This section provides for preference for the levy in the event of winding up. I am not sure that it is correct to do this. When a business winds up the unsecured creditors are left high and dry whereas the banks who have security and the Revenue who have the benefit of this section 11, exact the full pound of flesh. Some workers can recover, through the insolvency fund, but many of the small business suppliers in the event of wind up, are left without. It is argued, quite cogently, that the Revenue Commissioners have the maximum knowledge — they know the way a business is developing — and they should be in a position to bring a company to pay its due before it gets into a liquidation situation. The Revenue preference has meant that the Revenue are very lackadaisical about actually pursuing money against companies in arrears because they know that their interests are protected whereas the supplier is left high and dry. Will the Minister explain why we should give preference to Revenue? The natural consequence is that small suppliers who are caught lose out.
SECTION 11.
This section is designed to protect any outstanding levy owed by employers who find themselves becoming bankrupt or in the process of winding up. It is a standard approach whereby unpaid levies, taxes and PRSI are accorded the Revenue preferential debtor status, thereby attempting to protect the State against financial loss. As the apprenticeship levy will be collected through the PRSI system this provision regarding unpaid levies simply treats the levy the same as any other levies collected through the PRSI system. In the drafting of the section cognisance has been taken of companies who are winding up for the purposes of mergers or amalgamations. The common practice is that the State have first call.
It may be common practice but it has been questioned on numerous occasions and indeed, the Taxation Commission opposed it. It is common practice that we roll this in year in year out without ever subjecting it to debate. There are cogent arguments to say that the onus is on Revenue to be an effective collector of its debts the same as any other supplier and that Revenue should not have favourable treatment. We should not go along with it just on the basis of precedent, we should debate it more carefully.
Clearly it is a matter which should be put to the MInister for Finance. Quite obviously no Minister, senior or junior, in any other Department would have the right to address a Revenue issue. Therefore, even with the best will in the world neither I, nor my Department, would have authority to proceed with that matter. It is a matter of general revenue collection. It is a matter of the State having first call. Perhaps that matter could be appropriately drafted for the Finance Bill if the Deputy so wished.
I propose the following draft report: The Select Committee has considered the Industrial Training (Apprenticeship Levy) Bill, 1993 and made amendments thereto. The Bill, as amended, is reported to the Dáil.
Is that agreed?
Report agreed to.
Ordered to report to the Dáil accordingly.
The Select Committee adjourned at 4.50 p.m.