Deputy Dowling reported progress; Deputy Connolly.

Is there no Minister present?

There is one Member only on the Government benches. The attendance of Government Deputies here over the past two or three weeks has been disgraceful.

It would be in order to have a quorum.

We ought, to give the Minister time to attend to his duties.

The Chair has called Deputy Connolly since Deputy Dowling is not here.

My attention has been called to the fact that there is not a quorum present, due largely to the fact that there is one member only of the Fine Gael and Labour Parties present and he is here only because he has to answer questions, or attempt to do so.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

I want merely to deal with a few points in relation to section 2 and its effects on the economy and employment. There is no doubt that it will have a major effect on employment because people realise now that anybody with money deciding to come to this country will be taxed to the hilt. That is the answer to all that. Furthermore, at this time the country is very badly in need of capital and of investment especially when many industries that we have are collapsing and many others are about to collapse.

Like Fianna Fáil, they are all collapsing.

I want to be kind to the Deputy as a Limerick man because he has enough problems in Limerick.

And we will solve them.

The whole taxation package now before the House and especially this Bill will have an adverse effect on industrialists who intend to start business in this country. Why should anybody start a business here now? If an industry expands, irrespective of what it is, it will be liable for tax. You need not go far in Dublin city until you find the smallest property is worth over £100,000. I am sure there are property owners in this city who have property that will be valued at at least £5 million. Will the valuing not be done by the Valuation Office? They are not far out in their valuations and will not let anybody away with very much.

If the Government force this Bill through the House it will have serious repercussions on an economy which is faltering and starved for capital. Nobody can deny that. The Taoiseach recently said we were living on borrowed time and, I suppose, on borrowed money also, as much as we are able to get. The Minister for Foreign Affairs is now on a pilgrimage all over the world to see where he can get a few pounds in francs or in marks or anything else to bolster up this country and keep the Coalition Government in office until the members get their pensions out of it. Then, as before, they can throw it to the wolves or to anybody. It will be left to the incoming Government to decide what road to follow. If we continue on the road we are now following I can see nothing but complete collapse. In the situation we now have the present taxation package will inevitably bring about chaos. Why would anybody with money build a factory here now?

(Cavan): Because it would not be subject to wealth tax.

Of course it will be subject to wealth tax.

(Cavan): No. I have explained that before.

With due respect to the Minister we have seen what happened in regard to the mines: we went back on our obligations, and if you once break obligations people will always say it is possible you will break them again. This Bill is the thin end of the wedge.

The Deputy should deal with section 2 of the Bill.

On section 2, I do not say that the people are all innocents but they do not understand the fine print that can be included in a Bill. The Bill can be put through the House in one form and then all you have to do is bring in an amendment, under section 2 in this case, and you can increase the rate from 1 per cent to 2 per cent or 5 per cent or 10 per cent as was done in the case of the Racing Board Bill with which we were dealing an hour ago.

Deputy Connolly should be allowed to make his speech without interruptions.

Keep going and talk about nothing.

I know how the Fine Gael members see the Bill. Some of them are very perturbed about it and had the courage to admit this in the House. I hope when it comes to voting the Bill through the House they will have the same courage. It is well known that this is part of Labour policy to try to——

It is normal practice to allow the Deputy in possession to make his contribution.

On section 2 of the Bill.

On section 2 of the Bill.

I do not think they are speaking on the section.

The Chair will take care of that.

Deputy Coughlan should look after Mick Lipper.

I was dealing with the Labour Party. I think Deputy Coughlan is the only Labour man here.

If the Deputy would address the Chair we might avoid some of the interruptions.

I did not mean any disrespect. We all know why this Bill is being put through, why the Government are trying to push it through. This is part of Labour policy. They told Fine Gael that if they did not push it through Labour would leave them.

Are we discussing section 2? It does not seem so from what I have heard.

The Deputy has not read the section if he says that.

Section 2 deals with the whole level of taxation.

We are dealing with the section on wealth tax and not with anything else.

Surely we can talk about the effects this Bill will have on the economy.

The Chair has explained on a number of occasions that the principles of the Bill have been disposed of already on Second Reading and that we must keep to the sections on Committee Stage.

The section refers to the charge of wealth tax and reads:

Subject to the provisions of this Act and any regulations thereunder, with effect on and from the 5th day of April, 1975, a tax, to be called wealth tax, shall be charged, levied and paid annually upon the net market value of the taxable wealth on the valuation date in every year of every assessable person and the rate of tax shall be 1 per cent of that net market value.

Is this the first time the Deputy has read the Bill?

I have known for some time what is in the Bill and that is why I am worried. Deputy Collins, too, is worried but he must row in with his party. He has received a scorching already and, no doubt, he will try to avoid receiving another because to put himself in that position again might lead to his being thrown out. I understand that if the Government so wish, they may amend the 1 per cent provision so as to increase the rate to whatever percentage they wish. I would not mind if there was a lot of wealth in the country.

(Cavan): If there is not a lot of wealth in the country, there is nothing to worry about so far as the Bill is concerned.

If the Deputies opposite do not want to tax wealth, what do they want? We cannot tax paupers like myself.

Deputy Connolly is in possession.

But by next December the rate could be increased.

Would the Deputy be a little more refined and practical in what he is saying?

Deputy Connolly.

What is the Deputy worrying about? Is it his 150 acres of land?

We are depending on the people with money to finance the country as we have depended on them down through the years to finance the various projects. The people with the money are those who have kept the banks and the country afloat but now foreigners who may be interested in starting industries here are asking not what are our IDA grants but what is to be our taxation code. They are scared because they know that this may be only the thin end of the wedge.

We had all this in relation to the arms trial.

Deputy Coughlan had to ask his mother whether he could join the Fenians.

My mother involved herself in the Fenian movement while Deputy O'Malley's grandmother sold Flanders poppies.

It is not in order to bring personalities into the debate. Deputies should not interrupt the proceedings of the House.

Deputy Meaney has been demoted by his party.

How can the Deputy face the people of Limerick?

The Chair is waiting for Deputy Connolly to continue.

Has Deputy Coughlan not a fine colour, God bless him?

God gave me the colour I have.

I wonder whether Deputies will allow the proceedings to continue.

The Littlejohns are coming back to Ireland again.

These interruptions are not adding to the decorum of the House and are not in order. I hope the Deputies will co-operate with the Chair in this matter.

I cannot understand why the Government should introduce this measure at this time when there is such need for capital investment here. The CII have stated that the tax will have an adverse effect on investment. People will be reluctant to come here because the tax will affect all types of investment. Many people have said this.

They are those who belong to the Taca brigade.

This country was only at a developing stage up to about two years ago. Of course, now it has taken a downturn.

The Taca gang have gone bankrupt.

There are closures and redundancies. There is lack of confidence on the part of industrialists and farmers. This must have an adverse effect on the economy.

Fine Gael did not wish to bring in this Bill but the Labour Party made them do so. The Labour Party have said openly that they wanted this taxation package introduced. The Labour Party and the workers do not realise that it is the people with money who provide jobs and will provide them in the future. Workers are led to believe that there are people getting away with evasion of tax. I do not see how there could be evasion. All the holes are being plugged so that there is no possibility of evasion.

Is the Deputy in favour of evasion?

I am not in favour of evasion. There are very few evading tax now. Workers have been brainwashed into believing that people are getting away with evasion, for instance, people who will be liable to wealth tax.

Taca men.

People who will now have to pay wealth tax have been the best employers in the country. There is no incentive now for people to start industries or to expand industries. It is easy to talk about other countries such as Belgium, which are highly industrialised as we are not.

The number of wealthy people in the country is small. If we continue on the road we are on every potential employer will be driven out. It is useless to say that there are safeguards in the Bill. Business people will know that the Bill can be amended and fine print written in which will have an adverse effect.

Not far from where we are now there is property that will come under this tax. The tax will also affect hotels. The hotel federation are very concerned about it. They have written to me and I presume to other Deputies about it.

The Bill affects people in every walk of life. The businessman recognising that he will be taxed to the hilt, may decide not to expand. This will mean a loss of potential jobs. The unemployment figure is 103,000.

He will withdraw his contribution to the Taca fund.

Is it fair to remark that when a discussion has to take place here today on a very important matter this man showed that he was Stiofán an Dá Thaobh and was afraid to come in and express his opinion or to vote on a Bill that affects him and everybody else in the racing industry? He was afraid to show his hand then.

The day anyone will accuse me of being afraid——

Stiofán an Dá Thaobh —sin é an ainm ceart a chur air.

We pulled the carpet from under you and the thing goes through. We are all very comfortable and happy. My profession is very comfortable and happy because of what the Taoiseach is doing.

If you have not got a conscience you are always happy.

Deputy Connolly, without interruption.

I was dealing with the businessmen who are giving employment.

The Deputy is very worried.

The Deputy has been in here since 4 o'clock and has done nothing but interrupt. If he is not feeling all right there is a place for him. He should go out to the restaurant and get himself a cup of tea.

The Deputy is very worried.

I was dealing with the effect the Bill will have on employment, especially at this time when we need more employment to reduce the dole queue. What is worse, we have to borrow the money to pay the dole. We are borrowing from everyone and anywhere that we can. It is a shame that the Government should have to do it. They are trying to take money from anyone they can and deter money from coming into the country.

(Cavan): The Deputy does not want us to borrow it or to raise it by taxation. How does he think we should get it?

The Government must pay their way but they are not doing so. They are turning out the money on a printing machine and hoping for the best and they are living on borrowed time, as the Leader of the Minister's party said.

On a point of order, what has this to do with section 2?

What has been happening in the last five minutes has nothing to do with the Bill.

They get sore when they hear the truth. It galls me that workers do not realise the effect this Bill will have on jobs when the man with the money decides to pull out. He is in a position to move out. There is no incentive to remain. If he raises his head, he will be squeezed all the more. I am not taking the side of wealthy men but——

What is the Deputy doing?

The workers do not know what effect this Bill will have on them. All of us know that many companies have gone into liquidation. It is happening practically every day but the papers are doing the best they can to cover it up. Yesterday they spoke about a package deal the Government were about to introduce. We have been told that the Government have decided to call in the trade unions, the employers and the farmers. It is not the job of those organisations to run the affairs of government. They were not elected to do so and the Government should not ask anyone else to do their business. A Government are not worthy of their name if they do that.

This taxation will hit every factory. The result will be that in order to balance their books the companies will declare many of their workers redundant. This is the new method they use. If workers seek an increase the companies pay it but then they try to see how they may prune their work force. The result is that the number of unemployed are increasing every week.

I am not against wealth tax. However, the timing of this Bill is wrong in view of the desperate state of the economy and our balance of payments. Yesterday the Minister for Industry and Commerce tried to cover up this fact. He told us we should not state the facts because it would do the country harm. The Taoiseach recently stated that our balance of payments is running at approximately £300 million and that it is the highest in 24 countries. It is obvious to anyone that we cannot continue borrowing. Our creditors will want to know how the money will be repaid.

We cannot look forward to an expansion in the economy. Slowly but surely it is grinding to a halt and the workers will be hardest hit. The industrialists are frightened of this legislation. It would be all right if we were a highly industrialised country, if we were like countries such as America, and Libya at the moment, who have tremendous resources. We have no such resources. They may say we have mines but the Minister for Industry and Commerce has been messing around in connection with this matter and has done nothing. Some of the mines are closing. A mine in Tipperary will close at the end of next month with 350 redundancies. This is happening because of the measures taken by the Government. There is fear in the country and that is one of the worst things.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

I should like to deal with the effect this tax will have on farming. Nobody can deny that it will have an effect. I know Deputy Coughlan knows very little about agriculture. Agricultural expansion will be affected by this imposition. Farmers with a valuation of over £100 will be caught; if they have any capital or other assets they will also be caught.

The Deputy is on the wrong Bill.

(Cavan): On a point of order, might I respectfully suggest that, if it is not possible to relate the argument to section 2, it should at least be related to the Wealth Tax Bill?

The Deputy will keep to section 2.

I am referring to what is happening and what will happen, to the effect this Bill will have on everybody, including the worker.

The Deputy has not got a clue.

Have industrialists made representations to the Government about the serious repercussions there will be if this is enacted?

Section 2.

Section 2 deals with all the Bill and the effect it will have. It will have an adverse effect on all walks of life and eventually it will affect the worker. The workers do not realise this because they are being brainwashed. "Informed sources," whoever they are, make statements in the Press and when one asks who the sources are ignorance is pleaded. These informed sources say this Bill will have no effect at all on the economy. If that is so, why do the Government not withdraw the Bill? They will not withdraw it because the Labour Party have put the whip on Fine Gael; if Fine Gael does not do this Labour will not stay with them. Many Fine Gael members are opposed to this but there is nothing they can do. They have to row in, or else.

Workers will be affected by this Bill. There is bound to be an adverse effect on expansion. Nobody can deny that. We badly need employment but this Bill will frighten off industrialists. People will not invest money in the country. If there is no investment the capital resources available will become dried up and then there will be nothing left.

The Minister for Lands must realise the effect this will have. It has already had an effect because it is running millions out of the country. An effort may be made to counteract that statement by saying that the returns from the Central Bank show that not to be true. Remember inflation is running at about 24 per cent and that has an adverse effect. When it comes to providing more jobs the money will not be there to create the jobs. The number of inquiries to the IDA have fallen off. Potential industrialists are frightened off by this taxation. The grants are not now as attractive as they were in earlier years.

I want to emphasise that this taxation will affect the worker because industrialists will not set up here and job opportunity will become negligible. Most companies are operating on borrowed finance.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

I move to report progress.