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Dáil Éireann díospóireacht -
Wednesday, 21 Jul 1965

Vol. 217 No. 11

Committee on Finance. - Vote 6—Office of the Minister for Finance.

I move:

That a sum not exceeding £319,400 be granted to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1966, for the Salaries and Expenses of the Office of the Minister for Finance, including the Paymaster-General's Office.

This year the Finance Bill was introduced at a much later stage following the Budget than is customary. I think the Minister realises, as a result of the discussion which took place here, that that procedure is most unsatisfactory and is indeed an inefficient way of doing important business. Every year the Finance Bill is a highly technical measure which requires a good deal of research and consultation. It was very difficult this year, because of the short time available, to undertake the necessary research and, because of the added difficulty of the printers' dispute, it was virtually impossible to have consultation with outside interests.

I am sure the Minister has received, as other Deputies have, representations from interested groups. In a great many cases, these representations arrived late for the particular Stage. Undoubtedly, that was contributed to by the fact that the newspapers were not available and also by the fact that the Bill was so long delayed after the Budget. As a result of the general lack of publicity, many individuals had to ascertain the position in whatever way they could.

On this I should like to join in the very deserved tribute paid to the staff here for the remarkable manner they have enabled the work to be carried on. Nevertheless, anyone who has endeavoured to follow the proceedings found it very difficult with the typescript compared with the normal manner in which the debates are printed. I should like therefore to suggest to the Minister that whatever steps are necessary should be taken in the future to ensure that the Finance Bill is got ready within a reasonable time.

I appreciate that certain aspects of the Bill may not be known until the Budget is decided but once the Budget is decided, it ought to be possible to introduce the Finance Bill at greater speed. In fact, if the Bill had been introduced more quickly after the Budget, it would have been possible to have had a more satisfactory discussion. The fact that it was introduced so late meant that Deputies had to make up the necessary facts about it quickly and very often, because of the amount of research and discussion involved, inadequately to the extent that it requires further consultation. I have already paid what I believe is a well-deserved tribute to the skill with which my colleagues devoted their energies to that aspect of the matter.

I appreciate that the Minister was new to the Department and, naturally, had to deal with a number of matters that he had not in some respects certain experience of but I am sure he appreciates that the position this year at the end of the session in respect of an important measure of this sort was unsatisfactory.

The other matter which I wish to ask the Minister about is this: has he any information on the causes of the movement of money from this country to Britain or to other outside countries and, if so, can he indicate the reasons that have been given to him? I understand it has been suggested that there are two possible reasons, the first being, so far as Britain is concerned, the fact that higher interest rates operate there and the second reason being—on this I would be interested to hear whether or not the Minister has any information— the change in the legislation which imposed an obligation on banks to disclose details of deposits made with them in individual cases. It is suggested that the legislation compelling the disclosure of the extent of deposits resulted in people moving money elsewhere. I would ask the Minister if he can generally indicate what reasons have been given for the movement of capital from this country in recent times.

The last matter I wish to refer to is a matter which I raised here by means of Parliamentary Question, that is, the position of finance companies or institutions which offer substantially higher rates of interest. Most of them, so far as I am aware, are external institutions which operate here or have branches here. The Minister said that he had no power to deal with this matter but that banking legislation was in contemplation. It is a matter that we should take cognisance of and we should certainly express concern if there is any doubt about the credit-worthiness of these institutions. We have had here in recent years one example of a case in which a great number of people were induced to invest in a certain undertaking. In matters of this sort, caveat emptor may be the rule but, nevertheless, a number of people were induced to invest and considerable sums were lost.

Not lost.

Well, individuals lost.

Mr. Singer was enjoying himself.

We should take the necessary steps to ensure the possibility of such cases occurring in other fields is avoided and the legislative powers which may be needed should be sought.

May I say, in reply to the first point, that I appreciate completely the difficulty experienced by the Opposition in relation to the late publication of the Finance Bill this year? As Deputy Cosgrave said, there were many contributing factors, one, of course, being the general election taking place roughly about the time the Budget would have been introduced, followed by the Finance Bill.

Secondly, Deputy Cosgrave was generous enough to refer to the fact that I was new to the Ministry of Finance. I am not going to suggest that that newness was not a contributing factor to some degree to the late publication of the Finance Bill. As the House is aware, I came in almost immediately prior to the Budget and then, having framed the Budget and having put it through the House, I had to tackle the provisions that were put before me for the Finance Bill.

If that had never occurred, I felt that the time had come when some little change in procedure might be contemplated. As the House is aware, there are many matters included in the Finance Bill which are necessarily included but which are not particularly applicable to the Budget. I propose in this year to ensure that matters such as the matters the Revenue Commissioners would like to submit, apart altogether from the budgetary provisions, will come to me at an early stage in the year, so that, having had the opportunity to examine them and get Government decisions on them, where necessary, the actual presentation of the Finance Bill after the Budget has been put through will be expedited.

I do not know if the Taoiseach announced the other evening that I also contemplated suggesting a change in finance business generally as presented to and debated in the House. There is a great deal of overlapping and there are debates, for example, the debate on the Vote on Account, which take place at a time when the type of information that it would be essential for Deputies to have is not at that stage available. I propose to suggest that there would be a certain rationalisation of the finance and economic debates in coming years and I propose to suggest legislation accordingly.

However, I hope that the combination of circumstances that happened this year will not occur again but that, even if it does, other administrative, if not very revolutionary, changes I will propose will expedite the issuing of the Finance Bill.

With regard to the other problem Deputy Cosgrave has raised, the shortfall in bank deposits here, in availability of capital, has been caused more by a drop in the money coming in rather than an increase in the money going out. It cannot be denied that there is some increase in the outgoings by reason of the very favourable rates of interest being offered in Britain. Anybody who takes up the British Sunday papers or in some cases, our own Sunday papers, when they are available, will see the extent to which some borrowing corporations, in many cases municipalities and other local authorities in Britain, offer very attractive rates. So I cannot deny that it is probable that some of the drop in available money could be attributed to that factor.

Deputy Cosgrave did ask me a question some time ago as to the effect the foreign finance houses operating in this country had and I am afraid I was not able to give any precise information about that, nor am I able to do so at this stage. With regard to whether the obligation imposed on banks under the 1963 Finance Act to make returns of moneys on deposit earning a rate of interest of £15 and upwards caused a drop in deposits, I made inquiries about this long before I became Minister for Finance and I was told at that time, and subsequently on making inquiries as Minister for Finance, that that was not a significant factor in the drop in deposits.

I might say in passing in that respect that it is very easy for people to hide away money in this country. They do not have to stash it away abroad. There are many outlets for that purpose. Naturally enough, it is only when people want to use money that their having it is disclosed. In any event, in the recent Finance Bill, I raised the amount from £15 to £50 interest on deposits which would be required to be disclosed in future and to the extent that the disclosure of these deposits to the Revenue Commissioners has caused a drop in the amount of deposits, that will be cured.

As Deputy Cosgrave intimated, it is not easy to control the flow of money because that is an exercise which would not be peculiar to us. There is a free flow of money between this country and Britain and we work out considerably on the credit side in that two-way flow. However, I mentioned in reply to Deputy Cosgrave's Parliamentary question that I proposed to introduce new legislation to see what could be done especially from the Central Bank's point of view and generally speaking, on the point raised by Deputy Cosgrave, I hope the situation will show an improvement as a result of the action I propose to take.

Did I understand the Minister to say that deposits which yield less than £50 need not be disclosed to the Revenue Commissioners?

The banks need not disclose them.

Irrespective of what amount is on deposit, the Revenue Commissioners must get information even on Post Office savings. Where a depositor might put down that he has £400 in Post Office savings, the Revenue Commissioners often request the submission of the book.

I was referring to deposits with the commercial banks.

As a result of our recent legislation here, irrespective of the amount of money on deposit, it must be disclosed.

The Deputy may only ask a question when the Minister has concluded his speech.

Irrespective of the amount of money, whether it is liable for income tax, the Revenue Commissioners would demand to know the exact amount. That is quite clear as far as I can see.

Acting Chairman

The Deputy is not asking a question.

All money must be disclosed. There is no one in the State more aware of that than the Minister.

Vote put and agreed to.
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