The term "approved college" is the kind of thing Deputy McCreevy was talking about earlier. We are laying down something which I do not like. This is that an approved college is a college in the State which operates in accordance with a code of standards which from time to time may, with the consent of the Minister for Finance, be laid down by the Minister for Education. Will we have some social engineer telling us colleges must provide equality studies? What does "a code of standards" mean and how narrow or broad is that category? Must a college offer courses of which the Minister approves? Can it be a college of ancient history? I am deeply sceptical about giving a Minister for Education the right, on a totally discretionary basis, to lay down what is termed a code of standards but could mean virtually anything. I would like the Minister to indicate what is envisaged by this provision.
SECTION 6.
As the Deputy would be aware, it is the Minister for Education and not the Minister for Finance who would be responsible for this. We should be very clear that the Department of Finance is not going to take on itself an expertise in education.
I am all the more scared to hear that.
The Department of Education is highly expert in this area. It has been regulating education standards in colleges, which are in direct receipt of 100 per cent funding, with some degree of success for successive years under different Administrations and Ministers. The code of standards for an approved college would be analogous and comparable to standards prevailing in State-funded public colleges at third level.
The term "code of standards" also applies to the term "approved course". I would have great difficulty with allowing the Minister for Education to turn this on and off with what is termed a "code of standards" which was never laid before the Oireachtas for a vote. We never see it and we do not know whether she is right or wrong in specifying certain matters. Surely the Minister for Education should be required to make a regulation stating the code of standards so that we, who are conferring this power, have a nominal role at least in scrutinising and agreeing with the code of standards that is applied.
My point on this section follows on from that made by the previous speaker. My deep concern is about the vested interests that work, legitimately in a sense, within the education sector to protect the courses they control. Specifically, they do not want competition in the market place — in other words, other colleges — to be able to avail of similar courses.
I can foresee a situation in which a college which would like to be approved and to offer fees and breaks in that regard will be prevented from being involved in the courses that would qualify them and attract students to their college. I had a salutary experience in the south east in this whole argument about lack of facilities which I will not go into now. However, I am familiar with the vested arguments from within the university sector, the regional technical colleges and the Institutes of Technology that arise in that context. If the decision to approve these colleges is solely in the power of the Minister, I would be concerned that even if she or he wanted to approve them it would be difficult to do so because of the interests that would mount against new courses being approved in colleges thereby allowing them to benefit under this section. I question if the real benefits of this section could be made available throughout the State.
Does the National Council of Education Awards have a role in this or should it have a role in this?
I must confess to a lack of knowledge in this regard. What type of college is involved? The Open University is expanding its activities here although it is a British institution and, indeed, a fine institution. Will an institution such as the Open University be a beneficiary?
The last question is probably the easiest to answer. The answer is no. These provisions apply to colleges within this State, notwithstanding the manifest merits of a former Labour Government's implementation of the Open University in Britain.
Let us remember that the Tories kept it in existence.
Only because they could not close down the entire country.
The Minister is giving Mr. Blair great support.
International solidarity. First, the Minister for Education will exercise this provision with the consent of the Minister for Finance. It will not be arbitrarily exercised by one Department. Second, for many years there has been the scandal of an absence of a proper educational legislative framework and much of our education policy, as the Deputies on all sides are aware, has not been subject to legislative scrutiny in the fullest sense. I expect that some of the provisions underpinning this matter will be addressed when the Minister for Education brings forward the education Bill to give effect to the White Paper.
With regard to Deputy McDowell's concerns, we are attempting to provide equality for those who have not been able to get into a fee paying college, where fees are now being abolished in the State sector, and where the courses are comparable or of a similar quality and value; in other words, third level degree or diploma courses of two years or more duration which are not fly-by-night operations.
The Chairman asked about the role of the NCEA. It will not have a direct role. However, it will have an indirect role in the sense that if courses are approved by the NCEA they will manifestly come within the broad remit of an approved course.
Fees have been abolished for those students lucky enough to get third level places through the points system. However, there were also parents who, by placing considerable hardship and pressure on themselves, were paying the fees to put their children into private colleges and this was an attempt to recognise, in fairness and equity, that they should get some measure of relief. It will not apply to fly-by-night colleges — and one or two colleges who were not fly-by-night got into difficulties — but to bona fide, quality colleges and, manifestly, the Department of Education must have some quality control role in regard to this.
I support the section in so far as it is designed to provide relief for people who cannot get on to courses through the points system. However, as I pointed out in our briefing this morning, there are at least three sections of the Bill subject to ministerial approval. This has become a feature of Finance Acts only in the past couple of years. I generally prefer Ministers to be able to make decisions and to be accountable because they can be asked to account for their actions and be criticised in the Dáil, rather than transferring such decisions to other institutions and bodies which do not present the same opportunity.
Up until a few years ago, the Revenue Commissioners decided issues relating to Finance Acts. When subjects became thorny, be it in planning or any other area, I have seen successive Governments over a long number of years pass the issue to a so called independent body advising that they did not wish to deal with it any further. The real reason as to why Governments and Ministers take this course of action is because the issue becomes too difficult politically and it is better to have it transferred to such a body rather than have in on their desks where they or future Ministers would have to deal with it. Notwithstanding this, it is not a good principle in finance and tax legislation to have powers given to a Minister of the day.
Under this section, the Minister for Education must consult with the Minister for Finance, but the terms of the section grant extraordinary powers to the Department of Education. The relief will only be granted to third level colleges; it will not be granted to post leaving certificates courses, or in respect of those repeating the leaving certificate and so on. However, many of the second level and third level private colleges in Dublin would not be in existence today if the Department of Education could have put its clampers on them from the outset. Indeed, the Department would not have allowed them, and over the past 25 years it has had various acolytes in the media who were against them also. Nevertheless, these colleges have been an outstanding success and have grown, despite receiving no official sanction and not being more or less formally recognised by the Department, which would have advised Ministers of all political persuasions not to have anything to do with them.
In accordance with the provision, the Minister for Education has the power to approve the college, the course and the level of fees to be charged for the course. In my best political judgment, and from experience gained over a period of time in this House, given this grip by the Department, no college would be able to start off, because I know how the Department works and I am long enough around to know that it would not allow it. I do not know how to resolve this problem. It was suggested that the NCEA be given this power.
I am not convinced of that either. There are many people who are already in the education business and, as Deputy Cullen said, there is a great deal of competition. There have been tremendous successful operations of this. I cannot see new colleges, who want to give courses for people who cannot get into the points colleges at present — which is a good development — wishing to start up. I like the principle and the relief the Minister is trying to give but I have grave reservations about this approval mechanism which is built into it by the Minister for Education, in consultation with the Minister for Finance. I have thought about this for some time. I thought of the NCEA and I went off that idea too and perhaps the Minister for Education's way might be better but I do not like it.
I am strongly of the view that Deputy McCreevy is right on this issue. I envisage a circumstance where a private college, for instance, Portobello College or the Griffith College Dublin, decides to increase its fees, there will then be a parade of students down to Marlborough Street and the Minister will say, "don't worry, if they increases fees there, I will knock the college off the list for tax approval". It gives an immense control to the Department of Education to turn on and off the tap of approval in relation to fees, courses and colleges generally. One of the Minister's officials said this morning that if we went so far down the road, we would be outside the definition of a Finance Bill. It amazes me that we are surrendering in a Finance Bill to the Department of Education virtually total control over the private sector colleges.
Can I make the point that I think the section is likely to be operated in the reverse way. Given the scarcity of third level places compared to the demand, I think the Department of Education are likely to be out there to try to improve courses and that is why the NCEA are not specified in this section I would imagine.
I think that is in an ideal world, Chairman.
You have never been to Marlborough Street.
The NCEA has, in fact, designated colleges and institutes which are not part and parcel of the State system. I will just put into the record some of them for interest and information: the Accountancy and Business College, Ireland in Longford Street in Dublin; the Byrne College of Art; Griffith College, which was referred to a few minutes ago, the HSI College in Limerick; the LSB College in Balfe Street in Dublin; the Midwest Business Institute; Skerries College in Cork, the American College in Dublin and the Institute of Education Business College in Portobello.
On the qualifying fees, there is no question of the Department of Education or the Department of Finance fixing a limit to the fee an institution may charge. All we will do is fix the amount of the tax relief, We are not going to get into the business of regulating fees. The Department of Finance will exercise its powers with the Department of Education.
On the point made by Deputy McCreevy, as our taxation law and finance legislation has become more interventionist and sophisticated, the Revenue Commissioners cannot be the sole body who would exercise judgment in relation to education, BES schemes and some others. There have to be others as well. That is why there has been, in recent years, the inclusion of "with the consent of the Minister" and the Minister tends to be the line Minister — in this instance, the Minister for Education — who would have the expertise and the knowledge plus the consent of the Department of Finance. It is a belt and braces system that has worked reasonably well. Both Ministers are immediately accountable to the Dáil and that is the place these questions can surface quickly and can be confronted. We have the committee structure as a backup to that.
A technical question, is relief going to be given on an actual year basis or a preceding year basis?
Actual year.
So a PAYE person will have to have a balancing statement at the end of the year and get it done like that. I see under the section the relief will be available to the person who pays the fees on his own behalf or on behalf of a dependent. What is the situation? I know of cases where parents would not be in a position to pay the fees, for various reasons, but an uncle or family friend might do so. Is there any provision in this section to allow that person to receive tax relief? I know of at least two cases where people who, for different reasons, did not pay the fees from the outset but are now paying them.
There has to be a legal relationship. They have to be either a dependent or a legal guardian of some sort.
I just wanted to know the position.
We will move on quickly because we have important sections coming up.
Would the Minister consider extending the meaning of "dependent"?
Dependent is dependent.
No. A dependent is defined as being a spouse or child of the individual.
Perhaps Deputy McDowell might put down an amendment on Report Stage. The Minister would then have a chance to consider it.
Have you just declared an interest, Deputy McDowell?
Mr. McDowell
No, not at all. I am not that old.
The next amendment is in the name of Deputy McCreevy.
I have asked Deputy Ó Cuív to move this amendment.
I move amendment No. 8:
In page 19, before section 7, to insert the following new section:
"7. An allowance of £500 per annum will be granted to people whose primary place of residence is off-shore islands which are not connected to the mainland by bridge or causeway.".
The proposal in this section relates to people living permanently on offshore islands. It is not commonly known that people living on offshore islands are, perhaps, the only people who pay VAT on food. The reason is that, in many cases, the food is delivered directly to offshore islands and the people there have to pay VAT on the transport costs of their own goods. As a consequence they are paying VAT on items on which no one else in the country pays VAT. It is well recognised that the cost of living on the offshore islands is far higher than on the mainland. It is stated Government policy to develop the islands and encourage people to remain on the islands. In the interests of equity it is proposed that those living on offshore islands would be given tax relief to offset the extra costs and the extra tax they pay on food and other goods with a zero VAT rate.
It brings an entirely new meaning to the phrase "offshore tax haven".
There is a long and a short reply to this. In deference to the time constraints I will confine myself to the short reply. The offshore islands already receive substantial State support and intervention in a variety of ways. If we were to initiate a principle that people were compensated or given special tax treatment by virtue of where they lived, it would begin with the offshore islands but would move rapidly to a stage where someone living in an area of high crime incidence — like Dublin's inner city — would qualify for an even greater allowance.
Like the former Taoiseach, Mr. Haughey.
I understand the motivation behind the principle — having recently been on Inis Mean with the President of the Republic of Hungary — and I can recognise the costs involved with living on an island. If the principle were initiated, however justified it might be, there would be no end to it. We would eventually have to cancel it out. If there are location problems the location should be assisted but the individuals who live there should not. There would be great distortions.
Perhaps the Minister might indicate what special services are available on offshore islands. I am not aware of them. Many State services available in a subsidised form on the mainland are not available on the islands. The Minister might clarify exactly the services which are particularly and especially provided to people on offshore islands.
I am speaking from memory and subject to correction. The Deputy is more knowledgeable about the immediate question of offshore islands because there are three in his constituency.
: There are four.
Four. The Deputy has just proved my point. Am I am correct in thinking that the secondary school students are given boarding school facilities?
The Minister is not altogether correct. The secondary school students are in exactly the same situation as someone who lives more than three miles from a bus service. Furthermore, they are subject to a very restrictive means test of £9,000. I know of one family on an offshore island whose small income and social welfare payments put them over the means limit and they receive only eight-fifteenths of the cost of boarding school. That is equally available on the mainland to people who are at least three miles away from the bus service.
There is nothing special for the islands. Some of the Gaeltacht islands do enjoy some benefits, not because they are islands but because of their Gaeltacht status. One of the problems which we face in this area is that the non-Gaeltacht islands have been totally discriminated against because people have presumed that benefits which are available to non-Gaeltacht islands are equally available to non-Gaeltacht islands.
Furthermore, the Minister has not addressed the VAT anomaly. Islanders pay VAT on items which nobody else in the country has to because they have to pay VAT on the transport of those goods. In the case of offshore islanders, that can account for 20 per cent of the cost of basic goods. Therefore, there is not tax equity at present.
The Finance Bill is one instrument available to Government to address problems within our society. To bring in a series of intervention measures along the lines which the Deputy is suggesting through the Finance Bill, as distinct from direct financial assistance by way of grants and so on to the community as a community, would be a distortion of the Finance Bill. It would interfere with the principle of equality of treatment of citizens, irrespective of where they are located and could, over time, whatever the legitimacy of the arguments which the Deputy is advancing, be equally applied to people living in rural Ireland or city centre areas who are exposed to environmental hazards, or whatever, with associated costs.
I do not know the difficulties associated with the four islands in the Deputy's constituency in anything like the detail which the Deputy does. However, the finance tax code is not the mechanism for intervention; there are other ways should the Oireachtas decide that is the best thing to do. This would introduce a distortion which would be offensive, and would create a precedent which would be unstoppable and I suspect the result would not be to the Deputy's liking.
It is not true to say that tax breaks, reliefs and incentives are not given on an area basis; we already have that. However, they tend to be given to corporate bodies and have now been extended to seaside resorts. Second, grants and so on tend not to deal with an underlying cost problem because they tend to be one-off payments. Is the Minister suggesting that every person living on an offshore island will be given a yearly cash grant of £200? If he does not do that he will not offset the problem.
He is talking about the inequity in development costs; I am talking about the inequity in living costs because the tax system is balanced in such a way that islanders end up paying tax on items on which nobody else pays tax. Is the Minister willing to look at some mechanism to ensure that the tax paid by islanders on zero VAT-rated goods will be rebated to them in some way through the tax code, because nobody else pays tax on those items in this State?
The Deputy is widening the issue. I understand the importance of this to islanders——
Does your Government?
As western development is part of the Department of the Taoiseach, it is a matter for this committee and an issue on which we might have a chance, before too long, to have a wider discussion.