I would be interested to know from the Minister how much extra he expects to get this year compared with last year.

From what?

The Minister has left the rates the same as last year. Does he expect only the same revenue?

I expect a certain amount of buoyancy.

In the future, or at some time, would it be possible to use this type of increase of earned income allowance to encourage genuine overtime work in some factories? I am saying genuine overtime not moonlight overtime, moving from one place to another.

There is a problem there and it is something I am considering. There is very definitely a need for more flexibility in relation to smaller incomes.

I agree.

I am afraid I am rather vague on this but, perhaps, the Minister would explain to me what is the precise difference between subsection (2) (a) and (2) (b), this business of determination by the Revenue Commissioners. Both appear to be the same thing.

They are not. The history of that may be of some interest. As the section was originally put up to me it was more or less in the form of subsection (2), to make everybody claim. I said that was a bit unrealistic because the majority of people would be known and would be recognised as people who had produced work of artistic or cultural merit. Paragraph (I) is to cope with those— in other words, they are more or less automatically accepted.

Paragraph (II) is for people who would not be widely known and established who would have to claim.

On page 5, line 2, it says "jointly with another individual". This is in two paragraphs. Does it exclude the third?

It does not. I have gone into that and it includes two or more persons.

Arising out of a point I made on Second Stage, could the Minister say whether educational work would be regarded as creative and would pass a cultural test and be covered by this section? Take the production of school books.

Ordinary school text books would not be covered, but you would get a book which would have an element of scholarship or even a literary work or work of historical criticism. Works of that nature, which would be used as text books and which had a creative and original content, would certainly qualify. The original work would qualify. If somebody came along later on and produces it as a text book, that would not be covered; but, once the original is creative and has some element of originality, it is covered.

Does this apply to a single man?

Yes.

Fair enough. That point needed to be clarified.

It was clarified by way of amendment in the Dáil.

I assume this section refers to conversion to the decimal system?

Yes.

Can the Minister indicate how much expense will be incurred in Government Departments?

No, I am not able to.

But the Minister has to provide for that.

We would not be able to quantify that, I am afraid. Various shots have been made at estimating the total cost of decimalisation, but I would not be prepared to rely on any of them. There will not be a great deal of expense in the Civil Service in this respect in regard to machines.

An estimate has been made that it will cost more than £2 million to the nation. Is that correct?

I could not say. I know that that estimate was made by a working party, but I should not like to rely on it. Of course, the ultimate benefits of decimalisation will far outweigh any cost involved.

I assume this refers to investment in unit trusts outside this country by Irish assurance companies here. Is that correct?

It is the general investment outside the country.

Apparently it also refers to government securities outside the country.

Yes. It refers to all external investment by insurance companies.

Would the Minister indicate exactly what it does?

Until now the provision was that you had to have an illness which, in the case of any one individual member of the family, cost at least £50 in any one year and the allowance was given subject to a maximum of £300. That, of course, meant that you could have three members of the family each incurring medical expenses of £40 in the year making a total family expense of £120 and they would not be able to claim. What we intend to do now is to extend the provision by maintaining the £50 in regard to any one individual, but, in addition, if the family as a whole has medical expenses of £100 or more, they can claim. We are also increasing the upper limit of the claim from £300 to £500.

I presume this is an extension in favour of mentally handicapped and physically disabled children. It is a very welcome innovation.

It is to give a bigger allowance.

Does this refer to income tax deducted from ground rents?

It arises out of the abolition of Schedules A and B. It is to make sure that rents and receipts from easements of property are taxable.

Is this the subject of a reciprocal arrangement between states? Is the proposal here to deduct tax from the payments before it leaves this country instead of permitting the tax to be deducted in the country of the person who receives it?

This is only to protect our own revenue. It is to provide that tax be deducted here before the rents are paid abroad.

Does this refer to revenue from office blocks?

No. This is consequential on the abolition of Schedule A tax.

Perhaps the Minister would be kind enough to disentagle some of this rather complex section which I cannot quite follow. In the Third Schedule, Part I, there are two rates of duty. The wording of the section makes it extremely difficult to know what exactly is intended.

The section increases, from 8th May, 1969, customs and excise duty on wine to the extent of 5s 10d a gallon or 1s a bottle, allowing for turnover tax, and it provides a special rate of duty for still wine of UK origin to comply with our commitments under the Free Trade Area Agreement.

This, I presume, is in anticipation of hovercraft?

Yes. It is to apply the customs laws generally to hovercraft and hoverports. We are leaping into the middle of the 21st century.

This refers to the bottling of Irish wine but I have never heard of Irish wine.

Go bhfóraidh Dia orainn. One of the Senator's very prominent Fine Gael colleagues will be very annoyed with him for saying that. There is quite a thriving business in Irish wine.

I am interested to hear that. I notice that it must be fortified by spirits.

If the Senator were not so busy campaigning these days I would fortify him with some Irish wine.

I do not know whether I am glad or sorry, but I am retiring.

Perhaps the Minister would clarify the position with regard to subsection (3) (a) of this section which reads:

any estate duty payable in respect of a child's benefit shall be abated by the sum of £500;

A widow gets £1,000 and there is a sum of £500 for each child. It can happen under the way the law is at present that some portions of the £500 can be lost to the family by the way the system operates. What we are trying to do is to make sure that the family as a whole get the benefit of all the children's allowances.

What is meant by subsection (4) which reads:

Where the deceased was, at death, a widower or widow, any estate duty payable in respect of a benefit shall be abated by the sum of £500.

That is simply a continuation of the present provision in the case of the deceased being a widow or a widower.

We hope that next year the Minister will be able to go a little further and increase the pensions.

May I suggest that the definition of "the deceased" in subsection (1) of section 45 seems a little odd? "Deceased" is defined as meaning "a person dying domiciled in the State". From one point of view, we are all dying.

It is the same as the provision that has always been there. This is the way it has always been described. I do not think that the Finance Act would ever qualify for exemption on the ground of artistic or cultural merit.

I am wondering about the valuation on the artificial basis. I suppose all valuations are artificial.

The Senator has not got this right. This is a very important concession to farmers at the moment. There is a special provision for the valuation of agricultural land for estate duty purposes and it is a very favourable provision. It means briefly that if one takes a rateable valuation and multiplies it by 25 and if, as a result, the value of the estate does not exceed the figure of £1,000, the land is valued on that basis. What we are doing is increasing that limit of £1,000 to £2,000. This will bring in a considerably increased number of holdings which will benefit from this concession in the future.

This special provision is being made in respect of agricultural land and will benefit holdings. The effect is to exempt altogether a considerable number of agricultural holdings from estate duty.

The artificial basis is so many times the valuation?

Twenty-five times. We are increasing the limit from £1,000 to £2,000.

I should have mentioned earlier that we deduct the redemption value of the land annuity. We take 25 times its rateable valuation and then deduct the redemption value.

I was wondering whether this section refers to the purchase of land and buildings by non-nationals?

No. This section introduces the reductions which I announced in the Budget. This is to give effect to them.

Would it apply to transactions by non-nationals?

This is the general law of stamp duty applying to everybody.

This benefit apparently is available only in respect of industrial projects at Shannon. Would that be correct?

That is right. This section simply applies to corporation profits tax the same extension that we have already given for income tax earlier in the Bill. What we are doing in the Bill is extending the existing relief in regard to exports. It was due to terminate on certain dates. We are extending the terminal dates in relation to general exports and Shannon exports and in regard to income tax and corporation profits tax. This particular section here is the one that extends the date for corporation profits tax in regard to Shannon exports.

I want to bring out the point here that this is for Shannon only and is not available to other industrial estates.

Outside Shannon, exports tax relief applies.

Arising on section 57 on the wholesale tax, could the Minister state how much he expects to get from the increase in tax in the coming year under this heading?

About £1½ million.

It is a rather irksome tax. It seems to be on all sorts of items like cardboard boxes and so on.

The Budget idea was to select a fairly narrow range of goods which could be looked on as luxury-type goods. Perhaps, the section could be regarded as having two purposes— the first to raise revenue and the second to dampen down consumer expenditure on luxury-type goods.

I was not concerned with luxuries but merely with boxes for holding pamphlets. I found that 15 per cent was put on the boxes by the manufacturers of boxes for holding filing systems.

The section in the Bill has a fairly narrow range. I do not know what the Senator is referring to.

This tax might be used if possible to give preference to Irish produced boxes. I have no qualms at all in putting it on imports.

There are restrictions on us there.

I know that there are arrangements under the Free Trade Area Agreement. If anything could be done to give preference to Irish produced articles it should be done as a matter of urgency. I know there are difficulties in the way of doing it but something should be done.

I do not want to sound patronising but I should like to compliment the Minister on the manner in which he has gone through so many aspects of this Finance Bill and made so many novel changes designed to take away some of the anomalies, and even if they were not anomalies people believed they were anomalies, in relation to taxation. The Minister, by reason of his knowledge in the accountancy profession, has certainly brought his professional skill to bear on many sections of this Bill by ironing out some of the sections which appeared to be rough on the people affected. The Minister should be complimented on the fact that he has brought his professional skill to bear in relation to a number of these sections. It will make the administering of the law easier for the Revenue Commissioners who must be guided by the law in their interpretation of it and in their application of the regulations so far as taxation is concerned.

My remarks relate to the effect the enactment of this measure has had in the implementation of additional taxation on certain commodities. It was remarked, forcibly remarked, by a former Taoiseach of the Fianna Fáil Government that we had exhausted the taxation which could be derived from traditional sources of revenue and that we had reached the point of diminishing returns. There is no doubt that people are now enjoying higher incomes. Equally, there is no doubt that the Government, by taxation, are siphoning off many of the advantages that people expected to gain by increases in their incomes, whether those incomes were derived from increases in salaries and wages or from passing on to the community at large increased prices for goods and services.

How far have we gone on the road to the point at which we will lose many of the advantages we had heretofore in our competitiveness and how far have the Government contributed to any deterioration that may have occurred in that competitiveness? I am, I know, unorthodox from the point of view of the opinions held by economists and others, but I believe the soundest investment this country ever made was the institution and maintenance of food subsidisation. We have now reached the point—we are an agricultural country—at which, in order to meet competition in the disposal of our agricultural produce in other markets, we have heavily to subsidise many of these products. On the other hand, the prices our own people have to pay have reached such heights that they now have to limit their consumption.

Tourism is a very important part of our economic development. There are clear indications of our loss of competitiveness where tourism is concerned and clear indications of the danger of this industry being priced out of existence. The cost of living here has risen to astronomical heights. Where motoring is concerned we are the third most expensive country in Europe. There are still advantages from the point of view of relatively traffic free roads and so on but, when it comes down to pounds, shillings and pence, decimalised or not decimalised, travel in this country is very expensive indeed. One can go into far richer and more highly developed countries and obtain travel at a much lower cost than one can here.

From the point of view of the traditional goods tourists buy, I have been talking with a great many of them from the neighbouring island over the last month and they have pointed out to me that they could not see a single item here which they could not buy cheaper at home. This sort of thing represents a loss to the economy and the cost of living should not be allowed to reach such a point at this stage of our development. In his March television appearance the Minister warned the country of the dangers facing the economy. We had a reversal of that warning subsequently. We would all be glad if that reversal were a faithful reflection of the state of the economy, but our fear is that it was a temporary description of the condition of affairs for a certain period and, that period having passed, we are now forced to revert to the disclosure of a more factural position vis-à-vis the economy.

On the last occasion on which I spoke here I posed two questions to the Minister. He asked me to defer those questions until this Bill was before us because he would then be in a position to answer them. Since I spoke here a few weeks ago we have had the evidence in black and white of the directives issued to all bank managers with regard to the implementation of a very tight squeeze on lending. The Central Bank have clearly stated that two-thirds of the State credit is being reserved for Government borrowing and one-third will be available for the private sector. Several times in the last few weeks our local authority have been directed by the Minister for Local Government and the Minister for Education, and some other Ministers, to have recourse to our own banks for accommodation. I have questioned county managers on this, but the only person capable of giving a clear answer to the question is the Minister for Finance: I want to know whether this money which local authorities are compelled to borrow from sources outside the Local Loans Fund will be in competition——

Surely the Senator is entitled to talk only on what is in the Bill?

That is so and I would remind the Senator that he is now going outside the scope of the Bill.

Very well. I will take this opportunity of asking the Minister whether this one-third is for the private sector or whether it should be regarded as part of the two-third borrowing for Government purposes.

The next matter is that I want the Minister either to confirm or reject the positive assurance given by the former Minister for Education—he is a Minister also in the present Cabinet —on television that there would be no autumn Budget and that the Budget introduced by the Minister prior to the dissolution of the Dáil spells the end of the imposition of taxation in the current financial year. I want the Minister to confirm that he is satisfied that he has arranged for the collection of sufficient revenue to meet all Government expenses in the current financial year. As the Minister was denied an opportunity of confirming the statement that there would be no autumn Budget by the resignation of the Government——

The Chair cannot permit a Second Stage debate on the Fifth Stage of the Bill.

I ask the Minister to answer these two questions, questions fundamental to the future economy of the country.