Irish waterways history

On 18 April Michael Noonan, Minister for Finance, responded in the Dáil to three questions from his party colleague Eoghan Murphy about the cost to the exchequer (ie the taxpayer) of tax breaks, exemptions and allowances.

The minister’s response included an “Estimate of cost of certain property-based tax incentives and incomes exempt from tax for 2008 and 2009”. I am interested in one of these schemes, the Mid-Shannon Corridor Tourism Infrastructure investment scheme, which I have been trying to find out about for some years.

Note that my link is to a Shannon Development page on the subject but the scheme extended to some areas outside Shannon Development’s region: it covered district electoral divisions [I wonder why they were chosen as the relevant units ….] for counties Clare, North Tipperary and south Offaly, while Fáilte Ireland covered DEDs in counties Galway, Roscommon, Westmeath and north Offaly. The term “mid-Shannon” seems to reflect 19th century thinking, when estuary and freshwater were seen as a unit: the scheme’s coverage extended as far south as O’Briensbridge, just above tidal waters at Ardnacrusha.

The scheme seems to have been intended to cover areas that were not eligible for the disastrous Upper Shannon Rural Renewal Scheme, which has left the area strewn with unfinished houses. As far as I can see there is no overlap between the two schemes in the DEDs they cover in Co Roscommon, which is the only county covered by both. However, while the focus of the Upper Shannon scheme was on housing (with provision for some “commercial” activities), the Mid-Shannon scheme provided for:

• Education tourism facilities
• Visitor attractions/centres
• Cultural facilities
• Wellness and self development amenities and facilities
• Equestrian facilities
• Facilities for water-sports activities
• Training facilities for adventure activities and/or simulated facilities
• Facilities for boat rental and inland cruising
• Outdoor activity centres
• Certain restaurants and cafés
• Registered holiday camps.

According to the minister, in 2008 12 €1.8 million was claimed under the Mid-Shannon scheme, by 12 claimants, at an assumed maximum tax cost of €0.7 million.

In 2009, though, there were only 2 claimants, who claimed €0.6 million  at an assumed maximum tax cost of €0.2 million.

The minister said:

The figures shown include the amounts claimed in the year but exclude amounts carried forward into the year either as losses or capital allowances, and include any amounts of unused losses and/or capital allowances which will be carried forward to subsequent years.

And this was odd because it was …

… not consistent with the actual data on the numbers of successful applications for approval under the scheme. Not that I blame the minister for being confused, because I found it very difficult to track down information about the implementation of the scheme. However, as the details were handled by the Mid-Shannon Tourism Infrastructure Board, which was to report annually to two ministers …

The [mid-Shannon Tourism Infrastructure] Board shall prepare and submit to the Minister for Arts, Sports and Tourism and the Minister for Finance an annual report on the administration of the Scheme.

… and [EU] Commission Regulation (EC) No 794/2004 of 21 April 2004 implementing Council Regulation (EC)No 659/1999 laying down detailed rules for the application of Article 93 of the EC Treaty required the submission of an annual report to the European Commission, I can quote from the Board’s report for 2008:

Fáilte Ireland and Shannon Development currently have over twenty projects under discussion with the promoters. There were no projects presented for consideration in 2008, but the Board expects that some projects will be presented to it for consideration during 2009.

And for 2009:

Four projects were presented to the Board for consideration. After review, three projects received Approval in Principle and one project was rejected. […] The list of potential projects was in excess of twenty at the end of 2009 but many are prevented from being progressed by a number of factors including planning referrals and funding difficulties. There was zero expenditure incurred during 2009 by projects that received Approval in Principle under the Scheme.

And for 2010:

The Board met on four occasions during the year and reviewed two applications. They granted Approval in Principle to one project and rejected the second project. […] The Board […] was notified of the decision by [promoters of a scheme approved in principle in 2009] not to proceed to certification under the Scheme. […] There was zero expenditure incurred during 2010 by projects that received Approval in Principle under the Scheme.

I understand that none of the projects given approval in principle has proceeded and that nor has any other project. Thus the minister’s €0.9 million assumed maximum cost of the tax breaks for 2008 and 2009 overestimates the true position by, er, €0.9 million. I don’t understand why the minister’s department thinks any provision is necessary.

Labour, not capital

The initial deadline the Mid-Shannon scheme was extended to 31 May 2010 and money had to be spent by 31 May 2013 if investors were to get their capital allowances.

The insane policies of the Fianna Fáil-led governments, and the greed and stupidity of investors and lenders, have caused such a destruction of capital that schemes like this are unlikely to succeed. And anyway, it might be better to take steps — like reducing the costs of starting and running businesses — that would reward labour rather than capital: steps that would encourage folk along the waterways to start small enterprises, or ancillary enterprises, using such resources (location, skills or whatever) as they already have.