asked the Minister for Finance the amount collected in income tax in 1973-74 on interest payments payable on deposits with building societies.
Ceisteanna—Questions. Oral Answers. - Building Societies.
110.
For the year 1973-74 the amount of income tax in respect of interest payments on deposits with building societies is estimated at £1,850,000. I might add that tax concessions to building societies, their depositors and members cost in the region of £4 million annually and the Exchequer subsidy to enable the interest rate on loans to be 1¼ per cent less than it would otherwise be, amounts to £2.4 million per annum. Thus, building societies enjoy a net profit annually at the expense of the Exchequer of £4,550,000.
Is the Minister aware that this is completely unsatisfactory to the people in County Dublin who are suffering from the effects of savage mortgage interest rates—the people who are involved in this strike which has been going on for 15 months?
I gave the information sought in the question.
Would the Minister not agree to give complete remission on interest on deposits?
No.
I wish to ask the Minister—I do not want to waste time going into the details or the implications of the removal of that taxation on profits—if he is aware of the situation this afternoon. I personally checked today, in connection with a case I had, with four of the leading building societies and I found that none of them is prepared to consider a loan application unless the applicant has had a deposit in the building society of a minimum of £1,000 in a period of 12 months? Is the Minister aware of this and, consequently, would he reconsider the question of removing tax on deposit interest with a view to getting a flow of money into building societies?
Building societies are already enjoying benefits which have to be paid for by all taxpayers in the community. The figure is £4.55 million. That is a substantial benefit.
The cost to the community and to the economy of what is happening in the building industry is very much greater than the Minister indicates. Would he use a little common sense and forget the doctrinaire nonsense we have been getting from him?
Would the Minister consider that housing is a real social need and that in view of that the concession suggested could be justifiably granted?
It could not be justifiably granted because it would not have the objectives the Deputies are suggesting.
111.
asked the Minister for Finance if he intends to abolish liability for income tax on interest earned on building society deposits.
For the reasons stated in reply to Question 110, the answer is in the negative.
Is the Minister aware—I know he was party to the promises made by his colleagues at the time of the election—that that negative answer to the people who are on strike will mean that they will stay on strike for many months ahead and that this will cause havoc and hardship?
I think that when the societies—ultimately that means the borrowers—are receiving a sedative that is costing the community more than £4½ million it cannot be regarded as insignificant help.
What advice would the Minister give to the people who have to face the massive burden of these savage interest rates?
Not to listen to Deputy Raphael Burke.
Smart answer. The Minister will get his answer when the people get the chance.
112.
asked the Minister for Finance when he intends to introduce legislation to grant trustee status to building societies, as indicated in September, 1973.
I have indicated to the Irish Building Societies' Association the financial and management requirements that I would regard as appropriate for the granting of trustee status and these are being examined by the association. Until I receive a response from the association I will not be in a position to say when legislation is likely to be introduced granting trustee status to building societies.
I did not hear the beginning of the Minister's reply. Would he please read it again?
I said, as I said this morning, that I have indicated to the Irish Building Societies' Association the financial and management requirements that I would regard as appropriate for the granting of trustee status, and these are being examined by the associations.
Is the Minister aware that in a radio programme in September, 1973, the Minister for Local Government stated that it was his intention to introduce legislation in the coming session—starting in October, 1973, granting trustee status to the building societies?
The Minister for Local Government is not involved in legislation in regard to trustee status. I explained this morning that several people have to be consulted in the matter of conferring trustee status, including the judiciary and the Governor of the Central Bank. These negotiations are proceeding. The delay at the moment is not on the part of the Minister for Finance and never has been the fault of the Minister or the Department of Finance. I am anticipating that the negotiations will soon reach a satisfactory conclusion.
Is the Minister saying that the blame for any delay in granting trustee status lies with the outside bodies that he has mentioned?
I am saying it does not lie with the Minister for Finance. I am saying that the process is necessarily involved because several institutions have to be consulted in the public interest.
Would the Minister for Finance advise me whether I am to believe anything that comes out of the mouth of the Minister for Local Government.
Everything.