This is a hardy annual just like Deputy Tully deals with people's expenses in travelling to and from work.
Committee on Finance. - Finance Bill, 1968: Committee Stage (Resumed).
Debate resumed on the following amendment:
Before section 12 to insert the following new section:—
"Section 134 of the Income Tax Act, 1967, is hereby amended by the addition at the end of the section of `or in the case of a married couple, the sum of £1,000'."
—(Deputy N. Lemass.)
Is this amendment in order?
It has been adjudged to be in order.
Perhaps you would explain, Sir. I thought it would be automatically ruled out in so far as it imposes a charge on the Exchequer.
Amendments Nos. 12 and 13 have been adjudged to be in order. It is to relieve tax.
It is a charge on the Exchequer.
What I wish to discuss is a principle.
I would have thought so.
Income tax is being imposed for the year and this is a relief on it.
I accept your gracious ruling, Sir, but it is news to me.
There will be other amendments.
This type of amendment has been ruled out on numerous occasions in my experience.
The Chair does not think so.
Thank you. To recap slightly, I want to refer to the Seventh Report of the Commission on Income Taxation. Paragraph 34 reads:
The personal allowance for a married man (£394) is at present less than twice that for an unmarried person (£234) but from 1956-57 to—
It says 1956-60 but I assume it means 1959-60—
—inclusive the married allowance was more than twice, and from 1951-52 to 1955-56 it was exactly twice, the unmarried allowance.
Paragraph 36 reads:
We recommend that the personal allowance for married persons should be at least twice that for unmarried persons.
I should like to start off by saying I am glad to see from the letter columns in the evening newspapers that they have been paying some attention to what is in my mind at the moment. There are good arguments in favour of the proposals in the amendments. I take it amendments Nos. 12 and 13 can be dealt with together because the arguments are much the same.
If the Deputy wishes.
The Deputy can deal with amendment No. 12.
I am prepared to discuss amendments Nos. 12 and 13 together because the same principle is involved.
In my opinion, they are equally out of order.
They seem to be exclusive.
This is a new concession and the Deputy is trying to amend it. He should take the first one first. He cannot take the two together.
If the first one is lost, I probably will not move the second. As I was saying, I was glad to see that some of the evening papers, the Evening Herald in particular, have been publishing letters on this subject. There are two lines of argument. One is that while we have unemployment, which we have unfortunately, a married woman should be discouraged from working, thereby making more jobs available for men. On the other hand, people with particular skills and abilities are penalised by the present taxation on married women to the extent that it might discourage them either in the first place from getting married, or in the second place, from seeking employment after they are married.
When I raised this matter before, the Minister said such an amendment was unnecessary and undesirable because, in his opinion, they would have to be earning a great deal of money before they would be affected by this provision if the married allowance is less than twice the single allowance. On Second Stage of the Finance Bill last year, I expressed the wish that the Government would recognise the fact that people with high technological skills and special managerial experience should be given extra concessions in taxation because they are the people we need to create extra employment. If the Minister's argument is correct, that the working husband and the working wife would have to be in a reasonably high income bracket before they would be affected by this discrimination, I say the Minister is contradicting what he has done in this Budget by recognising the necessity to give encouragement to people with top managerial experience and top technological experience.
To put it in slightly different words, if a girl goes through the university and qualifies in science, or architecture, or managerial subjects, that is the type of girl in whom the State has invested a great deal of money to give her those skills. She marries a man with equal skills and because she gets married to that man, the income tax law will discriminate against them for getting married. If they lived together and did not get married at all——
Live in sin? Is that what the Deputy is advocating?
If they lived in sin, they would get a greater personal allowance.
Why should the Deputy assume that they would be living in sin?
He is saying that they are not married.
They could live together without living in sin. There are such things as platonic friendships.
I will just raise my eyebrows: that is all.
I am not even raising my eyebrows. I am amazed that the Minister thinks such a situation could arise. I have known the Minister for a long time, and the Minister has known me too. However, perhaps that type of rare situation could arise. In our Constitution we make special reference to the Roman Catholic religion. We know exactly what the Roman Catholic views are on the question of marriage. In fact, I am quite surprised that the Irish Roman Catholic Hierarchy have not already objected to this discrimination against married women shown by the Government. These women may wish to work at all levels. There are women who want to work on the factory floor. There are women who want to work in the universities lecturing and passing on their own knowledge. There are women who want to work in research. There are women who want to work in other fields and in so working make an important contribution to our society.
Unfortunately sex differentiation in this country has not changed in 50 years so far as women's rights are concerned. I am sorry to see the Government endorsing what the trade unions do in practice. The trade unions have a slogan about equal pay for equal work. We have signed a Council of Europe international agreement aiming at equal pay for equal work.
The Government refuse to sanction equal increases for men and women.
Lip service has been paid by the trade unions and the Government to this principle but, in effect, nothing has been happening. Sex differentials have not changed in this country in 50 years. This applies not only to income tax but in job rates and job opportunities. In job rates it applies practically in every field except in medicine, dentistry, journalism, architecture, law and in certain cases in university teaching and in accountancy.
In Dáil Éireann.
In the Dáil and Seanad and in commercial travelling.
And the judiciary.
Yes, we have one lady justice now.
Why not extend it to Dáil Éireann stenographers?
We have, mainly through the trade unions, become a class society in which a woman is treated as inferior. The relationship between men and women in employment and in every field has become tough and lasting and it is time we made some change or at least that we should revert to the situation we had between 1956-57 and 1959-60 and between 1951-52 and 1955-56. I should prefer the slogan of equal pay for equal ability to equal pay for equal work because it was shown by a Royal Commission in England in 1946 that in some jobs women could produce as much as men.
Equal pay for work of equal value.
Equal pay for equal ability would sum that up, too, The whole principle here is that if people have a useful contribution to make to society, if they have acquired the skills and talents which the society requires, if they should get married— let us hope the marriage, particularly between highly qualified people, would result in offspring of equally high capacity to contribute in future generations —I do not think they should be discriminated against in the taxation laws.
What I am seeking to do is that which was recommended by the Seventh Report of the Commission on Income Taxation — simply that if incomes be taxed individually and one gets married, this should not leave the woman of ability or skill at a disadvantage in taxation as she is because of negotiations by her trade union, should she be in a trade union.
It seems to me that Deputy Lemass has made his case on the basis of wives who go to work and, as he put it, make a contribution to the economy, to society. I am afraid that the amendment as framed would mean that all married couples would get this increased allowance whether the wife was working or not. To that extent, the case put forward for the amendment is defective. Deputy Lemass wants to argue for the amendment along the lines that married women make a contribution to the economy and therefore are entitled to some recompense under the income tax code. Under that code, if he wants his amendment to be effective he must frame it differently. I have said it before, and I repeat it here, in regard to all these matters of income tax allowances, the primary consideration to which I must have regard is that of cost.
The cost of implementing the proposal enshrined in the amendment of Deputy Lemass would be £1.4 million per year and I could not contemplate a change of that nature at this stage— a change involving a cost of that size at this stage. This is only one of many alterations in the scale of allowances which I am sure Deputies would like to put forward. Different Deputies have their own favourite proposals in this respect. The trouble about them all is that they nearly all cost a great deal of money. We could not think in terms of a substantial alteration in the structure of personal allowances unless we were prepared to have some fundamental review of our total tax structure. I do not despair of achieving such a review and perhaps of making some very fundamental revisions in the whole of our taxation code. However, short of some such fundamental review, some complete revision of the structure as a whole, I do not think we can afford to be tinkering around with this or that personal allowance which appeals to the sense of fair play of some particular Deputy.
I am surprised that the amendment is being debated here to-night because on numerous occasions we have attempted to get amendments to the Finance Bill and have had them ruled out. There were amendments which we in Labour felt we should like to put before the House but we did not. It is here that Deputy Lemass chanced his arm and got away with it. I am glad he did——
This is the fourth time.
——because it gives the House an opportunity to discuss this aspect of it. The suggestion which has been made by Deputy Lemass on this amendment is that this would apply to professional people mainly, or to people who are working for large salaries. I do not go the whole way with him — it is his amendment and he is entitled to put his own interpretation on it — but the biggest trouble I see is that normally in the case of professional people earning big salaries, whether the wife is working or not, the amount being deducted in income tax is far greater than in the case of a man who is earning £10 a week and attempting to rear a family and whose wife finds a part-time job. At the present time, quite a number of women are working in Butlin's holiday camp, and are earning wages which may be, for a short week, about £6. A lot of them are married women.
The same thing happens in domestic service at the present time. As the Minister is aware, there is a scarcity of labour both in domestic service and in female land workers because the Minister for Social Welfare will not allow unemployment benefit to be paid to domestic servants or female land workers. If they go to work, if they are married and if their husbands are earning £11 per week, the wife will get only 30/- a week tax free. This is an utterly ridiculous situation. On the other hand, the husband, who has a reasonable salary and because of that the wife is able to stay at home and look after the family, the husband is caught because the income tax being deducted is so small that he does not get double what he would get as a single man, and the amount being deducted is therefore greater than it should be.
The Minister said it would cost a lot were all these suggested amendments accepted. We all have our pets in this matter and they would all cost money, according to the Minister. Of course they would but the big snag with this and previous Governments is that they do not seem to have got their priorities right. The whole tax code has got to be re-thought and a new system devised because the present one is unfair. I do not think even the Minister would argue that a tax code which taxes a man and his wife on £11 10s. per week, while it gives a remission of tax to people with far greater incomes under another heading, could be right. It is not included as an amendment for the reasons I have stated. Similarly, my friends, the workers, who use vehicles to go to work do not get a tax remission. A man who is living with his sister, looking after an aged mother who has no allowance, maybe not even an old age pension, is treated as a single man. This is the sort of thing which means that the tax code is all wrong and should be recast.
The Minister has made changes from time to time and I consider the Minister is pretty able, but I would not accept the pat answer which he has given to this and various other suggestions: "It would cost too much." That is no answer. Even though it would cost too much, somebody else must be made to suffer but somebody in a better position than those who are, at the present time, being taxed on a far greater scale than they should be.
For that reason if Deputy Lemass cares to put the proposal to a vote, I will be only too glad to go into the Lobby with him.
You are as safe as a house.
Deputy Lemass's proposal, as I understand it, is to double the earned income relief in the case of a married couple. As I understand section 134 which he seeks to amend, it provides that the earned income relief in respect of assessable income shall be a sum equal to one-fourth of that income, but not exceeding, in the case of any individual, the sum of £500. Deputy Lemass proposes to add on at the end of that "or in the case of a married couple, the sum of £1,000". More power to him. If he wishes to have a division, we will support him.
I have not got section 134 of the 1967 Act before me but the Minister has pointed out to me that the effect of this amendment would be to increase the allowance from £500 to £1,000, whether or not the wife was working. My intention when I framed this amendment, and apparently I framed it incorrectly, was an allowance of £500 for the husband and an allowance of £500 for the wife, that is if the wife was earning. Apparently as I framed the amendment, whether or not the wife was working, the allowance would automatically be payable. Therefore, with the permission of the House, I would like to withdraw amendment No. 12 and I propose to move amendment No. 13.
Wait now. With all due respect to Deputy Lemass, he will not get away with that. Deputy Lemass, I assume, is of mature age. He comes in and he puts down an amendment to section 134 of the Income Tax Act, 1967, that the words "or in the case of a married couple, the sum of £1,000" be added. Section 134 is quite explicit and it is a short section. It is as follows:
An individual who makes, in the manner prescribed by this Act, a claim in that behalf and makes a return in the prescribed form of this total income shall, for the purposes of ascertaining the amount of his assessable income for the purposes of income tax, be allowed a deduction from the amount of his earned income as estimated in accordance with this Act of a sum equal to one-fourth of that income, but not exceeding, in the case of any individual, the sum of £500.
Deputy Lemass seeks to add "or in the case of a married couple, the sum of £1,000". There is no possibility of error.
It is quite clear what he meant.
It is clear, if the Deputy read my Second Stage speech.
It is perfectly clear he wished in the case of a married couple to double the sum from £500 to £1,000. We do not have in this House a situation in which one tables an amendment, one moves it and one makes an appeal to the women of Ireland, and when it is indicated that support may be available for one's proposal, says: "I did not intend this amendment to mean that." Deputy Lemass's amendment will not be withdrawn without this House's agreement.
The Deputy is being totally mischievous.
Listen——
You are not going to bully me at all.
Nor me.
Very well: I shall wait until the Minister concludes.
Deputy Lemass's theme and argument has been sustained for about two years of my experience and it is perfectly clear that what he meant to do was to give an extra earned income allowance to a working wife equivalent to that of the working husband. It was only when I pointed out that his amendment was incorrectly drawn that he sought to withdraw it and Deputy O'Higgins knows that as well as I do.
I said that in view of the Minister's explanation apparently this amendment of mine has been worded to give a different interpretation from what I intended. I should like to make it quite clear to this House that I sought advice from officials of the Minister's Department on the framing of this amendment 12 months ago. I explained to them what I wanted to do, that I wanted to put down an amendment for discussion because I felt that in the Seventh Report of the Commission on Income Taxation, Paragraphs 34 and 36, should be amended in the case of working wives and working wives only.
That is the next amendment.
It appeared to me to be necessary to amend section 134 to make section 138 workable. Deputy O'Higgins is a lawyer. He may be able to tell me whether an amendment to section 138 would, in fact, be workable, whether or not there was an amendment to section 134, I do not know. My advice was that it would not.
The Deputy has evinced support from this side of the House.
We will vote on it so.
Certainly.
Question put: "That leave be given to withdraw amendment No. 12".
The Committee divided: Tá, 44; Níl, 22.
Tá
- Allen, Lorcan.
- Andrews, David.
- Boland, Kevin.
- Booth, Lionel.
- Boylan, Terence.
- Brady, Philip.
- Briscoe, Ben.
- Browne, Patrick.
- Calleary, Phelim A.
- de Valera, Vivion.
- Dowling, Joe.
- Egan, Nicholas.
- Fanning, John.
- Faulkner, Pádraig.
- Fitzpatrick, Thomas J.
- (Dublin South-Central).
- French, Seán.
- Gallagher, James.
- Geoghegan, John.
- Gibbons, James M.
- Gilbride, Eugene.
- Haughey, Charles.
- Kennedy, James J.
- Carter, Frank.
- Carty, Michael.
- Childers, Erskine.
- Clohessy, Patrick.
- Colley, George.
- Cotter, Edward.
- Crinion, Brendan.
- Cronin, Jerry.
- Cunningham, Liam.
- Kitt, Michael F.
- Lalor, Patrick J.
- Lemass, Noel T.
- Lynch, John.
- McEllistrim, Thomas.
- Millar, Anthony G.
- Molloy, Robert.
- Mooney, Patrick.
- Moore, Seán.
- Nolan, Thomas.
- Ó Ceallaigh, Seán.
- O'Connor, Timothy.
- Smith, Patrick.
Níl
- Belton, Paddy.
- Burke, Joan T.
- Byrne, Patrick.
- Clinton, Mark A.
- Coogan, Fintan.
- Corish, Brendan.
- Desmond, Eileen.
- Dockrell, Maurice E.
- Esmonde, Sir Anthony C.
- Harte, Patrick D.
- Hogan, Patrick (Clare).
- Hogan, Patrick
- (South Tipperary).
- Jones, Denis F.
- Kyne, Thomas A.
- Larkin, Denis.
- L'Estrange, Gerald.
- Lindsay, Patrick J.
- O'Higgins, Thomas F.K.
- Reynolds, Patrick J.
- Ryan, Richie.
- Timmons, Godfrey.
- Tully, James.
Tellers: —Tá: Deputies Carty and Ge oghegan; Níl: Deputies L'Estrange and James Tully.
Question declared carried.
Amendment No. 12, by leave, withdrawn.
Let Lemass lead on.
Noel, he means.
Amendment No. 13.
I am not satisfied that the amendment as worded would achieve the objective I have in mind so I do not intend to move it.
Amendment No. 13 not moved.
SECTION 12.
Question proposed: "That section 12 stand part of the Bill".
I think it is a pity that Deputy N. Lemass was not satisfied that amendment No. 13 met his point of view. It was unfortunate that last year Deputy N. Lemass found himself not in the House when a similar amendment might have been moved by him.
The Minister is this year providing a measure of relief in the year of marriage for the person who gets married. This marriage relief has like many other reliefs under the income tax code, remained unaltered for many years and with the fall in the value of money the fact is that deflation itself has become a source of income to the Minister for Finance. This year in relation to the particular year of marriage he is increasing the allowance to a married person from £394 to £494. Deputy N. Lemass used to advocate the problem of the wife's earned income allowance. This is just an example of the kind of problems the Minister for Finance is dealing with in Section 12. The wife's earned income allowance stands at £45 as it has stood since the Finance Act of 1920 and so it is like many other allowances under the Income Tax Code. They have not been altered. They have never been changed. What is proposed in this section is a very limited, a very small, measure of relief and it certainly does not in any way measure up to what is required.
I should like to have seen Deputy N. Lemass move amendment No. 13. It might have provoked a useful debate. At least this time he was here to say that he was not moving it. Maybe next year, if the Minister for Finance is still there, without seeking advice Deputy N. Lemass may be able to put down an appropriate amendment. Certainly, I intend, a Leas-Cheann Comhairle to put down an amendment on Report Stage which I hope will evoke support from Deputy N. Lemass and the people in the Government Party who support him.
You better have it drafted properly.
I will see that it is drafted properly and I will not require Deputy N. Lemass to withdraw it.
The Deputy should try to understand the amendments put down in his name at the moment; it would be a great help.
It would be a great help if the Minister displayed some courtesy. I know he is annoyed. He should take it up with Deputy N. Lemass, not with me. In any event, this section in its limited relief will not, of course, be opposed by us but we do raise the whole question of the different personel allowances which, in fact, have never been changed, largely speaking, and with the fall in the value of money have nosedived into nothing. I know there are other aspects in relation to the personal allowances which perhaps other Deputies might like to raise. This is the very section I think on which they can be raised.
I do not want to be involved and I have tried to avoid the flashing knives across the floor. I would, however, like to comment on something on which the Minister might enlighten me. It appears that if a couple marry before the week ending the 5th April they achieve what the Minister proposes here. Secondly it represents a rebate of £25. Perhaps the Minister would say if that is correct. Many people talk about income tax and income tax reform. When they talk about £100 they talk about £100 savings. In this case it is at the standard rate; it is £25. Perhaps the Minister would say if this is correct, just to clear the air.
It appears to me that the Minister, whether he likes it or not, if he remains until next year as Minister for Finance, must get down to the problem of changing the whole tax code. It is an extraordinary thing that at the present time it appears as if it is the lower paid worker who is, in fact, paying income tax. The higher paid men or women are able to get professional advice to ensure that they get the full value, and a little over, of whatever allowance they can get while the lower paid worker in receipt of from as low as £6 10s. to £14 or £15—appears to be paying and this has not been contradicted. It appears that the money that PAYE has produced is collected from that wage or salary group. The fact is that since PAYE was introduced the amount collected has gone up by leaps and bounds. I heard on the radio a few days ago that PAYE produced £17 million. It seems an astonishing amount to be collected from those people. That might be the answer to what the Minister has been stating, that it would cost too much to do anything for those people because there are so many involved.
I know it is not an easy problem. The money must be found and if they get a rebate somebody else must pay. I would appeal to the Minister to look at this problem and see that, in fact, he is taking money from people who cannot afford to pay it. Let us look at the situation which has been mentioned here on more than one occasion. Twelve years ago an unskilled rural worker's wages was £5 per week. His fore, he was earning 25/- overtime before he was taxed. Now the rural wages average around £10 per week and the tax free allowance is still £6 5s. Not alone are you taxing on over £6 5s. but you are taxing money which is required by these people to eat, to live, and clothe their family. I do not want to detain the House on this as there are other amendments to be considered but it does appear to me that we have been treating this question of income tax as if it were one of whether we dare not hurt our friends. Those who have money, we dare not be too hard on them. The soft people are those who have very little money, who can be caught and who will not protest. Therefore, I think the Minister, whether or not he likes it, must do something about this problem in relation to the personal allowance.
I carefully read the Minister's statement on Second Stage of this Finance Bill. The Minister gave a very detailed account of what he intended to do about our tax structure and mention was made of the setting-up of various committees. I gather he is inclined towards eventually going over to the added tax system. This will take a lot of work and research and will involve a big change in our tax structure and perhaps maybe even in our fiscal and financial codes. The Minister may be in a position to do that next year. In the event of his not being in a position by then to make radical changes—I realise that this is quite possible—I do agree that some of the allowances that are being made should be examined with a view to being increased, that is, the personal and earned income allowances.
In regard to my amendments here, I should just like to say out to the various women's organisations in the country that their slogan is contained in Appendix I of the Seventh Report. If there is enough support for this slogan then I am quite sure that any Government will go along with it. The slogan in Appendix I is: "One taxpayer and one charge." That is the only thing I was concerned about. I was not concerned about doubling the marriage allowance. If that slogan is adopted and taken up, that will be granted.
I know a couple whom I was talking to not so long ago. They were not blessed with children. After some years of marriage, the wife became a bit bored in the house and decided to take up a job. They are doing fairly well: they are paying £12 a week income tax. They have not any children. If they were not married, they would pay only £10 a week: there are a few shillings either way but that is the round figure. This could mean a cost to the Exchequer but I think the slogan "One taxpayer one charge" merits consideration.
It is being implemented.
Like Deputy O'Higgins, I welcome the additional personal relief for married people in the year of their marriage that is provided for under this section. However, I want to express some disappointment that, in this section, no provision has been made for relief for students who work in the day-time in order to get the necessary fees to take out a degree at night. I took up this matter with the Minister when speaking on the Budget. I am very disappointed that, under this section, no relief has been provided——
I would point out to the Deputy that this is confined to an allowance being made to people within the year of marriage.
I appreciate that. I merely express disappointment. This is the section under which the other allowance could have been brought in. I hope, before Report Stage, the Minister will seriously consider bringing in this measure of relief for a very deserving section of the community. I have had several approaches by students on this matter since the Budget. I hope the Minister will take another look at this particular aspect of the question.
I am sorry Deputy N. Lemass has left the House because the amendment which he did not move proposed to delete subsection (3) of section 138 of the Income Tax Act, 1967. That subsection provides that if the total income of the claimant includes any earned income of his wife the deduction to be allowed under this section shall be increased by an amount equal to three-fourths of the amount of that earned income but not exceeding in any case £45. Deputy N. Lemass has not seen fit to move the amendment. However, it is right that we should raise the point that that earned income relief for the wife was fixed under section 18 (2) of the Finance Act, 1920. It is 48 years old. It has not been changed since except that, when PAYE was introduced, the fraction was changed to 4/5ths but the maximum of £45 was retained.
It does seem a bit odd that £45, which was regarded as adequate away back in 1920, should still be the maximum relief in respect of a wife's earned income. Had Deputy N. Lemass framed his amendment correctly, I know he would have been strongly in support of the point of view I now express. On Report Stage, I shall move an amendment to deal with the inadequacy of this allowance and to suggest that it should be brought more into accord with the reality of our money values now.
Question put and agreed to.
NEW SECTION.
I move amendment No. 14:
Before section 13 to insert a new section as follows:—
"All personal allowances shall be adjusted from year to year in accordance with Consumer Price Index movements."
The purpose of this amendment is to insert a new section to achieve that all personal allowances be adjusted in accordance with cost of living changes in the value of money. It seems to me inappropriate, for instance, in relation to a wife's earned income allowance of £45 which was fixed almost 50 years ago, that we should still retain that limit while money values have changed. Fifty years ago, I am sure a sum of £45 had a purchasing power equal to that of £150 or £160 nowadays. The allowance of £394 in respect of married people has been unaltered over the years and, again, the fall in the real value of money has meant, in effect, that deflation has increased the tax liability of the taxpayer and deflation itself has become a tax gatherer.
If we think it right, in the income tax code, to make an allowance in respect of the married status of a person, or the fact that the income is an earned income, or with regard to the dependants a taxpayer may have, if we proceed to fix a money value on these allowances we should have regard to the fact that the real value of money changes and that these allowances, which are very near to each taxpayer, should be kept in accordance with the cost of living changes. This is the object of this amendment which may not be happily or properly worded but it is intended to achieve this result.
I support this amendment for a reason which has been raised here and in other places. I do not know whether the Minister is aware that what is called by some people the eleventh round of wage increases is almost completed and the increase ranges between £1 and £2 a week according to the length of time for which the agreement stands. I am talking now about ordinary workers. The extraordinary thing has come to light that practically every female and a very big number of male workers are only getting 15/3 for their £1 increase. This is one of the things that PAYE has done: it has ensured that when trade union officials like myself are negotiating wage increases, not alone have we to talk about a take-home wage but we have to watch whether or not the person for whom we are negotiating is paying income tax. If he is we have to up the demand in order to cover the loss he will suffer. It is ridiculous that when an effort is made to get a living wage for workers because of the increase in the cost of living, the State should then come along and take one-quarter of it away and say: "That is ours and you can do what you like with the remainder". The Minister must do something to deal with this situation. Whether Deputy O'Higgins's proposal is the ideal way to do this or not, I do not know, but unless the Minister does something about it it will cause serious unrest particularly among the lower wage groups.
I should also like to support this amendment. It is really the root of a lot of our problems today. There is no doubt that the absence of a change in the allowances for salaried workers and those on fixed incomes is responsible for the rise in the cost of living today. As Deputy Tully, speaking primarily on behalf of the small wage-earners, stated, he has to negotiate any increase, taking into consideration what they are actually going to get in cash. This involves a lot of hardship, particularly for the smaller people, because it takes from them money which they use to buy food for themselves, and for all sections of the community it creates an undesirable situation. As it stands at present without an increase in the allowances, it is a direct incentive to inflation and nothing else. Under the present income tax code, the greater part of any increase, no matter how big, is returning to the State revenue itself and as such, is increasing the overhead charges and so on by upping the cost of living and conferring no real benefit on those on whom it is intended to confer benefit.
Although I appreciate that the Minister has done a lot, and in fact has gone quite a long way to meet the requirements of families, if we are still fixed with a code which we have had for nearly half a century I cannot see how we can make any real progress in relation to the tax code. I do give the Minister credit for a little forward thinking and I am surprised that he did not think of this very necessary change in the tax code himself and I am also surprised that those who advise him did not advise him that this is the very problem our financial situation is facing today. I would ask him to give every consideration to this amendment and try to meet the situation, if not now then between now and Report Stage.
I also wish to support this amendment. Many times here I have argued the case for keeping these personal allowances in pace with inflation, for it is unfortunately true that today you have people who are trapped in the tax net by reason of the impact of inflation on their earnings, people who in real terms should not be so trapped. I have a certain sympathy with the Minister in regard to the difficulty in which he is placed, for he is hoist, so to speak, by the negligence of his predecessors. He told us some time ago that to increase the personal allowance by £10 would cost approximately £1 million and he argued that an increase of £10 in the personal allowance was a trifle. The major personal allowances have not been increased since 1954. In saying that, I overlook the increase made in 1960 because that was for technical reasons, merely to compensate for the abolition of the reduced rates relief about which Deputy O'Higgins was speaking earlier, and it had no real effect. I am sure the Minister will concede that to me. Therefore, we are in the situation that the last real increase in these allowances was made in 1954, 14 years ago. The impact of inflation on the pay-packet in these 14 years has been very severe indeed. By reason of the failure to keep these allowances in pace with inflation, a grave injustice is being done to the lower-paid sections of the community in particular.
I believe that Deputy O'Higgins's solution, to draw a line as of 5th April, 1968, and from there on to keep the personal allowance of £234 for single persons pegged to the cost of living index number, is a very practical and realistic approach to the problem, and I commend it to the Minister. The Minister today, and also on the Second Stage, indicated that the cost of significant improvements in the allowances was prohibitive, and he further indicated that these allowances could be significantly increased only if drastic changes were made in the tax structure. He indicated that added value tax might be the solution. Deputy Lemass, half an hour ago, on the principle of live horse and you will get grass, said he hoped that the Minister would do something next year about the reforms he was advocating if by then he had introduced an added value tax. It is quite clear that Deputy Lemass has not read the White Paper circulated by the Minister over the weekend because my understanding is that added value tax is proposed not as a substitute for income tax in its present form but as a substitute for wholesale tax and turnover tax so that we will still be saddled with our present archaic code of income tax unless the Minister, and I believe he is capable of doing it, takes a very hard, detached, objective look at the code in a spirit of determination to rectify the crude injustice under which certain taxpayers are at present labouring.
I do not know that I have anything to say. There is a fundamental, basic dishonesty in the approach of Deputies opposite to this matter. They know, as well as I do, that if anything substantial is to be done with regard to personal allowances, the money will have to be got somewhere else or else services that are provided will have to be cut down. I have paid tribute to the Labour Party on other occasions, and I repeat now that, when we come along with proposals for increased taxation to improve social services, the Labour Party follow us into the Division Lobby. The Fine Gael Party, however, want it both ways; they demand reductions in taxation and, at the same time, they demand increases in all sorts of services. If they want a substantial overhaul of the income tax code, as Deputy Byrne says, then let them demonstrate to me where I will get the money. If I were to double the turnover tax, I could make marvellous improvements in the entire income tax code, but it is no good coming in here, bleating about archaic codes and using emotive phrases to back up complaints without putting forward any positive suggestions as to where the money is to come from.
For some time past Deputy Tully has been suggesting that the lower paid worker is paying an undue amount of income tax. I, of course, would like to see the lower paid worker, first of all, getting more money, if he could possibly get it, and, secondly, paying less income tax, if that were possible. I do not imagine for one moment that Deputy Tully would suggest there is a reactionary, conservative Government in office in Britain, or a Government who favours the rich at the expense of the lower paid worker, and I propose now to take the case most commonly quoted in discussions of this kind, the case of the married couple with two children. Here, right up until one comes to the £5,000 per year bracket, the tax payable on any income is less than it is in Britain.
That is because the standard rate is lower.
I am giving the Deputy the facts. The tax payable by a married couple with two children on an income up to £5,000 per year is less here than it is in Britain. When you go over the £5,000 limit, it is higher here than it is in Britain. We must presume that a Labour Government in Britain are regulating matters as fairly as they can in Britain. At £700 a year the tax payable in this country by a married couple with two children is nil. It is £2 1s 9d in Britain. At £800 it is nil here and it is £17 10s 10d in Britain. So it continues up along the line until one reaches £5,000; then the situation changes. The tax payable here by a married couple with two children after the £5,000 a year bracket is higher here than it is in Britain. Deputy Tully, therefore, cannot suggest with any degree of legitimacy that in this country we are harder on the lower paid worker where income tax is concerned.
May I interrupt? As far as I could gather, Deputy Tully was concerned about even the single man who, after £6 10s per week, has to pay tax. His point was that it was ridiculous and unfair that a man should have to pay tax on moneys he spent on essential foodstuffs and clothing. That was his point. Can the Minister give any comparative figures for the single man in Britain?
Yes. On £500 a year and under, £10 a week and under, a single man pays less here than his counterpart does in Britain.
Has the Minister any figures for £7 and £8 a week?
On £7 a week, the tax payable here is less than it is in Britain. I am not for one moment criticising the British income tax structure; that is their own business. They work out the code there as they see fit, as they think best suited to their circumstances We do the same here. I want to rebut the argument that we do not deal fairly from the point of view of income tax with the lower paid workers and I make the point that at the lower end of the scale the income taxpayer here is treated more favourably than is his counterpart in Britain.
I do not see how anybody could incorporate a section in a Finance Bill on the lines of this amendment. To me it is quite meaningless. It is a directive principle, the laying down of a guideline for the Minister to follow in preparing the Finance Bill. I cannot understand how we could let out a Finance Bill with a section of this kind incorporated into it. The Finance Bill must lay down precise amounts— allowances, rates and so on—and, to me, a section like this would be pointless in a Finance Bill.
The Minister was reluctant about rising to deal with this amendment, but he overcame that reluctance and spent some time talking about things that are not in the amendment. He ended by dealing with the amendment and saying that he just could not see how we could put an amendment like this into the Finance Bill, that it is a directive principle. What are we doing here? We are supposed to be legislating. We are supposed to be laying down directive principles. Is there anything wrong with the Minister accepting the principle that the personal allowance, whatever it may be, is intended to give the named relief to the income taxpayer? If it is to be a relief of £150, the legislation should provide that that amount of relief is given. If the real value of that relief is, in fact, corroded because the Government are unable to maintain the real value of our currency domestically, what is wrong with increasing the allowance so that in each year the real allowance is allowed to the taxpayer? Personal allowances were last dealt with in 1954; since May, 1954, to mid-May of this year the Consumer Price Index has risen from 124 to 200. That is a very dramatic increase in the Consumer Price Index and a corresponding dramatic fall in the value of the allowance then fixed.
The same is true of the various income tax allowances—the £45 I have mentioned, the £394 which the Minister is giving in a special year, as dealt with in section 12. All the various allowances were fixed years ago. They were fixed because it was thought at that time by the Government, the Minister and the Dáil that it was right to give a named cash allowance by way of relief to an income taxpayer. In the years since, that relief has been corroded because of the increase in living costs. What is wrong now in bringing the Minister for Finance, if necessary, up against the fact that in this situation of rising living costs, and so on, there is someone who is always neglected and that is the unfortunate income taxpayer? It does not matter to the Minister for Finance. The more inflation you have in this country, the larger will be his revenue as Minister for Finance. The more you have galloping inflation in this country, the higher the income tax yield will be. The Minister for Finance, as such, never worries about these things because he will balance his Budget without imposing any increased taxation because of a rising income. The toe that will be pinched is the toe of the unfortunate taxpayer who is supposed to be benefiting by a relief which is fixed years back—if I take the £45 that a wife earning an income gets—48 years ago. Today, in 1968, the relief is precisely the same figure. So it is with all the other allowances. I think it is unconscionable. I know the Minister may say: "It is going to cost me money". If inflation affects our community, why should inflation just benefit the Minister for Finance? It is a very good curb on allowing that situation to develop if we have some device whereby these allowances are made real allowances irrespective of falls in money values.
I am not saying that the formula I have suggested here is appropriate. I am sure it is not. The Minister is entitled in making any debating point he wants to make to ask: "How can we put an amendment worded as this is into the Finance Bill?" If the principle were accepted maybe it would mean that an adjustment was automatically necessary from year to year to ensure that allowances would have the same value in each year of assessment as they have when they are first decided upon. I am certain that it is possible to work out something of that kind. In fact, what I am concerned about is the principle of the amendment and have moved it accordingly.
I cannot understand how Deputy O'Higgins can in conscience move this amendment, because, as I see it, it is quite meaningless. This Finance Bill is setting out to regulate the income tax and the allowances for the coming year. The amendment speaks of adjusting personal allowances from year to year. It speaks vaguely: "All personal allowances shall be adjusted from year to year in accordance with Consumer Price Index movements". I just do not see how that could possibly be administered. I think the Revenue Commissioners would be placed in an impossible position if these words were to be allowed into the Bill. Does it mean that all the various personal allowances are to be forever more adjusted in accordance with Consumer Price Index movements? Who is to decide by what amount they are to be adjusted? In fact, I am surprised that the amendment was allowed on the Order Paper at all because it seems to me to be completely devoid of meaning.
Is the amendment withdrawn?
Not on that reception.
Amendment put and declared lost.
NEW SECTION.
I move amendment No. 15:
Before section 13 to insert a new section as follows:—
"Section 134 of the Income Tax Act, 1967, is hereby amended by the addition of the following subsections:—
`(2) An individual who is a widow having the care of any child shall for the purposes of ascertaining the amount of her assessable income for the purposes of income tax be allowed a deduction from her unearned income of a sum equal to one-fourth of that income, but not exceeding in the case of any individual the sum of £500, provided that the deduction under this subsection shall not be greater than the amount by which the deduction, if any, under subsection (1) hereof falls short of £500.
(3) In this section `child' means a child in respect of whom a deduction is allowed under this Part.' "
This is an amendment designed to give a measure of increased relief to a widow having the care of a child. The Minister has made the case that he cannot holus bolus increase all of the allowances, that the cost would be stupendous. I suggest to the Minister that there is a very strong obligation on him to remove from the scheme of allowances the more vexatious anomalies which exist in it, anomalies which create a sense of acute grievance on the part of those who labour under them. This is creative of a very unfavourable atmosphere which is socially undesirable, a feeling that people are badly done by as compared with, say, their neighbours, in respect of certain allowances.
The three amendments which I have put down—amendments Nos. 15, 16 and 17—are all designed to remove this chip from the shoulder of certain aggrieved persons in our community. Amendment No. 15 is, as I have said, for the benefit of the widow having the care of a child, a person for whom we ought to feel the utmost compassion. I hope the Minister is not going to tell me that I am using emotive terms when I speak of compassion in respect of widows and orphaned children.
As Deputies are aware, there are two rates of taxation operated in this country on most income. There is the PAYE rate of 5/3d on earned income up to £2,000 and the standard rate of 7/- thereafter. A pension or a superannuation benefit in the hands of a widow qualifies as earned income and is subject to this lower rate of 5/3d. Therefore, the widow of a man fortunate enough to belong to a superannuation scheme is taxed at 5/3d in the pound. But the self-employed man who endeavours to provide for his widow and children, to ensure that she shall not be a burden on the community, to face up to his obligations to his dependants, commonly takes out what the insurance companies are now terming a family protection policy. It is a modest form of provision to make for one's widow, and many of us here possibly have it. The annuity payable under this policy is taxed at the full standard rate, even if it is only a wretched annuity of £6 or £7. No matter how modest, it is taxed at the 7/- rate, whereas the equivalent superannuation benefit in the hands of the widow of, say, a civil servant or a bank clerk, somebody in gainful employment during his life, is taxed at the lower rate.
This is a vexatious anomaly. I give the Minister full credit for being fully capable of exercising an imaginative and bold approach towards these petty grievances. I would appeal to him to study the scheme of allowances and rid it of all these pettifogging little distinctions. I am going to refer to another of them on a later amendment. This present one is certainly pettifogging. It could be removed at little cost. It is something which ought to have a higher priority in the Minister's scheme of things than relief for surtax payers, as introduced in section 1 of the Bill. That is my complaint against the Minister. His scale of priorities in respect of such reforms as can be effected at modest cost is awry.
I mentioned the widow in receipt of an annuity. There is also the case of the widow who has a modest investment income from, say, Government securities, which she has purchased from the proceeds of an insurance policy which her husband has left her. This relief would largely be for the benefit of the widow of non-superannuated persons outside the scope of employment pension schemes. I have hedged it with the restriction that the widow who qualifies for the relief would have to have the care of a child. If she has no child or if her children are over 16 she would not get this relief. It is a reform I would commend to the Minister and I hope he will see fit to introduce it.
I am very much at a loss to understand this continual harping by Deputy Byrne on the question of my priorities, the allegation I have got them wrong and his continual reference to the alterations made in the surtax rates this year. I realised when I set out to do something about surtax rates that what I did would be open to misinterpretation. I was fully aware of the political risks involved in what I was doing. But I did not think any attack would be made on me by somebody like Deputy Byrne who knows the score in this regard as well as I do, and probably better because he is more in touch with commerce, business and industry now than I am.
The simple fact of the matter is that the situation in regard to surtax here was beginning to operate dangerously to our disadvantage where Irish industry was concerned. I forget the man's name, but some very important man concerned for the future of Irish industry made a speech about this some time ago. He pointed out that unless we did something Irish industry was going to be at a serious disadvantage in regard to getting the type of people it wanted for certain executive and managerial posts. What was done in regard to surtax on this occasion and last year was done mainly at the expense of other surtax payers, surtax payers with unearned income. The amount allocated from the Exchequer, as it were, was a very small part of the whole.
Again, I want to make a comparison between our situation and that in Great Britain. Even after we have made the adjustments in the surtax rates I am proposing in this Bill, the amount payable here by income tax and surtax payers over £5,000—by and large I am taking family circumstances into account—will still be greater than it is in Great Britain. There is a Labour Government in office in Great Britain and we must assume they have as keen a sense of social justice as Deputy Byrne or anybody else.
As I said, I do not think it is fair for Deputy Byrne to keep coming back to this aspect of the Finance Bill. He knows the facts in this regard as well as and probably better than I do. I knew what I was trying to do would be misinterpreted and that there was a sort of political risk inherent in it. But I knew it was the right thing to do and I did it. I did not think the attack would come from somebody like Deputy Byrne.
I do not think this proposal of Deputy Byrne's can be defended. I cannot see how I could be asked to give a concession in regard to unearned income—that is what is involved—to a widow with children which I am not prepared to give correspondingly to a married couple with children.
The circumstances are different.
They are not different. It is unearned income in both cases. The Deputy is suggesting that because a widow has unearned income and has children to look after she should be entitled to certain concessions. Perhaps. But if she is, certainly a married couple with children and unearned income would obviously be entitled ipso facto to the same concessions.
The married couple would also have earned income. The widow would have nothing else.
That does not follow. We are dealing here purely with unearned income and the allowances in regard to it. The Deputy is assuming that the widow has no earned income— she may have—and that the married couple have. That does not follow at all.
Amendment put and declared lost.
NEW SECTION
I move amendment No.16:
Before section 13 to insert a new section as follows:—
"Section 139 (1) of the Income Tax Act, 1967, is hereby amended by the insertion in line 53, after `female person' of `(who need not reside with him)'."
I said a few moments ago that the tax code bristled with vexatious anomalies. This amendment to section 139 deals with one such anomaly. The section provides relief to a widow or widower of £100 to enable him or her to employ a housekeeper to look after the motherless or fatherless children. For some peculiar reason which I cannot fathom —it is irrational—the housekeeper must be resident with the taxpayer in order to qualify for this relief. The Minister knows that only the very wealthy nowadays can afford resident domestic help and even they find it very difficult to find resident domestics.
I put down the amendment because last week I was telephoned by a friend whose wife died over a year ago and left him with the care of six small children. Completing his income tax return a few weeks ago, he claimed this housekeeping allowance in respect of his domestic help who comes in every day while he is out at work, but he is not entitled to this housekeeper allowance because case law, not section 139, stipulates that the housekeeper employed must be resident.
I do not wish to bore the House with details of this pettifogging complaint. It is one which should not be there. It should be removed and, by accepting this amendment, the Minister can make this section a little more equitable.
In spite of the best efforts of Deputy O'Higgins and his colleagues to put me into an unreceptive mood by pettifogging and unjustified criticisms, I think there is something in the point the Deputy is making. It would be difficult to do anything about it in this Finance Bill as by now the various PAYE allowances and so on have been made up and sent out, but I would be prepared to give an undertaking to look at this very sympathetically indeed in connection with next year's Budget and Finance Bill.
We are making progress.
Deputy Byrne is making progress.
I am much obliged to the Minister.
Amendment, by leave, withdrawn.
NEW SECTION.
I move amendment No. 17:
Before section 13 to insert a new section as follows:—
"Section 141 (1) of the Income Tax Act, 1967, is hereby amended by the insertion in line 42 after `establishment' of `or is incapacitated by infirmity from maintaining himself'."
This is another such anomaly. Deputy Fitzpatrick spoke of it on the Second Stage and it is indeed an anomaly of which I have heard several Deputies complain from time to time. It relates to the position of the mentally defective or otherwise infirm child. While such a person remains a child, up to the age of 16, his parents qualify for an allowance of £150 a year. In passing, at this stage in respect of child allowances, it is right that we should acknowledge that what we have said here this evening about the allowances not having been increased since 1954 is not true of the child allowance: it has been increased over the years. It was increased last year and I think in the previous year. It now stands at £150, but as regards the infirm child, once such a child passes the age of 16, he ceases to qualify as a child and there is only available for him the dependent relative allowance, the much lesser amount of £60.
The Minister will readily accept that as the infirm child grows older, the cost of his upkeep is greater on his parents, but rather than consider proposing an increase in the dependent relative allowance which covers one's mother-in-law and one's parents and quite a wide field, I felt it would be more acceptable to the Minister if I proposed that the infirm child should continue to be treated as a child as long as he remains infirm and solely dependent on his parents. As the Minister knows, if he has an income of his own, he will immediately cease to qualify for the allowance. I commend this to the Minister.
Again, in spite of the unpardonable behaviour of certain members of the Opposition this evening, I am disposed to look very favourably on this. Indeed, I think there is probably a stronger case for this than for the other amendment which the Deputy spoke about a few moments ago. Unfortunately, again it is not possible to do anything this year but I give an undertaking to look very favourably at it in connection with next year's Budget. Perhaps I could go a little further in this connection and guarantee that unless something unforeseen turns up to prevent me doing so, I shall make this change.
We are making further progress.
Amendment, by leave, withdrawn.
Question proposed: "That section 13 stand part of the Bill".
I raised this matter on Second Reading when I asked the Minister for information which I did not really get. In fact, the information I got came from Deputy Booth. I take section 13 to mean that originally it was unnecessary for a bank manager to disclose funds held on deposit by a client, provided they did not produce an income of more than £50 per annum. I am not quite clear as to how long that sum has been fixed but I think that about a year ago the amount payable on a deposit in a bank was about 1½ per cent which, according to a rough calculation, means that a client could have up to £2,500 on deposit without the manager having to disclose that fact to the Revenue authorities.
The bank rate at present on deposits is 4½ per cent and I estimate that on this section 13, where the sum is being changed from £50 to £70 per year, a depositor could now have about £1,600 on deposit without the manager having to disclose such fact to the Revenue Commissioners. Before I go any further than that I should like if the Minister would clarify the position for me, and then I shall see if I have anything further to say on the subject.
What we are concerned with here is the obligation on a bank to make a return of deposit interest paid. The lower limit has been at £50 since 1965. In effect, if the deposit interest payable to any depositor at the moment is less than £50, the bank need not make any return of that deposit interest to the Revenue Commissioners. Last year we increased the tax-free limit from £50 to £70; in other words up to last year if the person got bank interest to the extent of £50, he did not have to pay any tax on that £50. Last year we increased that limit to £70 so that now anybody who gets bank interest of £70 or less is free of tax on that account. What we are doing here is bringing two things into line: (a) the first £70 of bank interest will not attract tax; and (b) the manager of a bank will not have to make a return on any amount of deposit interest which is less than £70 in the year. The background to that is that the £50 was brought in at a time when the Post Office were paying 2½ per cent and was equivalent to a deposit of £2,000 at 2½ per cent. We increased the Post Office Savings Bank interest to 3½ per cent, which on a deposit of £2,000 was equivalent to £70, and as a consequence the £50 was increased to £70 for that purpose. Now we are increasing the £50 to £70 for the other purpose as well.
The rate payable on bank deposits is 4¼ per cent. In the reply which he has just given to me the Minister has co-related the increase with the percentage payable by the Post Office, who give 3½ per cent. Would he not consider going a little further and bringing the sum into line with 4¼ per cent, which would be about £100 a year?
I might be made a cod of, because the bank interest may come down tomorrow morning. Bank rates have been fluctuating up and down fairly rapidly in recent times.
The Minister will appreciate that anything that goes up these days, including taxation, is not likely to come down. It would be a very safe bet for him to make it £100. I respectfully submit to the Minister it would be a very fair thing to do. It would achieve very worthy objects.
May I ask the Deputy, through the Chair, if he is asking me to raise the tax-free limit or the returnable limit?
To change from £70 a year to £100 a year.
Which one?
Both of them, the interest rate and the return. The bank manager should not have to disclose the amount up to a rate of income of £100 a year at 4¼ per cent for such time, if the Minister wishes it so, as the bank rate remains fixed. That will achieve three objects: first, it will increase the amount of deposits, which the Minister will accept as desirable; secondly, it will free the bank from the obligation of having to disclose the investments of its clients up to that sum, at 4¼ per cent, and returning an income of £100 a year. Do I make myself clear? It is only a small thing I am asking. It will benefit the national economy which all of us on both sides of the House have in view.
If I were to increase the tax-free exemption from £70 to £100, that would probably cost a great deal of money. I am not sure how much.
Very little.
It would be the first £70 of all interest, and it would be a further £30 tax-free.
Think of the return the Minister would get in investment in the Irish banks for the execution of desirable projects.
I think the rate of interest payable on deposits is the determining factor in attracting deposits. This would be only a marginal thing.
I am suggesting the Minister should make that concession subject to the bank rate remaining as it is now.
I cannot do it.
They will always say no. They have never been known to say yes.
I was simply being advised—I did not bother to make the point to the Deputy but now that he has pinpointed it, I will—that the corresponding figure in Britain is £15. We are at £70 here, and we are not doing too badly.
Think of all the money they have in Britain compared with what we have here. We cannot base everything on what the British do.
Question put and agreed to.
SECTION 14.
I move amendment No. 18:
In page 11, line 7, after "research" to insert "or support any scheme of scholarships, grants or other forms of assistance to persons undertaking research provided such schemes are offered for public competition".
This amendment is intended to simplify to some extent the purpose of section 14. Section 14 is amending section 244 of the Income Tax Act of 1967. It makes an allowance for scientific research, and while the Minister's proposal is to be welcomed and would have our support I wish to amend it. It reads as follows:
..."(2A) Where, on or after the 6th day of April, 1968, a person carrying on a trade—
(a) incurs non-capital expenditure on scientific research or pays any sum to a body or university referred to in subsection (2) (b) in order that the body or university may undertake scientific research.
I suggest that the words in my amendment above be added. In relation to the reliefs allowed under the income tax code, if the idea of research, not merely confined to universities but research which can be undertaken outside the universities is the proper kind of activity to be encouraged, and if it is embarked upon, it should qualify for the same kind of allowances as are provided in section 244 in respect of scientific research.
With all due respect I think the Deputy is under a misconception here. My proposals are concerned with scientific research for good reasons, that is, scientific research related to economic development that we wish to encourage. The Deputy's amendment speaks of research without qualification, so any type of research would be covered by his amendment.
Scientific research.
The Deputy means scientific research? I want to point out that the Deputy's amendment is not really necessary if it is scientific research. The effect of my proposals would make it allowable anyway. It does not matter in what shape or form it is extended. The original section 244 of the Income Tax Act was confined in its scope in that the research had to be related to the trade of the person making the payment. That limitation is being abolished.
It is still confined to a body or a university.
No, any payment which is made to a body to enable it to carry on scientific research will rank as a business expense.
What I had in mind was that if a person in relation to scientific research seeks to encourage research even outside a body or a university provided it is scientific research it should be covered. I agree that the words "scientific research" should be in there but I think that would follow from the addition to the section. What I am concerned with is that it should not be confined merely to promoting scientific research in a body or a university. You could have encouragement by scholarships or otherwise of such research even outside the university.
That would be covered.
I do not know how.
The intention is——
Would the Minister look at it between now and Report Stage?
My advice is that my interpretation is the right one, that there is no restriction. The Bill speaks of a person carrying on a trade incurring non-capital expenditure on scientific research or paying any sum to a body or university. It could be paid to any body.
That does not mean the promotion of individual research.
I think that would be covered. If it is not, we will make it clear that it is covered.
Perhaps the Minister would look at it between now and Report Stage.
I will do that.
Amendment, by leave, withdrawn.
Section 14 agreed to.
SECTION 15.
I move amendment No. 19:—
In page 11, line 41, after "appeal" to add "and the determination shall be subject to a right of appeal to the Circuit Court".
The purpose of this amendment is to ventilate the same point of view as I raised earlier. In this section provision is made with regard to the Appeal Commissioners giving their decisions. They will proceed to determine an appeal as laid down in the section. I am anxious about the right of appeal to the circuit court. I gathered from what the Minister said earlier that that is so.
We are concerned here to make sure that a person has the right to go to the circuit court. Some doubt might arise where a case goes before the Appeal Commissioners and where, for instance, no evidence was adduced on behalf of the appellant and the assessment was allowed to stand. There was some suggestion that that was not a determination and if it was not a determination it could not go to the circuit court. What we are doing here is saying that there is ipso facto the right to go to the circuit court.
It is in the White Paper.
Amendment, by leave, withdrawn.
Section 15 agreed to.
Sections 16 and 17 agreed to.
SECTION 18.
Question proposed: "That section 18 stand part of the Bill".
As we are not going to have a value added tax for the moment we can leave it so.
Question put and agreed to.
Sections 19 to 24, inclusive, agreed to.
SECTION 25.
Amendment No. 21 seems to be an alternative to amendment No. 20 so perhaps they could be taken together.
I move amendment No. 20:
In subsection (3), page 18, lines 9 and 10, to delete "the passing of this Act" and substitute "the date of the Budget".
I wanted to insert "the date of the Budget" and Deputy Tully suggests inserting the exact date of the Budget. Perhaps Deputy Tully's amendment covers it. I will give way to Deputy Tully.
Amendment, by leave, withdrawn.
I move amendment No. 21:
In subsection (3), page 18, lines 9 and 10, to delete "the passing of this Act" and substitute "8th May, 1968".
The amendment is pretty clear. I understand that in previous legislation of this sort the date of the Budget was, in fact, the date of operation. For some reason the Minister includes in the section "after the passing of this Act". It may appear to be a small thing but there are a small number of people I know — and all over the country there must be a relatively small number of people — who would be affected by this. I would ask the Minister to accept this amendment.
It was done in the 1966 Act.
I do not want to be difficult about this but the invariable practice has been that concessions granted become operative only from the date of the passing of the Act. There has been one exception only and it involved a case where it was realised hardship was being inflicted and, therefore, the concession was made retrospective. Otherwise, the rule has always been that the date of the passing of the Act was the operative date. There is no difference here, this being a concession of the type with which we normally deal. For instance, nobody could say: "You announced this in your Budget speech and, therefore, I decided to die immediately afterwards." That situation could not arise. People might say: "This was announced in your Budget speech and, therefore, I anticipated such and such a situation." In that case there would be some justification for making the provision operative from the date of the Budget but that does not arise in this instance. The invariable practice——
Not invariable——
——has been to make concessions operative, where they involve estate duties, from the date of the passing of the Act, and I am not inclined to depart from that on this occasion.
It has not been the invariable practice. The Minister knows the 1966 Act in which the concession was from the date of the Budget—there was a hardship case involved. I am sure the Minister would not ask me to mention the hardship case which brought this to my notice. If he needs it I will give it to him afterwards. Very grave hardship will be imposed if this is not amended to make it retrospective to the date of the Budget. In addition, we must recall that the Minister said that somebody could not say to him that because the matter was announced in the Budget speech the person had acted accordingly. The main feature of this would be against the Minister. It would be the other way round. For that reason I ask the Minister to have another look at it. There was good reason for putting down the amendment and because the cost to the State would be very small, the Minister should reconsider it. Throughout the afternoon he has been making the argument that to do certain things would cost the State too much and I am hoisting him on his own petard in this matter. This would cost very little and I ask him to have another look at it. If he prefers to bring in an amendment of his own, worded in a different way, I am prepared to withdraw this amendment, but there is no good reason why the principle should not be accepted.
I cannot refuse to look at it again, anyway.
Without commitment?
I am not entirely a free agent here. The Deputy knows as well as I that if you go back to a certain date there will be hardship cases two days before that date. I have a cases in my constituency where I would have to go back a year to cover it. I would be asked if I could go back to April, 1967.
If the Minister wishes to do that I will not object.
I know the Deputy would not. No matter which date you hit on there will be hardship cases before that. As I have said, with the one exception, the practice has been invariably to make the concession operative from the date of the passing of the Bill.
Perhaps if the Minister sleeps on it——
Do not annoy me on the next occasion.
Amendment, by leave, withdrawn.
Section 25 agreed to.
NEW SECTION.
Mr. Byrne
I move amendment No. 22:
Before section 26, but in Part III, to insert a new section as follows:—
"Section 10 of the Finance Act, 1894, as subsequently amended is hereby repealed, and in lieu thereof the following provisions shall take effect:
`(1) Any person aggrieved by a determination of the Revenue Commissioners regarding the value of an estate, or of any part of an estate, for death duty purposes, or regarding the rate of tax charged on any such estate or part of an estate, as the case may be, shall be entitled to appeal to the Appeal Commissioners appointed under section 156 (1) of the Income Tax Act, 1967, on giving notice within twenty-one days of issue of a determination by the Revenue Commissioners in the matter.
(2) The Appeal Commissioners shall from time to time appoint times and places for the hearing of such appeals.
(3) The provisions of sections 416 to 419 of the Income Tax Act, 1967, shall, so far as appropriate, apply to all such appeals.
(4) Any person who is aggrieved by a determination of the Appeal Commissioners in any such appeal may, on giving notice in writing to the Revenue Commissioners within ten days after such determination, require that his appeal shall be reheard by the Circuit Judge in whose circuit the estate of the deceased person is situate.
(5) The said Judge shall with all convenient speed rehear and determine the appeal, and his determination thereon shall be final and conclusive, subject to the right of the appellant or the Revenue Commissioners to have a case stated on any point of law for the opinion of the High Court.' "
This deals with appeals provision in cases where there are disputes as to the value of an estate for purposes of death duty—disputes between the personal representatives of the deceased and the Revenue Commissioners. The present appeal provisions are most inadequate and as will be seen from the amendment they hark back to the British Finance Act of 1894. Subsequent amendments to it were also British amendments of 1896, 1909 and 1910. There has been nothing since then.
The position is that where the value of the estate does not exceed £10,000 appeals in dispute as to value lie only to the High Court. Where the total value is less than £10,000, the appeal is to the circuit court. As a result of the impact of inflation, the cases in which disputes arise are usually of a substantially greater total value than £10,000. Appeal to the High Court is cumbersome and expensive and there is great need for less formidable and less expensive forms of appeal for members of the public. The type of dispute I have in mind is one with which the Minister is familiar—the value of shares in unquoted companies, the public house at the corner being a small limited company.
In my view and in the view of others who know about this, there has been a considerable stiffening in the attitude of the Estate Duty Office on valuation matters in recent years and I regret to have to say it, but I must, I believe the cumbersomeness and the expense of the appeal machinery is being exploited by the Estate Duty Office to the disadvantage of members of the public who may be affected. The Estate Duty Office go through the motions of discussing the pros and cons of cases, then the papers are folded up and the people concerned are told: "Take it or leave it. You can take it to the High Court but it will take a long time and it will cost a hell of a lot of money".
The purpose of the amendment is to give a right of appeal in the first instance to the Appeal Commissioners but it does not suggest that we take from the ultimate right of appeal to the courts. There is a cast iron case for this amendment. The valuation limit under which one could go through the less expensive and less cumbersome form of appeal to the circuit court is £10,000
This limit of £10,000 was set in 1894 and—again this is relevant to all that has been said here on previous amendments in the past few hours— yardsticks, measures of cash value which were set years ago ought to have kept pace with inflation. Clearly, the intention of the British Chancellor of the Exchequer, when he brought in the Act of 1894, was that in the really big estates there should be the right of informal, easy appeal to the lower court. I am suggesting that this appeal should be to the Appeal Commissioners and that if either side is dissatisfied with this there should be appeal from that to the circuit court and thereafter, on a point of law, to the High Court if necessary but only on a case stated on a point of law. My argument is reinforced by the fact that the Institute of Chartered Accountants, which is my professional body and the Minister's has urged this particular change and it is one which I commend to the Minister.
This is superficially attractive but I am not sure that it would achieve what the Deputy wants. The criticism which is made of the Estate Duty Office is that it is slow, that it takes a long time to process cases.
My criticism is that they are much too rigid, quoting the precedent of stock exchange yields on the London Stock Exchange when one is concerned with the valuation of a twopence halfpenny concern in the Irish provinces, an academic approach which is far removed from reality.
I do not know about that but at the moment one of the criticisms which I hear about them anyway is that they take a long time to deal with cases. Deputy Sweetman is often critical of the Office in that respect not indeed of the individual officers but just of the Office and of the system.
It seems to me that if we were to insert this additional cog into the machine it would only have the result of slowing things up even more. At the moment the Office exercises a certain discretion on the basis of their experience and on the basis of precedents. If the Office had to operate on the basis that everything was going to go to Appeal Commissioners it seems to me that a great deal of the discretion which they exercise would be removed and they would have to look on things in much greater detail and be absolutely certain that the law is being adhered to to the nth degree and that in fact there would be greater delay and perhaps less flexibility than there is at the moment in dealing with cases. The situation at the moment is that anybody who really feels aggrieve can go to court.
If they have the money.
It is very costly. It is the High Court, not the circuit court.
The Minister for Justice has some proposals.
I really do not think that the insertion of a new factor such as Appeals Commissioners into the situation would help. It certainly would not help to get things done with greater expedition. It would only serve to accentuate what delays there are at present and indeed I feel that it probably would have the opposite effect to that which Deputy Byrne seeks to achieve namely if the officers were operating on the basis that there was an Appeal Commission there to which practically every case would be appealed they would probably be much more rigid and less flexible than they are at present. We shall think about it.
I hasten to assure the Minister that my concern is not with regard to the time factor at all. Deputy Sweetman, of course, knows far more about the delays than I do. The Minister will appreciate that I am at one remove from the Estate Duty Office in matters of share valuations but it is true that as a result of the impact of inflation the shop on the corner is now, if it is a limited company, as it is quite likely to be, involved in this valuation exercise and I believe that there is an academic approach to valuation matters. One is quoted price earnings, ratios and sophisticated statistics of what happens on the London Stock Exchange, what yields are available on the London Stock Exchange and gigantic companies when one is concerned about the valuation of a two-pence halfpenny business in rural Ireland. This is a situation which is far removed from reality.
It is very desirable that where personal representatives in any estate are aggrieved there should be, as was envisaged by the 1894 Act, an informal and inexpensive appeal machinery available to them. If nothing else I would suggest to the Minister that the ceiling of £10,000 above which one goes to the High Court rather than the circuit court laid down in the 1894 Act ought now be jacked up to £50,000. Such a provision would go a long way towards meeting my point in the matter. I would ask the Minister to have another look at it.
I shall do that.
I am very much obliged.
Amendment, by leave, withdrawn.
NEW SECTION.
I move amendment No. 23:
Before section 26, but in Part III, to insert a new section as follows:—
"Notwithstanding anything contained in any other enactment the first £7,500 of any estate shall be exempt from estate duty where it is shown that at least 50 per cent of the assets of such estate are invested in Ireland."
This amendment is very much on the same lines as an amendment I moved 12 months ago. I believe and I have always believed in the abolition of estate duty. I know it would be only wishful thinking on my part to bring in an amendment suggesting the total abolition of estate duty with all the benefits that would accrue from it because it would not have any chance of acceptance whatsoever. Last year I introduced an amendment something on these lines. I have extended the scope of it somewhat this year in the somewhat vague hope that the Minister might see his way to accept it, or at least accept the principle in this particular amendment. I have always felt that any reliefs we give in this country, any of the benefits we confer on taxpayers ought to be made as equitable as possible. I can never accept the fact in regard to the rate that is payable in income tax, if somebody is a few pounds over that rate, that he has to pay the full amount whereas anyone who comes within the scope of the particular relief is entirely free. Therefore, any sum which is remitted as estate duty, no matter what that amount is, to my mind is not equitable unless it is deducted from the whole estate. That is the kernel of this amendment and the principle I want to establish here.
I have never had from any Minister for Finance, although I have mentioned this in the lifetime of several of them, a number of different members of the Fianna Fáil Party who have been in Government over recent years, a satisfactory reply from any one of them as to why this sum should not be deducted from the overall estate. I have had long explanations of the different reliefs given under different sections of the Act but there has been no real explanation as to why what I suggest should not be adopted. I said I had altered my amendment slightly so as to ensure it would have the widest coverage possible. My fundamental reason for introducing this amendment, apart from the relief that it gives to the taxpayer, is that I believe that any fundamental relief we give in relation to estate duty will ensure an inflow of capital into this country.
I believe that in any fair sized industrial town in England the amount of income tax and surtax paid would very nearly reach the total amount paid in such sums into the revenue of this country. When we realise we live alongside what was once a rich industrial nation—it still has considerable financial resources at its disposal and considerable financial investment and also an inflow of capital—our aim and object should be to induce people to live here and spend the latter part of their days here and to invest money in this country from which the State would receive a considerable return. It was mentioned the other day in reply to a Parliamentary question that the total revenue in estate duty in this country was £6 million. The Minister knows as well as I do that is a very fluctuating figure.
It is fairly constant.
It could fluctuate quite a lot. I do not want to mention anybody who has a lot of money who is likely to die but it could vary from year to year. Even if it reaches £6 million we spend enormous sums of money trying to induce industrialists to come in and set up industries here. The other day the Minister's colleague, the Minister for Industry and Commerce, Deputy Colley, brought in legislation increasing the amount from £30 million to £40 million. When compared with that, £6 million is not very big. If the Minister were to accept my amendment, it would induce people to come here to live, to build houses which they would have to do because there are no houses big enough for them to live in, give employment and as such give the Minister a big return in income tax. Also the majority of the people I have in mind, who are the wealthier type of people, would have estates far in excess of £7,500 a year, which is the modest sum I mentioned in my amendment.
I submit to the Minister that he would be taking a courageous step to accept my amendment. I submit further that the covering clause I inserted, half of the estate, subject to this amount being limited from the total estate, should be invested in this country. If the Minister pauses to think for a moment, he will see that I am offering him a gift horse for not alone have I said in my amendment that it should be invested in this State but in Ireland. For the purpose of my amendment I am suggesting that we should treat this nation as one. If this 50 per cent of the investment was in the State as a whole, in the Six Counties as well as the 26 Counties or, as in those days I understand the Government prefer to call it, Northern Ireland, the Minister will see that those benefits will accrue to us here.
Estate duty has not been a success in any country. In fact, the tendency is, although I have been told to the contrary by different Ministers here, to do away with it. It has not achieved the object for which it was intended. Estate duty is a confiscation of capital and nothing else. In addition to that, it inflicts tremendous hardship and it inflicts more hardship on the middle-age group and particularly on the middle-income group than any other section of society. Some years ago very few people were involved in estate duty. It was not popular to talk about it. There were no voting capabilities in regard to it but now practically everybody in this country who is thrifty enough to save money, who has a small estate, a small shop or a well-stocked farm comes within the ambit of this estate duty. I want to point out to the Minister, if he does not know it already, and, perhaps, being a city Deputy he would not realise it as much as a rural Deputy who has to deal with a more mixed fraternity than many of the Deputies in the city, and perhaps where people are not as well off and have to struggle to make ends meet, that the people in rural Ireland are very much aware of this hardship.
I have introduced this amendment for three years running. In fact, I put it down for four years and I think I am more or less flogging a lone horse on my own. The Minister would be surprised at the same time at the number of people who have written to me and thanked me for what I am trying to do, which they believe is right not alone in the interest of the individual but of the State as a whole. They have expressed considerable surprise that Ministers for Finance have not acceded to this very modest request I am making. I would be quite happy to settle with the Minister on this amendment if he would agree to deduct a lesser sum, say £5,000, which is the sum which is free of income tax now, and surely by doing that he would only be doing something equitable and just. Why should a person whose estate is £5,100 have to pay a rate of estate duty where somebody with £4,998 pays nothing? In all seriousness I ask the Minister to accept this amendment, to give it favourable consideration and create a new line of thought and advance in our estate duty laws in this country.
I shudder to think what Deputy Byrne would say about my priorities if I were to make any substantial inroads in the revenue available to me in order to give an across the board concession, because the tax concession Deputy Esmonde is now advocating would of course apply to all estates.
Exactly, as all legislation applies to everybody.
It would apply to estates of £500,000, £100,000, and so on. I do not think that Deputy Esmonde would get Deputy Byrne at least to agree with him. There are several different points of view I could put forward in reply to the case made by Deputy Esmonde. One point I want to mention is that the condition that 50 per cent of the estates should be invested in Ireland is not relevant. There are very few estates liable to duty in which less than 50 per cent of the assets are not situated here. In the financial year 1966-67, at least £27 million of the gross total of £34 million represented property which was situated in this country.
I do not want to interrupt the Minister but I am suggesting that this measure will bring in new estates.
The concession the Deputy proposes would apply to everybody. I want to suggest that we are going about this in the right way in what I am doing. We are dealing with cases where hardship would arise in the operation of the estate duty code. That is, where a widow and children are left we are making substantial concessions in their case. That is the way to tackle this problem. If Deputies can point out that the operation of the code is causing hardship, then I think we should try to deal with the particular cases of hardship.
I suggest that the only real case of hardship that arises under the code is where a man dies leaving a widow and children, and where perhaps the estate duty provisions cut too severely into the estate he leaves behind, to the detriment of his widow and children. We are making fairly generous provision on this occasion to deal with that type of case. The across the board type of exemption which the Deputy proposes would be very expensive and would not really be justified because there are quite a few estates on which estate duty could be levied with no hardship to anybody. The whole concept of estate duty, as I understand it, when it was introduced first was that an estate was as it were, looked at as if it were in a vacuum. It does not belong to anybody. The person to whom it was left does not own it yet. You levy tax on it because it does not belong to anybody. That is the fairest type of tax. There are philosophical arguments into which I do not want to go but what the Deputy suggests would be very expensive and would not be channelling alleviation into the sort of situation he would wish.
Could the Minister give me any idea what this very limited, moderate proposal which I suggest would cost administratively? There is no difficulty there.
Looking at it one way, it would cost £1 million. Looking at it another way, it would cost a great deal more.
Looking at it administratively, it would cost nothing at all. The State approves the full amount and you just deduct the amount. Why should it cost all that?
It would cost £1 million in estate duty.
I think the Minister could afford to consider the loss of £1 million in the light of the benefits that would accrue from it.
We cannot afford to lose £1,000.
I agree it is something new and would the Minister not agree that it would bring capital into the country?
If you can persuade Deputy Byrne that this is the just and right thing to do, I will have another look at it.
I am completely at sea in the Minister's arguments.
I could keep the Minister here all night but I will not. Perhaps I will sow the germ of an idea in his mind or that of his successor, whoever he may be.
Amendment put and declared lost.
SECTION 26.
Amendment No. 24.
Perhaps I might shortcircuit this. Perhaps the Deputy is overlooking the fact that in section 26 we do define corporation tax as meaning the tax in Northern Ireland and Great Britain and it is hardly necessary to put in "British".
We have our corporation tax here.
We have corporation profits tax. We have not yet corporation tax.
I agree.
Amendment No. 24 not moved.
Amendments Nos. 25 and 27 can be taken together. Amendment No. 27 is consequential on amendment No. 25.
I move amendment No. 25:
In subsection (2), page 18, line 44, to delete "cost" and substitute "value".
We are dealing with the cost of Irish securities throughout the accounting period. You are dealing with something static and discernable —dealing with Irish securities throughout the accounting period. Does this mean that you carry out an evaluation on each day throughout the period to establish that on each day throughout the period the value of the Irish securities would not be less than 15 per cent?
Not necessarily.
How is it applied; what are the mechanics?
Frankly, I cannot anticipate what the detailed requirements of the inspector would be, but the concept is clear.
We should be concerned with the value and not with the cost.
I think that is the right concept—the value, not the cost. The cost is historical.
The value changes from day to day. This might be cumbersome, to say the least of it.
Amendment put and agreed to.
The decision on amendment No. 25 involves amendment No. 27, also, which is consequential.
I move amendment No. 26:
In subsection (2), page 18, line 45, to delete "fifteen per cent" and insert "thirty per cent".
Thirty per cent would not work. They would not have enough scope.
Amendment, by leave, withdrawn.
I move amendment No. 27:
In subsection (2), page 18, line 46, to delete "cost" and substitute "value".
This amendment stands also in the name of Deputy T.F. O'Higgins.
Amendment put and agreed to.
I move amendment No. 28:
In page 19, lines 11 to 13, to delete subparagraphs (iv) and to substitute the following subparagraph:
"(iv) The value of the securities quoted on a recognised stock exchange which were held by the investment trust company was not less than eighty-five per cent of the value of the securities held by the investment trust company,".
What we are now proposing is that the value of the unquoted securities should not exceed 15 per cent of the total value. Deputies will notice that there is a correlation here between this 15 per cent and the 15 per cent in the other conditions. The main point here is that I understand there are some companies which are not quoted and which investment trust companies would like to help along by investing in them with a view to eventually floating them and having them quoted on the Stock Exchange. The original figure of 95 per cent for quoted securities would undoubtedly be restrictive and would limit the scope for these trusts to help along companies not quoted on the Stock Exchange. We have been urged very strongly to make it 85 per cent, as we are now proposing.
It makes it very flexible and gives more room for operating.
Yes.
Amendment put and agreed to.
I move amendment No. 29:
In page 19, lines 15 and 16, to delete "the accounting period" and substitute "any accounting period ending on or after the passing of this Act".
I think this is a technical point, really. As it is worded, it could give rise to difficulties in certain cases — exactly the type of difficulty we are aiming to avoid. Under the amendment, the requirement in this paragraph will apply only in respect of accounting periods ending on or after the passing of the Act.
I should have thought that that would be so, anyway.
I am advised otherwise.
Amendment put and agreed to.
Amendments Nos. 30, 31 and 32 are related and, by agreement, may be taken together.
I move amendment No. 30:
To delete subsection (3).
The above amendment is moved on behalf of Deputy Cosgrave. My amendment, No. 31, reads as follows:
In subsection (3), page 19, line 18, to delete "Minister for Finance" and substitute "Revenue Commissioners".
I think the idea behind Deputy Cosgrave's amendment and my amendment is the same. As the section stands at the moment, it appears to give very arbitrary powers to the Minister. It enables him to authorise relief in respect of any period provided by the section notwithstanding that the conditions in subsection (2) are not observed. There may be a reason for giving such a power but it seems to me that, if that power is put into the Bill, it should not be exercised by the Minister. If it is exercised at all, it should be exercised by the Revenue Commissioners. That is the purpose of the amendment.
I think I am a much more proper person than the Revenue Commissioners.
I am very anxious to preserve the Minister from unbridled criticism.
This relief is something very new. We are trying to meet a certain situation which has arisen and which is causing difficulty. We are prescribing fairly rigid conditions. In fact, already, as Deputies can see, we have had to change some of the conditions because it was pointed out by persons with practical experience and knowledge that the conditions we prescribed were unworkable. The very stiff conditions we are laying down would, I am afraid, make the relief unworkable in marginal cases. Some particular company here may fail marginally to meet some of the requirements we are laying down. In that situation, it seemed desirable to us, as the relief was new and experimental, that the Minister should have the discretion, where some particular organisation just fails to meet some of the conditions, to authorise the relief. I do recognise that, as the Bill is drafted, this might raise a suspicion that the Minister for Finance might authorise the relief without anybody knowing anything about it. My solution to the dilemma is in amendment No. 32 which reads as follows:
In page 19, subsection (3), line 21, to add to the subsection "and notification of any authorisation under this subsection shall be published in Iris Oifigiúil as soon as may be after it is given”.
I am proposing that the matter be left as it is—that the Minister have this discretion and that, if he exercises it, he must publish the fact in Iris Oifigiúil so that the whole world can see what has happened. I think that might meet the difficulty which both Deputy O'Higgins and Deputy Cosgrave foresee.
This amendment is undoubtedly an improvement on the subsection as it was but the principle is still the same. Quite frankly, I think it is undesirable, in a matter of this kind dealt with in the Finance Act — as it will be — relating to corporation profits tax, that statutory conditions, in effect, may be waived by the Minister himself. Even accepting the Minister's amendment, even carrying an obligation that the Minister will publish in Iris Oifigiúil that he does so, it is not desirable, in matters of this kind, which may involve a very considerable amount of money, that that should be at the sole and unfettered discretion of the Minister which, in effect, means waiving statutory conditions. I agree with the point the Minister makes that this is experimental. I can understand that and for that reason, I can conceive a situation in which the Revenue Commissioners are removed from the political arena and where they might be allowed, in the circumstances, to act within the policy set out in the section.
The Deputy knows that his colleagues are very adamant from time to time that the Revenue Commissioners be given no discretion. That is a theme I have heard very often from Deputies on the benches opposite. At least I am politically amenable.
The Minister says this is an experimental section.
Progress reported; Committee to sit again.
The Dáil adjourned at 10.30 p.m. until 3 p.m. on Wednesday, 3rd July, 1968.