asked the Minister for Finance if he will make a statement on the recent announcement by the Government that the tax concession to the mining industry will not be honoured, with particular reference to its timing.
Ceisteanna—Questions. Oral Answers. - Mining Industry Tax Concession.
76.
In 1971 the then Government set up an inter-departmental committee to examine taxation arrangements relating to mining of nonbedded minerals. This committee carried out a comprehensive study of fiscal policies affecting mining operations in different countries. As I mentioned in my budget statement, that committee reported last May. In the light of the study and the present state of development reached by the mining industry in Ireland, the Government were satisfied that the mining industry should make a suitable and equitable tax contribution towards the ever increasing cost of promoting national development. A revision of the present taxation arrangements is clearly justified at this stage. The Government have, accordingly, decided to replace the 20-year tax exemption with an alternative system of tax concessions. The changes will be made effective from the earliest feasible date.
It is the intention of the Government that the new tax system will be generally comparable with the mining taxation systems in other countries and that, in addition, the system will be specifically designed to meet the needs of the Irish mining industry. I may add that any group currently involved in developing mineral resources in Ireland was operating here prior to the tax exemption granted in the 1967 budget.
There were a number of alternatives open to the Minister in relation to this. Under no circumstances do I suggest that the mining industry should not pay its fair share to the Exchequer and to the community now that it is profitable. Why did the Minister decide deliberately to reverse the policy of the previous Government in this matter which, I understand, in European and American papers has been the subject of very critical comment and lack of confidence in the stability of Irish Government promises?
The first comment printed on the 1967 concession was contained in a mining journal published in Toronto which said that it was so generous or exceptional that it was unreasonable to expect that it would last 20 years. Time has proved that anticipation to be correct. As I emphasised, this review was commenced by the previous administration in 1971 so that clearly, even then, the previous administration was conscious that the legislation of 1967 could not be warranted in the circumstances of 1971. If that were so in 1971 it is certainly true of 1973.
In view of the reference made by the Minister to a comment in a mining magazine of some kind, is he aware of any comment anywhere to the effect that one could expect an Irish Government to renege on a promise solemnly made by both Houses of the Oireachtas?
As I mentioned in the course of my reply, there is no mining group operating in Ireland which acted on foot of the promise of 1967 because they were all here before 1967. Therefore, as Deputy Colley will appreciate, as no consideration has been given, there is no question of anybody having been let down.
The Minister is not correct factually. He will hear more about this subject from us in a more suitable debate.
Could the Minister say whether the Government informed any of the mining interests before this sudden announcement was made, or had any discussion with them?
Discussions are being held with the mining interests to discover the most suitable régime to replace the existing concessions.
My question was: did the Government have any consultations with any of the mining interests before this sudden announcement was made?
The consultations which the Deputy has in mind would only have stimulated undesirable speculation. It was in the interests of the mining industry that the announcement should have been made and, when we made it, we gave undertakings to have full discussions with the mining interests and we are at present engaged in those useful and, I must say, harmonious discussions.
Why was this announcement made——
We cannot have a debate on this matter. There will be ample time to debate it. Question No. 77.
——when the Minister for Industry and Commerce was opening an industrial development office in Toronto, the centre of the mining world?
Apart from any other implications of this action by the Government, does the Minister think that it represented good government to make this rather starting announcement of the cessation of a particular taxation concession without, at the same time, being in a position to announce what new provisions will take its place?
The announcement clearly indicated that the new provisions would be discussed with the mining industry so that an agreed régime of concessions could be introduced. If indications had been given at that stage of the Government's commitment in detail of any replacement system of taxation, it would have been fair to criticise the Government for spelling out the details without first of all discussing their implications with the industry.
Would the Minister not agree that it would have been much better government, and would have looked much better to the world at large, if the discussions had taken place, the new system had been settled and announced together, rather than making a unilateral shock announcement about the withdrawal of a concession without any regard whatsoever to what the new provisions which would take its place would be?
Any reasonable person in the mining industry or elsewhere would have anticipated that there would be a change. The purpose of the announcement was to indicate that a change was about to take place and that we would discuss with the mining industry the implications of that change.
A short evening paper headline.