16. From their point of view it represents a positive and constructive response by the Minister for Finance to proposals which were submitted to him last December by the Conference of Heads of Irish Universities for the consolidation of legislation on tax relief on donations to the universities.
Section 16(1) provides for tax relief on donations for four categories of projects. The universities are satisfied with the categories except (c), which deals with infrastructural projects. They are concerned that the guidelines referred to in subsection (2) (a) (i) might be constructed in a restrictive way to exclude universities from the third level institutions that will benefit from this concession. The guidelines do not form part of the Bill and are to be drawn up by the Minister for Education with the consent of the Minister for Finance. From the preliminary consultations between the universities and officials about the guidelines, it appears the Department of Finance wishes to exclude universities from benefiting under the tax relief concessions for donations for infrastructural development. The Department of Education opposes such an exclusion.
As the universities understand it, the Department of Finance's view is that infrastructural developments in universities would qualify only as part of a project under any or all of the other three categories of equipment, research and skills needs. This fails to acknowledge the reality of college campus development. It takes no account of the interlinked and interdependent use by the disparate disciplines and research programmes of a university's services, facilities, equipment and buildings, be they lecture theatres, laboratories, libraries or offices. In many cases it would make no economic or administrative sense to design projects artificially in order to conform to the infrastructural restrictions the Department of Finance seeks to impose.
The use of the guidelines to exclude universities would make nonsense of the central provision of this section, relief for gifts made to third level institutions. The universities have no problem with the application of the subsection on infrastructural development to Dublin Institute of Technology and the regional technical colleges. However, to find that universities were excluded from benefit would be ironic, if not also embarrassing, as a response to a proposal made in the first place by the universities to the Minister for Finance. To arbitrarily separate the regional technical colleges and Dublin Institute of Technology and the universities sectors does not make sense.
The universities are seeking a commitment that the guidelines referred to in section 16 (1) (c) and (2) (a) (i) will provide for the inclusion of universities among the third level institutions to benefit from tax relief donations for infrastructural development under this section.
I strongly support Senator Manning. On 25 March this year I raised the problems universities are currently experiencing with fund raising. If we are obliged to separate proposals to donors into categories relating to infrastructure, laboratory equipment and so forth, we could end up making applications which might not be truthful. It would be far better if the provision were straightforward and if universities were dealt with in the same manner as regional technical colleges and the Dublin Institute of Technology. I have a strong interest in this matter because I am a trustee of the Trinity Trust and I am aware of how difficult it would be to have two specific guidelines relating to the money being raised. I would greatly appreciate if the Minister accepted Senator Manning's proposal.
I support Senator Manning's suggestion. It would be perverse if this welcome measures were to discriminate against any part of the third level sector. The request of the universities is reasonable. I cannot believe the Minister would countenance the negative impact which the guidelines could conceivably have if they were to be implemented in the manner Senator Manning outlined. I hope the Minister can comfort us in this regard.
I welcome the support for this measure. It was a long time in gestation and was only finalised late in the process. There is an element of unpredictability about this provision because we do not know how it will work. We are giving third level institutions taxpayers' money by foregoing, in effect, money that would otherwise go to Revenue. We are allowing the institutions to campaign for this money and are trying to ensure that third level institutions and not just the universities who are well able, as we have seen in recent days, to articulate their case, will benefit from this. The guidelines have not been completed but the universities are in a very advantageous position in relation to attracting money.
I would be the last person to suggest that in awarding doctorates, be they honorary or otherwise, universities are motivated by such crass concessions or considerations as contributions. It is easier to get an honorary doctorate from Trinity College or UCD than it is from Carlow Regional Technical College. The needs of Carlow Regional Technical College are just as strong and pressing as that of any other third level institution. I would be more than happy to sit down with the heads of the universities to discuss the guidelines and what way we can use this system over the next couple of years. We will have to keep it under review. What would not be fair or reasonable is that by virtue of the status or standing of any one particular institution it would manage to attract enormous amounts of money because of the honour and glory associated with it. I commend the universities for the manner in which they have moved away from 100 per cent dependence on State funding to raising money on their own. Some of them have been more vigorous than others. Some of them by virtue of their standing and status and the extent of their network of graduates have been able to access more funds than others. This mechanism is designed to get taxpayers' money into the third level system in its entirety.
Our concern in the Departments of Education and Finance is that there be a degree of equity and justice in its allocation. Because we are into new territory and do not know how this will work there has to be an element of continuous review. With respect to the concerns expressed by Senator Manning, I would be happy to meet the heads of the universities, listen to their concerns — we are aware of some of them — undertake to see how this will function and review it. The reason the guidelines are not in the legislation is to give us flexibility in this area because we do not know what the pattern of donation is likely to be. It is designed to get additional funding for the third level sector. Our recent economic performance, and I refer to the last number of years, not just one Administration, clearly testifies to the benefit of what the 1961 OECD document referred to as "investment in education". The more resources we can get into the entire spectrum of third level institutions the better. How we do that and the way in which they will be allocated is a matter for the guidelines which will have to be kept under continuous review.
In response to Senator Manning's proposal and the response he has received from Senators Roche and Henry, I will be more than happy to meet the heads of universities to discuss this in some detail.
I am very happy with the Minister's response. This is new territory. The section is welcomed by everybody in third level education. It has the potential to do a great deal for investment and the continuing development of education. I am glad the Minister is open-minded and will meet the heads of the universities and perhaps some of the registrars and that the matter will be kept under review. If there has been a change in universities over the past ten years it is the realisation that they must go out and raise funds and that if we want our third level education to remain at a high level constant injections of funding are needed. I am not sure about the Minister equating the awarding of honorary doctorates as something akin to simony in the middle ages. From the point of view of somebody who was involved in fund-raising in universities, the only regret was there were not enough of them.
I thank the Minister for saying the universities are well able to articulate their needs because if they were not it would show that taxpayers' money was going down the drain.
Universities are not competing against regional technical colleges for funds, they are competing internationally. That is the problem. If taxpayers' money, which will be used for tax relief, is not given this way we will have to ask for further money through the HEA and the Department of Education. If we are to aspire to what the Minister for Finance, the Minister for Education and other Ministers want in the way of helping socioeconomic progress, it is essential that we are not 50 years behind in everything. It is well recognised that we have good research workers but we need somewhere to put them. This is an area in which we have great difficulty raising funds. We have to compete for such funds on an international basis.
Like Senator Manning, I would not like to think our doctorates were given out on the basis of "cash for goods" or something like that. It is an extraordinarily difficult area with which to deal. As one who has worked to raise funds I assure Members we do not just face competition from the regional technical college in Carlow, which is excellent and will I am sure attract funds for its own courses but, when looking for big money for infrastructural developments, one has to look abroad. I hope we will have the Minister's support in doing so.
Senator Henry's point that our competition is with third level institutions abroad is well made. As an ex-board member of Carlow Regional Technical College I accept everything the Minister said, there is need for investment there too. Senator Henry made the point that the real competition is abroad and that is where we will get significant amounts of money. I welcome the Minister's commitment. He has gone as far as he possibly can today. I would like to put on record that this is a very worthwhile section which I welcome.
The provisions in section 20 are worthwhile. The Fourth Schedule outlines farm buildings and structures for which allowances for the control of pollution apply. What worries me and many others is the issue of farm safety. Slurry pits, for example, are extremely dangerous. A horrific accident occurred recently at a slurry pit in County Wicklow. Tragedies have taken place all over the country.
In the Schedule, tank fences and covers, which are safety as well as environmental protection devices, are mentioned. Do safety measures also come into this? There needs to be more active encouragement of farm safety. Farm safety measures require investment and that kind of investment should attract the same basic tax breaks as any other kind of investment. Perhaps the Minister will elaborate on that.
This section deals mainly with full-time farmers. Will the Minister tell us if there is any provision in this section whereby part-time farmers can write-off the income tax they pay from their full-time job against that of their part-time farming job? Pollution control applies to full-time and part-time farmers.
May I draw the attention of the Seanad to a versional correction to section 20 which I am seeking to have made by the Clerk at the direction of the Cathaoirleach. It involves moving the asterisk after "structures", page 41, line 18 to after "1991" in line 17. It is a textual change for which I would like the support of the House.
I will direct the Clerk to make that change.
The Fourth Schedule to the Bill refers to tanks and fences. If safety issues are addressed in their funding, finance and construction, the costs will be allowable under this section. Senator Roche is right to raise farm safety. The Health and Safety Authority has looked at the issue on a number of occasions and there is probably room for improvement. Many of the activities associated with farming are dangerous. Many accidents could be prevented if there was greater awareness. Part-time farmers will also benefit from these measures.
I welcome the fact that part-time farmers can avail of this provision. If land is owned by the mother or father of a part-time farmer, can the son, who may be working but will probably benefit from the farm in the future, write off his tax against this? This would improve farm pollution.
The person who is paying tax on the farm can write it off. If the person who is working the farm, as distinct from the person who owns it, pays tax on its income, it logically follows that he or she will qualify for the benefits.
There are a number of small language schools throughout the country, some of which are not commercially viable and may be operating on a part-time basis. Can they avail of the tax measures under this section?
I presume they would have to be certified by the Department of Education or the Higher Education Authority. The section states:
"approved institution" means an institution in the State in receipt of public funding which provides courses to which a scheme approved by the Minister for Education under the Local Authorities (Higher Education Grants) Acts, 1968 to 1992, applies.
A private institution to which this definition does not apply will not qualify.
Section 26 introduces a number of changes, some of which are welcome. However, it seems there is a degree of inflexibility in the urban renewal scheme. The first urban renewal scheme, which applied to Bray, had tremendous benefits because it resulted in the worthwhile development of The Maltings, the upgrading of the Town Hall and the construction of another building, perhaps less fine, on the site of the former International Hotel. The most recent urban designation effectively supported the interests of CIE and applied to a number of sites. It seems that Bray is not unique. A number of areas designated in the last round of the scheme, although worthwhile, have been specific. It would be positive and beneficial if there was some flexibility in including adjacent areas.
I do not want to be parochial as it would be unfair to the Minister to mention specific areas. However, he will be familiar with part of the seafront in Bray which is immediately adjacent to an urban designated area. The urban designation in that area, CIE's backyard effectively, will not take off. If there was some procedure or mechanism whereby the Department could monitor urban designation areas and extend the area — in this case, to reach the seafront — they would become more viable. The Minister will probably retort that it is up to the local authority to observe the situation early on. Lobbying for Bray was not efficient. There are occasions in the urban renewal scheme where the areas designated are so focused that the benefits are limited. Some flexibility is needed to allow reviews by ministerial order. This would have the undesirable effect of the Minister being subject to direct lobbying. However, designations need to be varied in order to achieve the overall purpose.
I welcome the provision in this section for a special designated area in Rosslare Harbour, which will be beneficial. A number of ports could benefit from a similar injection. I did not press this as a recommendation as it would be opportunistic. An excellent report by Forfás has been submitted to the Government, which argues that we need a new roll-on/roll-off ferry for the east coast. Logically, Arklow should be designated as the port. Roadstone operate a huge installation on the periphery of Arklow, which would be the ideal location for the ferry. The hinterland of that site is subject to major investment on the Arklow by-pass and the N11. When the Minister and his officials examine what is to be done for Rosslare, an integrated scheme for Arklow could be considered. There has been considerable road development in the area, for which we are grateful. The idea of designating the port and land for a specific port related business park should be considered.
Successive Governments have accepted that Arklow has been devastated over the years. If a measure similar to those introduced for Rosslare Harbour and Knock Airport could be implemented — it would take time and should not be introduced in the Seanad by recommendation — an extraordinary breakthrough would be made in the creation of jobs. Successive Governments, Forfás and the IDA have tried to create more jobs in Arklow, but we have not reached take-off point. We need a politically adventurous initiative. The intitiative regarding Rosslare is good, but I would like to see freeport status granted to the hinterland of Arklow. There is a huge amount of public investment there and Forfás has already suggested the introduction of a roll-on/roll-off ferry. Will the Minister consider this?
There is an unusable piece of industrial land at The Murrough in Wicklow Town, of which I am sure Deputy Kavanagh has spoken to the Minister. This should also be looked at. I welcome the provision regarding Rosslare Harbour. As an island nation, we have never looked at our ports in a positive light. Our island status has been looked at as negative rather than positive and we have never really invested in it. I ask the Minister to consider an integrated programme around Arklow port. Perhaps his officials, while implementing the Finance Bill, could look at the two ports in Wicklow which I mentioned.
Some problems may arise in relation to the stipulation that 15 per cent of the work carried out under the urban renewal scheme must be completed before end July 1997. Such problems might include ownership disputes, appeals to An Bord Pleanála and planning decisions. It may not be possible to carry out 15 per cent of the work before this deadline. I welcome the extension of the scheme into 1998; the Minister is to be congratulated on that initiative. The extension will serve to tidy up and complete the work in the remaining parts of many of the urban renewal districts. Perhaps the Minister could consider waiving the July deadline stipulated in the Schedule.
I compliment the Minister and the Government on the announcement made regarding the designation of airports. This is particularly welcome in the western region, which has four airports — Knock, Sligo, Galway and Donegal. There has been much media attention over the past ten days in relation to Knock International Airport. Over the past years the population in the western region has been declining, but thankfully that decline has stopped and this measure will reverse it. We have observed the great pressure placed on services such as sewerage, transport, roads and so on in the eastern region. No such pressure exists in the western region. This decision will provide a new impetus to the western region and we can look forward to a new era of investment there. The people of the west now feel that something is being done for them.
In my Second Stage speech I stated that I attended the AGM of the Islands Committee in Westport where the comment was made from the floor that the biggest fear island people now have is that this Government may not be returned to office.
There are a few places in the west I would like to see included.
Was the comment made at a branch meeting?
People in the west feel that at long last there is a Government looking after their needs——
—— and ignoring the needs of people everywhere else.
Deputy Carey has been given sole responsibility for looking after the needs of the west of Ireland and he is doing a magnificent job, particularly for the islanders. There are four airports in the western region and the designation of those is a very welcome measure. We can now look forward to a new era of economic prosperity.
That goes to show how wrong Deputy Jim Mitchell was——
The Minister should be commended on the progressive nature of section 26. However, it is disappointing to note that Shannon town was not included in the list which was circulated. The Shannon Chamber of Commerce made a submission and met a number of Government Ministers some time ago in the hope of getting some kind of tax incentive status for the town. Members of the chamber of commerce were surprised to note that the extensive list published in the Finance Bill did not include Shannon town. Many of us were given to understand that there would be no change in the urban renewal scheme until such time as the existing scheme had been completed, although I appreciate that what is included here differs somewhat to the general nature of the urban renewal scheme currently in place.
Shannon town is a unique young satellite town which does not have the traditional centre and backing a normal town has. However, the population in the town is ageing and it is beginning to experience an increase in unemployment levels due to redundancies. The problems traditionally associated with other towns are now being experienced in Shannon. The Shannon Chamber of Commerce, which is a newly formed and progressive group, presented a specific case for Shannon town. The town is a very separate entity to the Shannon Free Zone and interaction between the two is limited. Many of the people operating in the zone live in Limerick and other parts of Clare. There is a genuine case for the provision of some kind of tax incentive to the town in order that it can bring a new dimension to it which is essential at this time. I trust the Minister will look favourably on this and will be in a position, when he prepares his October budget, to include Shannon town in some kind of tax incentive scheme which may not necessarily be the urban renewal scheme.
Kilrush and Lisdoonvarna also made applications for inclusion in the urban renewal scheme. Their applications are currently with the Minister for the Environment. I realise this is not a matter specifically for the Minister for Finance and that applications are referred to him by the Minister for the Environment. I ask the Minister to consider the position of these towns, which are located in the extreme west of County Clare in an area of declining population. There is a real need to provide an incentive to bring life back into these towns.
We constantly talk about regionalisation, and if we are serious about regionalisation policy we must provide incentives to towns in the west of Ireland to renew industry and commercial activity in these towns. Providing money to towns which are already buoyant and which have a high level of economic activity defeats the purpose of the scheme. Infrastructure is under-utilised in some towns while others are bursting at the seams and require new infrastructure to be put in place. The applications from towns such as Kilrush and Lisdoonvarna must be considered in that light.
I want to deal comprehensively with the points made by the Senators. Of the urban renewal schemes introduced in 1986, seven have, by and large, been very successful. They have also been very expensive. The schemes directed investment which existed in the market economy into specific locations where it might not otherwise have gone. The purpose of the scheme was to address issues of urban dereliction which were manifest throughout the country. We have extended the existing allocation of urban renewal sites for one year. We gave notice of this in January of this year and the consultants' report was also published at that time. The report was a comprehensive evaluation carried out on an economic and urban planning and design basis. The consultants made a number of recommendations for the next generation of urban renewal designated areas. The Department of the Environment is preparing guidelines which will be issued shortly to all local authorities, including those in County Wicklow to which Senator Roche referred. These guidelines will enable local authorities to prepare substantial and well presented cases for urban renewal.
In order to avoid local politics and the choices associated with it, the whole of County Leitrim was submitted for urban renewal status. While that may have been a wonderful decision on behalf of every county councillor in Leitrim, it was a lunatic decision from the point of eliciting a response from the Department of the Environment and there was disappointment when the county was not granted urban renewal status.
The points made by Senator Roche regarding particular sites and areas can be raised in the course of the evaluation and preparatory work which will now be undertaken. It is reasonable to assume that the pre-planning process involved in acquiring a site, getting planning permission, etc. can take between four and six months and we are only talking about the existing regime being extended for another year.
Regarding the issue of cost raised by Senator Burke, 15 per cent must be incurred by July. This includes professional fees and site acquisition. Developers are aware of this since January and I am aware of a case where an application has only been lodged in the last number of weeks. This is not necessarily the same case to which the Senator has alluded. The application has been lodged on foot of an option to purchase the site rather than a specific commitment. If the option is converted into a purchase and if the purchase in on the margins of 15 per cent, it will be deemed to qualify. However, changing the legislation because someone has entered the process at a late stage is not acceptable and I am not prepared to do it. We have debated this issue on Committee Stage in the other House. People have been given sufficient notice, namely, six months in which to incur the 15 per cent cost — a reasonable amount — and that period has not yet elapsed.
Regarding the tour of Clare raised by Senator Taylor-Quinn——
The Minister is welcome to partake in it any time.
There are a number of existing designated areas in Clare. I know the Senator was speaking in the context of urban renewal for Shannon but there has been similar designation for other parts of Clare. While this section does not deal with it, there is also a pilot seaside resort scheme. I received requests for 69 additional seaside resorts to be added to the existing 15. In some cases designation has not resulted in significant activity. The concept of the scheme was to give an extended economic life to traditional seaside resorts whose primary market had been overtaken by package holidays to Spain, etc. We must allow the pilot scheme run its course before evaluating it.
A further 12 months is provided for existing designated areas to complete work already in progress or embark upon new work between now and 1 July. Senators who are members of local authorities or actively involved in their local authority area can ensure that local authorities prepare proper submissions which focus on the way in which these provisions can be taken advantage of.
The thrust of the consultant's report was that, rather than large swathes of area being designated, the focus should be on specific sites. My preference is to enhance the value of publicly owned land. Joint ventures can be undertaken between the statutory body, be it a local authority or State company, and private enterprise to ensure integrated development. A successful example of this can be seen in Clonmel where the local authority accommodation was upgraded and refurbished in the course of an urban renewal project.
The points raised regarding regional development in Arklow or Wicklow are, not relevant to this debate. However, I have listened to what has been said.
I have tabled an amendment on the issue of seaside resorts which will be discussed later.
Because of the prudent way the Minister has managed the economy over the last two and a half years and in three budgets it is unbelievably hard to get tradesmen, draughtsmen and workers to carry out work on projects. Perhaps An Bord Pleanála will give priority to cases in urban renewal areas over the coming weeks.
Shannon is a unique case, Urban renewal may not be the specific answer, but some form of tax incentive is essential. Will the Minister seriously consider Shannon town for some type of tax incentive in deliberations for the budget in October?
The process initiated involves local authorities — Shannon has a town commission which can argue its case — submitting schemes to the county authority which in turn can submit a proposal for urban designation or renewal or tax incentive status to the Department of the Environment. The Department of Finance becomes involved when the Department of the Environment has made its evaluation of the various projects and proposals received from local authorities. We approach it on the basis that there is a certain amount of capacity in our revenue expectations that enables us to forego a certain sum of money which is deemed to represent in terms of construction or tax foregone a square metre of development. If a total area is proposed for designation, an assessment is made of its capacity, a price is put on it and the area is then pared back to the price and capability in notional budget terms of how much we propose to designate in terms of tax foregone.
It is up to Shannon to convince Clare County Council and for the council to make a convincing case to the Department of the Environment. It would not be possible to do this in the context of the October budget and it would be misleading to say otherwise. Provision could be made in the budget to have a successor to the existing urban renewal scheme when it expires in July 1998 and we will have to examine how this can be done in consultation with the Department of the Environment. In order to allow people plan for that, the sooner local authorities submit their own proposals the better. The Government, through the Department of the Environment, will shortly be issuing guidelines for the preparation of new proposals.
Senator Burke's request regarding An Bord Pleanála is reasonable and I will bring it to the attention of the board through the Minister for the Environment. We do not wish to influence the decisions of the board but to give priority to those schemes whose status could otherwise be in jeopardy. It is difficult to get building contractors or service professionals in some areas, but this begs the question whether we need tax designation in those instances.
I understand the Minister wishes to indicate a versional change.
I wish to draw attention to versional corrections to section 30 which I am seeking to be made by the Clerk under the direction of the Chair. The corrections required to rectify a number of incorrect internal cross references in section 30 are as follows: in page 43, line 42, to delete paragraph (b) and substitute paragraph (a); in page 53, line 42 to 43, to delete paragraph (c) and substitute paragraph (b); in page 54, line 1, to delete paragraph (c) and substitute paragraph (b); in page 54, line 7, to delete paragraph (b) and substitute paragraph (c); in page 54, line 10, to delete paragraph (b) and substitute paragraph (c) and in page 54, line 13, to delete paragraph (b) and substitute paragraph (c).
I thank the Minister and I will direct the Clerk to make those changes.
Yesterday, in the absence of the Minister, I made the point that I welcome these changes. We lost track somewhat with the changes that were made in the previous Finance Act concerning section 38 funds for the film industry. I always have doubts about the idea of a cap, even though it goes up to a rather generous £15 million. Hopefully, that will operate.
We have the only working film studio in the country in Bray. I was saddened some time ago that the studio was forced to sell its back lot because it was in difficult times. It was an imprudent move in my view. The land was rezoned and is now housing authority land.
While there are many interesting artefacts in the studios, many more of them, along with the property room, had to be sold off because of cash constraints. That was a bad mistake. I wonder if some way could be found through the tax system to encourage film studios to hold onto film artefacts? In addition to the film itself, sets, props, property and other studio items form an interesting part of the national film heritage. The only way such a facility film studio can retain any of these things is if there is some incentive or inducement to do so. I accept it is not an issue the Minister can resolve today, but it may be something that the Minister, coming from an architectural background, will recognise has value.
It is a pity that they sold off land and the entire property shop a few years ago. It was a great tragedy because there were some interesting artefacts there that are now decorating pubs. In one famous case, a torture cage is decorating somebody's front sitting room, which just goes to show that it takes all kinds. The artefacts were associated with some of the bigger film productions that have been made here over the years, going back to the time the studios opened. Perhaps at some stage in the future the Minister and his Department could consider ways of protecting film artefacts by way of some form of tax inducement.
I welcome the changes that have been made in this section, which help to put us back on track.
I compliment the Minister for Finance, and the Minister for Arts, Culture and the Gaeltacht, Deputy Higgins, for the development of the film industry. Is it necessary to propose capping for investment in films? After all, films bring a great amount of employment to peripheral rural areas, which are good settings for films. Films such as "Broken Harvest", "Buttons" and "Michael Collins" were made in West Cork. Another film was made in Crookhaven some years ago. Such film projects bring tremendous employment and revenue through accommodation and other means to an area where there are few alternatives for employment. Is such capping necessary? Because they require a large financial investment, capping may be a hindrance to big budget films.
I listened to what Senator Roche said with respect to Ardmore Studios. The studios will benefit from the tax provisions in this section because post-production work will now attract a tax incentive and that will reinforce the economic base of Ardmore. It they wish to look at the possibility of some kind of film archive for sets, that would be a matter they could, in theory, discuss with the Minister for Arts, Culture and the Gaeltacht.
With regard to the cap, which Senator Calnan mentioned, we have doubled the amount of money — it has gone from £7 million to £15 million, which is a substantial amount. In effect, we are foregoing this taxpayers' money in order to stimulate activity.
It is quite obvious that Deputy Higgins has simply been the best Minister for Arts, Culture and the Gaeltacht the country has ever had. He has transformed the film industry, much to the chagrin and annoyance of people who, like Deputy O'Malley, thought he would go mad in Government. As colleagues at our party conference said on another occasion, if this is madness let us have more of it.
Deputy Higgins has not only transformed the whole perception of culture away from the hallowed elitist stance in which it was viewed by many people to a much more accessible one. In the course of that, as the Senator rightly said, he has introduced an element of economic activity and employment to parts of the country that would not otherwise have benefited from it.
The cap, at £15 million, is a generous amount of money, and I do not propose to increase it.
Recommendations Nos. 2 and 5 are related and may be discussed together.
I move recommendation No. 2:
In page 72, before section 52, but in Chapter II, to insert the following new section:
"52.—(1) With effect from 5th April, 1997, any person or company making a qualifying donation to a specified charity shall be entitled to a reduction in income tax or corporation tax payable in respect of any year thereafter equivalent to the amount of income lax or corporation tax otherwise payable by such person in respect of the amount of the qualifying donation.
(2) In this section, `qualifying donation' means any sum which is——
(i) not less than £250 net,
(ii) bona fide paid without any collateral agreement or arrangement of benefit, direct or indirect to the taxpayer,
(iii) satisfactorily disclosed in writing to the satisfaction of the Revenue Commissioners.
(3) In this section `specified charity' means a charitable body or association nominated by the Minister for Finance which complies with such conditions in relation to its charitable activities and in relation to its works as may be specified by the Minister from time to time.
(4) The reduction awardable under this section shall not, as regards an individual exceed £5,000, or as regards a company, exceed £50,000 in respect of any given tax year.
(5) The provisions of this section are without prejudice to other legal provisions relating to tax reductions in respect of charitable donations by individuals or companies.".
The Minister will be aware of the submission that has been made by the Irish Charities Tax Reform Group. In effect what we want the Minister to do — it is perhaps more clearly expressed in recommendation No. 5 — is to give domestic charities the same status which was given some time ago to charities dealing with non-domestic cases.
The Irish Charities Tax Reform Group has put forward a cogent argument in favour of the proposition that is made in a diverse way in both recommendations Nos. 2 and 5. It is basically arguing that the cost is not extensive. In the face of the huge amount of competition for funds that charities need, it argues for the kind of support we are recommending.
The Minister is not a hard-hearted man. He is aware of the difficulties that charities find themselves in. They are being squeezed on so many different sides. We depend on volunteerism to a degree which is quite unprecedented. It is one of the great positive aspects of Irish life, but from time to time it needs to be underpinned. Things have changed in recent years. For example, the lottery has had a profound impact on charities. The tax concessions being promoted by the Irish Charities Tax Reform Group are reforms which should be accepted by the Minister. In particular, it argues that the cost is not extensive. It believes the cost would be of the order of £2 million to £3 million per year, but the benefits would extend far beyond that.
In many cases where charities are starved of funds, if they do not receive the money in the manner outlined in recommendations Nos. 2 and 5, undoubtedly they will have to come back to the State looking for those funds. The Irish Charities Tax Reform Group has carried out extensive research on the issue and its figures stand up to scrutiny. One of the problems is that the Finance Bill was well cast before this set of proposals was made. I know, however, that there have been lengthy discussions between advisers, programme managers and the Irish Charities Tax Reform Group. I hope the Minister can respond positively to these propositions.
There has been extensive discussion on this matter. I initiated it all when I introduced my first budget, which included the tax deduction facility against personal income tax for donations to Third World charities. When I was told by Department of Finance officials that if I opened the door to the Third World charities I would inevitably generate this kind of demand, I said I would resist it. I am not disposed to accept this proposal for a number of reasons.
First, from the point of view of regulation, control and guarding against abuse, there is no proper system to register and regulate charities at present and anybody who is familiar with the area would realise this. There is not even an accurate register of those charities which are still active. We know what constitutes a registered charity but we have limited information beyond that. In order to open charities to this kind of flow of income, which every registered charity would be eligible to claim, there would need to be some system of supervision and regulation, which does not exist at present.
Under the present regime there would be nothing to prevent directors availing of a loophole in the Finance Bill such as that which the directors of a particular company used to establish a scholarship from the company's proceeds, the beneficiaries of which — it will come as no surprise — were the children of the directors. This occurred after we had eliminated tax relief on covenants, to which a rapidly increasing number of people had availed in a short period. I am not suggesting that the group of charities which put forward this case had this in mind because it is, as the Senator would readily agree, a highly reputable group. However, the process of regulation and control is important because we would not be introducing this tax measure just for this particular group of charities, which do excellent work.
Second, this recommendation is not confined to individual incomes as it seeks to allow relief for corporate donations. The sums involved could be quite substantial and there would be potential for a massive unquantifiable loss of revenue.
I would also point out that most domestic charities are in receipt of substantial taxpayers' money through State grants of one kind or another if they operate in the health or caring sectors. Obviously, different charities receive different sums of money depending on the way in which they complement Government policy in the area of social services; but, by and large, they receive substantial sums of money.
I accept that some charities, whose income depended on lottery-type revenue, have been squeezed, to use Senator Roche's phrase, and are experiencing difficulties. I am in the process of looking at the possibility of introducing a charities' fund using some of the proceeds from the lottery reserve fund to facilitate some of the larger charities which have encountered considerable losses or a downturn in revenue. I would prefer to deal with this issue in that particular way rather than accept a recommendation along these lines. It simply is not possible to accept this recommendation because of the open-ended nature of the present status in law of these charities and of their regulation.
I appreciate the Minister's difficulties because, as he said, the law has been lax in this regard — we lack a register of charities. All the charities which would benefit from this recommendation are well known, active charities which are limited companies. As a result, they must comply with the requirements of auditors and the Companies' Office. The fact that we have not established a register of charities would not necessarily mean that the recommendation would open the floodgates to every group of chancers which might form and call itself a charity.
Second, the charities section of the Revenue Commissioners carries out audits on organisations, so the bona fides of any organisation benefiting from this recommendation would come under the scrutiny of that section, which is located at Nenagh, County Tipperary.
Third, an initiative in relation to registered charities is currently on the desk of Minister of State, Ms Burton, who has indicated an intention to introduce legislation on fund-raising arising from the recommendations of an advisory group.
The Minister made the point that many of the voluntary organisations receive substantial funding from the State. They actually take the place of the State in providing many services, particularly in the health and welfare fields, to which the Minister referred. The problem is that the charities, and not just those who had received money from lotteries or fund-raising activities which have been shut down or curtailed by the national lottery, feel they are being squeezed. Mr. Brian Harvey's report suggested that lottery support for charities amounts to between only 7 and 11 per cent of the funds raised. Departments and Government agencies spend 63 per cent of the national lottery funds. In fact, the national lottery is displacing money which would otherwise have gone to charities. This is not a recent phenomena. It is something about which we all complain when we move from Government to Opposition, but it is a valid argument.
The submissions which have been made to the Department deserved a more positive response. I regret that these recommendations are not being accepted by the Minister.
I understand the Minister's predicament. He is willing to look into the matter in the context of the national lottery reserve fund and that should be adequate.
Recommendations Nos. 3 and 4 are related and may be discussed together by agreement. Is that agreed? Agreed.
I move recommendation No. 3:
In page 72, before section 52, but in Chapter II, to insert the following new section:
"52.—The Third Schedule to the Finance Act, 1995, is hereby amended by the addition of the following to the list of qualifying resort areas:
`Bray Seafront between the seashore and the railway line.'.".
Recommendations Nos. 3 and 4 concern the seaside resorts scheme. The Minister will forgive me if, in the current climate, I am parochial in this matter. It is not a parochialism which has arisen recently. When the seaside resorts scheme was first introduced, I was one of those here who welcomed it, as the Minister will be aware. I thought it was adventurous, but I was incredulous that both Bray and Arklow, County Wicklow, were excluded from the scheme. I acknowledge that the Minister generously accepted the case for Arklow and included that town in the renewed and extended scheme.
The arguments which the Minister put forward last year when I made this recommendation with regard to Bray held a great deal of validity. The Minister's argument at that time was that to bring a large town the size of Bray into the seaside resort scheme would not have been a practical proposition, and I accepted it. I re-examined the issue and had my colleagues in the other House table a modest proposition in amendments on Committee and Report Stages this year, that is, that Bray seafront between the seashore and the railway line should be included in the scheme.
I would ask the Minister to give very careful consideration to this recommendation. He will be aware that the seafront in Bray was once a glorious place. It has some fine architectural features. It has now fallen into disrepair and the sea front is seriously in need of an injection of life. My proposition intends to induce a number of specific investments.
I received a letter by hand this morning from the Bray Chamber of Commerce. I am glad it has shown an interest in the issue because there was not a great deal of effective lobbying in the past. The letter states that no hospital, third level institution, Army barracks, Civil Service office, prison or State-sponsored bodies are located at Bray. In fact, the only office of a State-sponsored body situated at Bray was part of Coillte but it has since been relocated. Effectively, there is no Government sponsored establishment in Bray. The first urban renewal scheme granted to Bray, which missed out on the local employment schemes, proved beneficial but the second urban renewal scheme has not been successful. The Government has not decentralised part of any Department to Bray. With its many advantages, Bray has not managed to attract the right kind of investment.
The recommendation fulfils all of the requirements which might be set down by the Minister and his Department. The Minister outlined that in the next phase of urban designation he would like specific targets to be set and intimated that land should not be rezoned in the mere hope that investors might be attracted. When I pressed the issue of the seaside resorts scheme last year, a particular business group had accumulated £2.5 million for an investment at the southern end of the seafront in Bray. Unfortunately, that money has been invested in another project. There is a proposal to demolish one of the less salubrious buildings on the northern end of the esplanade in Bray and build a hotel in its place. However, this depends on the provision of some sort of inducement.
I intend to press the recommendation to the full because a bad mistake was made in respect of Bray in last year's extension of the seaside resort scheme. Bray should have been included. I believe that if our Dáil representatives had lobbied the Minister more vociferously he would have acceded to including the entire east ward of Bray between the main street and the seafront in the seaside resort scheme. There can be no cogent argument against extending that scheme to an area of approximately 200 acres which was built in Victorian times and which has now fallen from its former splendour.
There is an urgent need for the tax-induced investment I propose. I ask the Minister to give me the benefit of the doubt and allow this project to proceed. Bray has already lost £2.5 million worth of investment. People are interested in investing in Bray but they will go elsewhere if action is not taken. The Minister may make the point that the seaside resort scheme was extended last year but he is aware that while it has been successful in certain areas the take-up in other regions has been disappointing. I assure him that there will be an immediate take-up in Bray if he accepts the recommendation. I strongly urge him to do so.
I do not know why there should be discrimination against Bray. It appears that during the past number of weeks there are few towns or areas which did not get what they wanted from the Government in the run up to the election. We have witnessed the extraordinary ease with which regional airports were given special designation and seen the Government's willingness to confer such designation on areas where Members seats are in danger. If the recommendation is not accepted, it will be the first time that any proposal has been refused by the Government during the past few months.
The Minister recently visited Bray and he is aware that it is neglected. Whereas the proposal to include Bray on the list of qualifying resort areas may or may not have merit when compared with the claims of other seaside towns, it has merit in respect of the criteria used to give designation to special interest groups in recent months. If the recommendation is not accepted, there must be political reasons for not giving Bray the sort of preference given to other areas. Bray does not have a Minister.
It has a very active Senator.
It has two very active Senators. I take my hat off to Senator Roche who is a more active local representative than me. However, I represent Bray on Wicklow County Council. I believe that, whatever the merits of this case and those of giving money to renewal schemes in various areas at this time, Bray has as much right to receive special designation as Knock Airport.
The Minister will be aware that an injection of this sort would be particularly beneficial to Bray which is a poor, neglected town and an area of high unemployment. For reasons which I do not understand, Bray did not benefit when one of the Minister's colleagues in Government recently awarded swimming pools to any town in County Wicklow with political clout. On this occasion the case for not conferring seaside resort status on Bray is unanswerable because of the benefits it would bring to the people of the town. It is certainly unanswerable in the present political climate when everyone else has been pushing at an open door. Special status has been granted to sensitive areas, which will benefit enormously in the next number of weeks, where the Government hopes to win seats and votes in the general election. A decision against Bray would discriminate against the town in a way it does not deserve.
The case for Bray has been well documented. I appreciate the Minister's predicament because if, as the previous speaker stated, he opens the door and extends the seaside resort scheme to other areas, there are many towns on the western seaboard such as Belmullet, Geesala, Newport, etc.
Some of those towns are already included under the scheme.
Senator Burke forgot to mention Claremorris and Ballyhaunis.
I appreciate the points made in respect of Bray. I appeal to the Minister that if further urban renewal or seaside resort schemes are granted, consideration should be given to small, family run businesses in preference to larger concerns. There has been a recent trend whereby large hotels and retail businesses have taken over seaside resorts and urban renewal areas to the detriment of small family run businesses. I refer to businesses operated by husbands, wives and their families which employ one to two additional staff. These should receive concessions over and above those given to larger business concerns.
I welcome the incentive schemes for resorts, one of which has been quite successful in Ballybunion. However, some people use these schemes for the purpose of obtaining tax writeoffs. I agree with Senator Burke that the concessions granted to traditional family businesses should be enhanced.
Senator Roche and I tabled a recommendation in respect of the Inishowen peninsula and I ask the Minister to investigate the case of this deserving cause. Serious consideration should be given to the entire programme, particularly in connection with traditional resorts such as Ballyheigue in County Kerry. Package holidays have interfered with these resorts over the years and they need an injection to regenerate them. More facilities must be provided and I ask that the Inishowen Peninsula be included.
Will this initiative be reviewed? Bundoran, which is on the border with County Leitrim, has been designated for special tax status. The nearest village, which is less than two miles away, is Kinlough in County Leitrim. It has suffered a severe drop in population, primarily because of a lack of economic activity. This initiative will hopefully generate more economic activity in Bundoran; but, unfortunately, a byproduct of it will be that it will take even more away from the economic regeneration of that area of north Leitrim. Having identified the qualifying areas, will the Minister examine this anomaly in the initiative? One community will benefit while another one nearby will be adversely affected by it. The situation is exacerbated by the fact that the area is covered by two local authorities. Leitrim is a maritime county and has the shortest stretch of shoreline in Ireland. There are approximately two miles of it at Tullaghan. Will the scenario I have outlined be addressed?
There is approximately 120 miles of coastline in west Cork. It has many resorts but I will not pick out of any of them.
Clonakilty has been selected as a qualifying resort area and it has been of great benefit to the area. I understand the Minister's position and appreciate the pilot schemes have to run their course before any extensions or otherwise can be considered. However, I hope other areas along the west Cork coast will receive similar treatment to Clonakilty.
The scheme originated when Deputy McCreevy was Minister for Tourism and Trade and Mr. Padraig Ó hUiginn was chairman of Bord Fáilte. A number of traditional seaside resorts depended on seasonal trade, which effectively lasted no more than about ten weeks. They had a capital infrastructure of existing buildings, albeit run down and depleted, and Bord Fáilte suggested they needed a boost to enhance them because of the changing pattern in holiday making with the emergence of package holidays to sun resorts.
The scheme began with seven resorts, primarily on the west coast, in areas that were indisputably associated with the criteria I outlined. It was like the film, "The Magnificent Seven". When details of the scheme were published numerous proposals were received and we achieved equity or compromise by increasing the number of resorts from seven to 15. As I said when I replied to the earlier debate on the urban renewal section, I received representations from 69 other groups which wished to be included in the scheme. This would simply be the equivalent of watering the jam and destroying the slice of bread because there is a fixed amount of available investment capital and to scatter it in that way would be counter productive. It is a pilot scheme and I do not propose to extend it to include any other location.
I now turn to the seafront in Bray. There is a good argument for co-ordinated renewal of the town because, contrary to appearances, there is considerable poverty and unemployment in Bray, notwithstanding the fact that it is serviced by the DART and has seen a massive increase in population. One would presume that would have brought about a substantial increase in domestic demand in the hinterland of the town; but because it is part of the greater Dublin system, a great deal of the money that comes into Bray is not necessarily spent there. How do we respond? Given the location of the seafront and the amount of capital allowances that exist, for example, in the hotel industry — a large number of hotels are currently being planned or are under construction in the Dublin region — and given the shift in tourist numbers and the fact that Dublin has now got an extensive tourist season, there is no reason why market forces alone would not drive redevelopment into the Bray area. It may well be the case that site assembly is a difficulty in the seafront and there is not enough land to generate such development.
A better approach to using State instruments to achieve the co-ordinated development which the town undoubtedly needs is for the local authority to form a joint venture with a group of investors. The site should be assembled in a manner that would enable a viable economic development to go ahead and enable the local authority as part and parcel of a renewal of the area to make a cogent case for it to be given urban renewal status when the existing scheme expires in July 1998.
Bray is not a seaside resort. It may have been traditionally, but so was Strand Road in Sandymount. When upper middle class people lived in Mountjoy Square and Henrietta Street, the villas along Strand Road, in one of which I live, were their summer homes. People moved for the summer in the same way people move to parts of the Wicklow coast, including Brittas Bay, today. Bray is effectively a suburb of the greater Dublin system, albeit a town with its own local authority, and, therefore, cannot be confused with Ballybunion or Tramore. They are in a different category. I do not doubt that Bray needs some degree of urban renewal and this is why it received urban renewal status. There are areas designated for urban renewal in the town.
The Minister of State at the Department of the Environment comes from Bray and the guidelines that will be published soon will no doubt give direction to the local authority and other interest groups to do what Senators Roche and Ross have advocated. While it would achieve a result by stimulating investment if it were included in the seaside resort scheme, it would be nonsense in the context of the resort proposals. I suspect site assembly is a problem; but, if it is not, the local authority and other groups involved should prepare an integrated plan for submission to the Department of the Environment with a view to having it designated under the urban renewal scheme.
Senators Mooney and Kiely referred to other areas. The argument for Bundoran originated from the genesis of the proposition put forward by Deputy McCreevy and Mr. Ó hUiginn. Mr. Ó hUiginn introduced tax driven development in 1982. In the first Haughey Administration what became known as section 23 housing development was actively proposed by him against all the conventional wisdom that resided at that time in Upper Merrion Street.
The situation in Bundoran should not be confused with the problem of village renewal or the problem faced countrywide as a result of the rebalancing of the population between urban and rural. When we joined the European Union on I January 1973, 27 per cent of our workforce was engaged in primary agriculture. That figure is now 12 per cent and will fall further. This has implications for the provision of services for rural Ireland and the fabric of small towns.
In his book The Irish Town, published in the late 1960s, Patrick Shaffrey pointed out that many buildings would be in serious physical disrepair within 15 to 20 years unless some policy initiative was introduced. An integrated rural plan for the whole of Ireland is probably required. That will involve difficult choices. The rebalancing of our population will result in the growth of some areas and the decline of others.
I referred to the manner in which Leitrim County Council avoided making choices when it submitted the whole county for urban renewal status thereby——
That is not true. It specifically requested——
The Minister without interruption.
On a point of order, the Minister has made an incorrect statement.
The Senator may speak after the Minister has finished. The Senator should not interrupt again.
This is a point of order.
Resume your seat, Senator, and do not interrupt again. You are entitled to reply when the Minister has finished. You should obey the Chair.
May I ask the Chair a question?
Resume your seat. I have made an order. The Minister is speaking and you may not speak. Resume your seat.
May I ask a question?
I am asking you for the last time to resume your seat. You may reply when the Minister has finished but do not interrupt.
I will abide by the Chair's ruling but I would welcome an opportunity for Senator Mooney to correct the record. I met with a group in Carrick-on-Shannon on this issue. I was informed by the Department of the Environment that the entire county had been submitted for urban renewal status. If that is inaccurate I would be happy to withdraw the remark and correct the record.
May I ask the Chair a question?
You should direct your question to the Minister. We do not want any of this and you are wasting time.
I am making a point of order.
What is the point of order?
Am I entitled to raise a point of order?
You are entitled to raise it but you are not entitled to interrupt. You are entitled to ask the Minister to clarify a position.
I was trying to make a point of order.
What is the point of order?
It is now irrelevant. Am I entitled to raise a point of order?
You are being foolish. Do not try to make this House look foolish. Ask a question if you wish.
If you wish to make a fool of yourself that is up to you.
You should show some respect for the Chair.
I have the greatest respect for the Chair.
You said I was making a fool of myself. I would not take that from anyone and I am asking you to withdraw the remark or I will adjourn the House.
I said that if——
I am asking you to withdraw it or I will adjourn the House.
Withdraw which remark?
You said that I was making a fool of myself.
The Senator never said that. The Chair would want to cool down.
Do not be facetious. Let Senator Mooney speak for himself.
The Chair must also obey rules.
The Chair conducts business and I will do so with propriety. Does Senator Mooney wish to ask a question? This behaviour has crept in over the last day or two but it will not be tolerated while I am in the Chair.
It is spilling over.
I am sorry for delaying the House. My concern centred on the statement made by the Minister. For many years Leitrim County Council has been seeking tax designated status for counties such as Leitrim which would encourage inward investment when competing with larger entities.
The council and authorities within the county, including the Carrick-on-Shannon Chamber of Commerce, have been calling unsuccessfully since 1987 for Carrick-on-Shannon to be designated for urban renewal status. Successive Ministers for the Environment have failed to respond to what is a genuine and meritorious application. Carrick-on-Shannon is the only county town which does not have such status. It suffers from its small population.
The symbolic consequences of this failure have created an impression that Governments in Dublin do not give a damn about County Leitrim. The Minister's recent visit to the chamber of commerce fuelled the view that if a submission was endorsed by Leitrim County Council he would give it serious attention. The interpretation of the Minister's visit and his remarks was that all that had to be done was for Leitrim County Council to pass a resolution and that he would include Carrick-on-Shannon in the Finance Bill.
Whoever made that interpretation was disingenuous, but the Minister left people in Carrick-on-Shannon with that impression. It raised my ire when he said that Leitrim County Council, because it was seeking tax status for the entire county, was inimical to the ongoing discussions for Carrick-on-Shannon to be granted urban renewal status. I am grateful for your silence, Acting Chairman.
The Senator should conduct himself and resume his seat.
I wish to clarify the position, as I understand it, with regard to urban renewal status for Leitrim and Carrick-on-Shannon. Leitrim County Council has been seeking special tax incentives for the whole county for many years. Following discussions with various Ministers, including Deputy Quinn, over recent months a resolution was forwarded by Leitrim County Council seeking urban renewal status for Carrick-on-Shannon. The council was of the impression that this was being seriously considered. There is disappointment that this status was not granted in the Finance Bill.
The view was always held that Carrick-on-Shannon was the only county town without such status. However, Monaghan town is in the same situation, so we are not as unique as we believed. The granting of this status is a symbolic gesture and there are a number of projects which would be assisted if Carrick-on-Shannon was given urban renewal status. If the Minister is still Minister for Finance for the next budget I hope he will give serious and favourable consideration to this request.
The Deputy will still be Minister.
Tax designation has to be targeted if it is to be effective. The least of County Leitrim's problems is its ability to articulate its views despite having a population of only 28,000 or 29,000 people. The effectiveness of tax designation depends on it being focused and confined to particular areas. The approaches made proposed to treat the whole county on the same basis. That is inimical to the basis on which tax designation operates.
The existing regime will expire in just over 12 months time; we are extending it for another year from July 1997. As has been mentioned, the gestation period of pre-planning is between three and nine months, depending on the complexities of sites and other issues. A year of designation, while welcome, would not be what is normally required — it would be three to five years.
The Government took a decision, notwithstanding that well-structured representations were received from Leitrim on behalf of Carrick-on-Shannon, that it would not add to the existing urban renewal cluster of designated towns. However, Leitrim's application could, and probably will be, sympathetically considered by the Minister for the Environment. That Department makes the site selection and my Department merely gives assent to that. My remarks on tax-specific designation apply equally to the suggestion that the entire Inishowen peninsula should be so designated for the same reasons.
I regret therefore that I cannot accept the recommendation. However, with regard to Carrick-on-Shannon and Leitrim, I encourage them to make a submission on the basis that a general application had been made. I would be reasonably optimistic that the Department of the Environment would be well disposed to including it on a list, but that is a decision for that Department.
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