I am very glad that the Fine Gael Party are beginning to wake up and take some interest in this very important motion. When it was moved on Wednesday last, they fled from the House.
Private Deputies' Business. - Poor Law Valuations—Motion.
Debate resumed on the following motion:—
That the Dail is of opinion that a commission should be established to inquire into the methods by which rateable valuations are fixed and to make recommendations for the removal of anomalies and injustices and the reform of the system of poor law valuations and that pending the report of the commission no increase should be made in the valuation ofbuildings because of improvements or extension. —(Deputy Cogan).
Mr. Cogan rose.
Notice taken that20Deputies were not present; House counted, and20Deputies being present,
Tell us something about the motion now.
This motion has been reached because Deputy Murphy and his colleagues failed to propose and speak to the motions standing in their names. It asks that a commission be set up to inquire into the whole question of rating and rateable valuations, and that, pending the report of that commission, a stay be put upon the process of increasing existing valuations. That proposal is put seriously before the House because there is a widespread feeling throughout the country, in city, town and rural areas, that the present system of poor law valuation contains many anomalies and inflicts many hardships.
I am not suggesting for one moment that this problem is capable of easy solution. It is a complex and difficult problem, just as every problem relating to the assessment and imposition of taxation is a complex problem. It is always difficult to ascertain accurately what is the best and fairest means of distributing the burden over all the sections of the community and, personally, I feel that it is right and proper that taxation, in the main, should be divided into two classifications or that there should be two types of taxation — indirect taxation based on the outlay of the individual, the manner in which he spends his money, and direct taxation, which is a direct impost measured according to income. There might be some to say that all taxation should be indirect, that that is the easier way to spread the burden on the community. I do notshare that view. I think it is no harm to have a certain amount of the revenues of both the central and local authorities collected by means of a direct levy, proportionate so far as possible to the income of the individual citizen. If we accept these general principles, we will admit that direct taxation is necessary and an essential part of the general code of taxation.
Under the heading of direct taxation, we have local rates and income-tax. Income-tax is based mainly upon the income of the citizen and rates are levied on the amount of property, the valuation of the property, owned by the citizen. In this motion, we are dealing with the matter of property valuation for the purpose of taxation. It must be remembered that the rateable valuation of property affects not only the citizen's contribution to local authorities but also his contribution to the provision of public lighting and of lighting to his own home, together with such other charges as those in relation to water supply and so on.
Valuation also affects the licence duty in respect of licensed premises, so that the amount of valuation assessed upon a citizen's property has a very material affect on the burden he has to bear. If we accept that there are anomalies and injustices in the present system of rateable valuation, we must accept the view that this motion is justifiable and that it is at least desirable to inquire into the whole system with a view to designing some measure of reform.
It may be asked in what way do anomalies arise. In the main, they arise because of the fact that rateable valuations are based on a very old statute, a statute of 1852, over 100 years ago, which provides that valuation shall be based on the annual value of the citizen's property, whether land or buildings. I think it is generally referred to as the letting value of the property.
We all know that conditions have changed very materially during the past century. A system of valuation which might have been efficient andjust 100 years ago would have to be very well designed to meet all the changes that have occurred since then. In the Valuation Act there is provision for periodic revision of the valuation of individual citizen's property. In the main, periodic valuations are brought about as a result of a request from the ratepayer, from the local authority or the local authority's officer, the rate collector. I think it is generally on the application of the rate collector that revisions are made. Having regard to the fact that the value of money has, in the main, steadily been falling over the past 100 years, it is inevitable that valuations should rise from year to year in so far as they are carried out or revised. This is one way in which injustices occur. If a citizen's property is revalued or has recently been revalued the new valuation will necessarily be high. If a citizen's property has not been revalued for a fairly long period, the valuation will be relatively low.
Since these revisions of valuation occur at different periods, there is a very wide variation in the valuations of different properties situated perhaps even in the same town, city or the same rural area. It follows, therefore, that even if you accept the principle that the basis of valuation is relatively fair, the fact that valuations are carried out in different years constitutes a very grave injustice. There is some property which is valued higher than other property of equal market value. Therefore, there seems to be a case, even on that narrow basis, for an investigation of the whole position.
The injustice of the present system is more apparent when we consider that revisions of valuation frequently take place where property is improved— where new buildings are erected or existing buildings are enlarged or improved. That, in itself, constitutes one of the most serious hardships in the existing system. The person who improves his property is penalised for so doing by having his rateable valuation increased and, therefore, his share of direct taxation to the local authorities is increased and other charges are proportionately increased. That is a grave injustice and I think itis bad from a national point of view. It is true that, under existing laws, various remissions are granted in respect of some improvements. At the very outset, the original Valuation Act provided that new farm buildings would enjoy a remission of rates for seven years. That might seem a fairly valuable concession but if it is analysed it will be seen that it does not amount to very much. Anybody who is familiar with rural conditions and the manner in which farmers carry on their ordinary business knows that only rarely does a farmer build the full number of outoffices he requires on his farm in one year. Generally, he acquires a farm without outoffices. If necessity arises, or if his conditions improve, he seeks to erect new buildings or to improve the existing buildings from year to year.
In the first, second or third year he builds perhaps only one small out-building. In the course of a further number of years he probably erects another out-building. If he is an enterprising and industrious man, he continues to improve his farm buildings. It is possible, however, that the rate collector may note the new or improved buildings on the farm and that he will look into the matter. If, by the time the rate collector takes note of the improvements, the buildings are seven years old, then the increased rate takes immediate effect. There you have an immediate damper put on that enterprising farmer and it is an immediate deterrent to a further improving of his farm buildings. I consider that that is utterly and completely wrong.
One of the strongest complaints which our fathers had against the land-owners was that when they carried out an improvement to their farm or house or outoffices the land-owners immediately increased the rent. That very grievance is being perpetuated under the existing valuation system, notwithstanding the seven years' remission of rates. I think that, to be fair, it would be desirable to avoid any increases in the valuation of farm buildings during the term of ownership of the existing owner. I think there should be no revision of valuationunless there is a change of ownership. To a certain extent, that would get over the problem.
Under the Local Government and Housing Acts, houses for which there is a Government grant get a two-thirds remission of rates for a period of seven years and non-grant houses get a two-thirds remission of rates for five years. That, again, is a very small concession, having regard to the cost of building.
As we all know, most dwelling houses now are built with the aid of housing loans, the repayment of which extends over 25 or 35 years. But, while the repayment of the loan is current there is a very heavy burden on the owner of the new house. Therefore, I think there is need for a further concession in regard to new houses. We know that, under the Undeveloped Areas Act, substantial concessions are made in regard to new buildings for industrial purposes. There is a complete remission of rates for a period of seven years. Under the Gaeltacht Housing Acts, a remission of rates for 20 years is given. I think that a remission of rates for 20 years, in respect of a new house, seems to be what is urgently required and what I think justice would demand.
I know it will be said that concessions in respect of rateable valuations constitute a potential or actual loss of revenue to the Central Exchequer and to the local authorities. That point of view may be urged, but I think, as against that, we have to face the fact that any incentive which is given to a private individual to improve his property is really a social benefit to the nation. It may be that the amount of additional revenue which might be gained by increasing the valuation of ratepayers' property, because of improvements or extensions carried out, would be completely offset by the amount of unemployment caused by deterring citizens from improving their property.
That is particularly true in regard to another type of property, the property of business people. Shopkeepers, as we know, are in the main thrifty, industrious, enterprising people. Most successful businessmen like to improvetheir business premises because they realise that it is not only of benefit to themselves to have their premises up-to-date but that it is of benefit to the street, town or village in which they live. They realise also that, by improving their property, they are giving employment to their neighbours and to their neighbours' children.
Now, under the existing Acts there is no concession whatever for the businessman who improves his property. Immediately he extends or enlarges his business premises, he becomes subject to revision and, I would say, to an increase in his rateable valuation and, therefore, to an increase in his rate burden to the local authority as well as in his contributions in respect of other fixed charges based on property valuation.
I have come across cases in my own constituency where shopkeepers, the owners of licensed premises anxious to improve their business and to cater for the much-boasted tourist industry, enlarged and extended their licensed premises. They did so in order to give their customers the amenity of a comfortable and up-to-date saloon bar or restaurant rooms in which they could take their food or refreshments in pleasant and decent surroundings. Almost immediately they carried out these improvements their premises were revalued, the valuations in many cases showing a very substantial increase. I have known of cases where the rateable valuations of business premises were doubled and in some cases trebled because of improvements carried out by the owners. It is true that this increase in valuations brings in additional revenue to the local authority. Perhaps, if that system of increasing valuations was not in operation there would be a reduction in the expenditure of the local authority inasmuch as the business people in these towns and villages would go on improving their property, giving employment to workers and thereby relieving the burden on the local authority. That is a consideration which, I suggest, must be taken very seriously. We are, I think, tendingtoo much towards relying entirely on the State to do everything for our people: to provide them with food, clothing, money and everything else, and, as a necessary corollary to that, to go all out to rake in the last shilling from the citizen. I think it would be much better to give the individual citizen the chance to do something for himself, and in doing that to do something for the community at large.
I think that if we were to stay the hand of the valuation authorities in regard to improvements to property, if we could get them to ignore for a considerable time improvements carried out, and thus give an incentive to citizens to spend a little of their own money improving their own property, we would be doing a very great national service, perhaps a much greater national service than by increasing valuations, increasing the rates and increasing at the same time the amount of expenditure required to relieve poverty and destitution.
I think there is something radically wrong with a system which penalises the citizen for expending money on improving his property, in giving employment to workers and at the same time increasing the productive output of the property which he has in his hands.
This is a small nation made up to a very great extent by a very large number of small property owners, and because of that we must have regard to the immense advantage it would be if every property owner sets out deliberately and consciously to improve his property. I agree that under the existing law there is no interference or alteration in land valuations. Land valuations were fixed 100 years ago and have never been altered. Perhaps that is a good thing, although there are very grave complaints about anomalies in the present system of land valuation inasmuch as there are areas where, because of the conditions under which farming was carried out 100 years ago, the valuations are higher than the valuations of better land in other parts of the country. We know that wheat growing was one of the most important items in the farmers' income and thatthe price of wheat 100 years ago was relatively high compared with other crops. When the Griffith valuation was taken, land under wheat was assessed at a high valuation. That has survived to the present day.
I know quite well that there is a feeling amongst farmers that it would be undesirable to alter generally land valuations because of the fear that a general revaluation means a general increase. I will come to that question now.
It is wrong that a general revaluation should mean a general increase. A new basis should be found for valuation purposes which would not mean an increase. There are people who will say that it does not matter very much whether valuations are increased or not because a general increase in the total valuation of the State would mean that the rate in the £ would be proportionately reduced. That is a rather dangerous theory. If there were a general increase in valuations, I think there would be almost automatically a stepping up of the rate in the £ by local authorities. The rate in the £ might be reduced for perhaps one or two years but, within a short time, it would be brought up to present level. Therefore, farmers and ratepayers generally fear any general revaluation but we are anxious that the whole matter be investigated with a view to removing the anomalies and injustices which I have indicated.
It is particularly necessary that no increase should be imposed on rateable valuations because of improvements or extensions carried out, at least for a very considerable number of years or, better still, until there is a change of ownership. That, of course, might not apply in the case of limited companies where ownership would remain permanent. There might be some specified number of years in that case. A considerable period should be allowed to elapse from the time the improvement is carried out until the valuation is increased.
There is another anomaly which I believe exists. I have not had time to check up on this. There is no rateable valuation as far as I know on groundrents. If there is any particular type of property that should be subject to a rateable valuation it is the site upon which buildings are erected. It is altogether wrong that, while the owner of the building, the leaseholder, who, perhaps at very considerable expense to himself, has erected a building, is subject to a high rate, the person who owns the site and who derives a fixed income from it is exempt from contributing to the local rate in respect of that property. That is definitely unjust. It is a matter that a commission such as I have suggested should look into and seriously investigate.
It will be acknowledged that the rateable valuation of the State has very considerably increased over a number of years. I have here only recent figures but they show a substantial increase. The total rateable valuation of all property in the State was £12,414,000 in 1946, and by 1950 it had risen to £13,000,000—an increase of about £500,000 in four years. That indicates a very rapid stepping up in the basis upon which rates are levied. It may be said that a large portion of that was due to new buildings. It is equally true that a substantial portion of it represents revision of rates on existing buildings because of a certain amount of renovation and improvement. That is altogether wrong.
From every point of view, there is an urgent need for an investigation of the whole system. It is particularly wrong that the farmer, who has never very much spare money to invest in permanent improvement of his property, should be penalised because he seeks to improve that property by building new cowsheds, new out-offices or improving his dwelling house.
We ought to face this question in a broadminded way and realise that, if we encourage citizens to improve their own property, we will give more help to the deserving section of the community than could be given by the State in the expenditure of the money which they would rake in from those citizens through increased valuations.
Therefore, I commend this motion to the House and hope that the Minister will seriously consider the setting up of a commission to inquire into thewhole system of rateable valuations, and that he will give attention to the second part of the motion which asks that, pending the report of this commission, no further increases be made in rateable valuations. If that is done, it will give a fillip to all enterprising people who are anxious to carry out building and improvement work which would increase the volume of employment generally.
I have frequently in this House referred to the injustice meted out to the farming community under the present valuation system, but I want to make this admission at any rate, that that injustice is being mitigated to a certain extent, partly because of the increasing valuation of urban and city property, and partly through the increase in the agricultural grant recently. But, in addition to that, one point which I frequently made in the past in support of the derating of agricultural land has been weakened by the fact that over the last ten years there has been a steadily increasing volume of State expenditure on the improvement of land.
Our case in the past was that, while the farmer had to meet a substantial burden of rates, he derived very little benefit from State or local expenditure generally. Since the farm improvements scheme, the farm building scheme, and, more recently, the land rehabilitation scheme and the drainage scheme were introduced, that case is being met I would say to a certain extent. In addition to that, the proportion between the valuation of land and the valuation of buildings has been altered. Back in 1929, land valuation represented 72 per cent. of the valuation of the State and I think at the present time it is very little more than 54 per cent. Of course that does not represent the total valuation of farms, because that only includes land, and in addition to that you have the valuation of farm-houses and buildings. At any rate, it does show that the excess in the valuation of land in proportion to its income and producing capacity is not as great as it was. Land valuation does not form as big a proportion of the total valuation of the State as itdid and in that way one of the former grievances in regard to rating is being met.
There is, however, the other very substantial grievance, that improvements carried out in farm-houses and buildings and permanent property of that kind are being valued on a different system, and I think it is desirable that that injustice should be removed, not only in the farmers' interests but in the general interests of the nation and in the interest of increased employment.
Is there a seconder for the motion?
I formally second the motion.
While I do not see very much in this motion, at the same time it serves a very useful purpose in that it provides the House with an opportunity of discussing this valuation system. The fact that Deputy Cogan was unable to get a seconder for his motion——
Acting-Chairman
It has been seconded. The Deputy could not be debating it now if it had not been seconded.
I had not completed my sentence. He would not have got a seconder were it not for the Minister for Finance. The fact that Deputy Cogan was not able to get a seconder for the motion and that the Minister advised a member of his Party to second it leads us to believe that Deputy Cogan's motion is not very highly valued by the members of this House.
Not by the Opposition.
Deputy Burke did not second this motion until he was authorised by the Minister for Finance to do it.
He was told to do it; he was not authorised.
He was told to do it.
Acting-Chairman
The point is that the motion has been seconded and isin order, and I ask the Deputy who is speaking to confine himself to it.
I am entitled to maintain at the outset that the motion would not be seconded were it not for the intervention of the Minister for Finance.
Acting-Chairman
I have referred the Deputy to the fact that it has been seconded. That is the only thing that concerns the Chair, and it should be the only thing which concerns the Deputy.
Now that it has been seconded, I believe that it serves a useful purpose in that it enables this House to discuss this system of valuations. Deputy Cogan's statement in support of his motion, to my mind, was a mass of contradictions. Personally, I am of opinion that there is a general need for a full revision of valuations in this country in every line of business. The present valuations on many properties are completely outdated and people are complaining that some people are paying out moneys that they do not justifiably owe because of the fact that other people who have improved their properties have not had their valuations proportionately increased. We know that it is only in the case of house valuations that revisions have been made, that no revisions have been made so far as land valuation is concerned.
We all know that money must be collected for public use and that there are two means by which that money can be collected — by taxation and by rates. I believe that the rating system is a very equitable way of collecting money for public use. While I am not sure of the figures, I believe that for every pound of money collected through the medium of rates there would be a sum of from £8 to £10 collected through the medium of taxation, or probably more. We hear more talk about the rates than we do about taxation, and I believe that that is due to the fact that the rates are collected directly from the people annually or by half-yearly instalments. These instalments, when they come to be paid, seem to the personpaying them to be very large and, definitely, in many cases they are very large and growing from day to day.
That is not the position, however, so far as taxation is concerned. We are paying money in taxation indirectly day by day and the present Minister for Finance has adopted many systems for taking money from the people without their actually knowing that they are paying it to him by indirect methods and underhand methods, which I believe would be the best way to describe it. One of the main reasons why Deputy Cogan has put down this motion is that he is very sympathetically disposed to people who pay large sums annually by way of rates to local authorities. These people who pay rates have also to pay taxes because it is the same people who pay both rates and taxes. I believe that the House cannot but agree that Deputy Cogan is insincere in proposing this motion because during my short term here Deputy Cogan has supported many measures directed at extracting money time and time again from those sections of the community about whom he professes to be so concerned to-day.
What has that to do with the motion?
With all due respect it is related to the motion because we are discussing the system of valuation and the method by which public authorities can continue to operate without further increasing valuations and rates. That is the contention advanced by Deputy Cogan. If money is not collected by way of rates, then it will have to be secured by way of taxation.
It is obvious that the method of revising valuations needs review. When a person improves his property it is only right and just that there should be some increase in his valuation because by improving his property he improves its market value and, if he is a businessman, he attracts new custom to his premises. It is only natural that if he attracts more business his neighbour, also engaged in business but without the capital to improve his premises, will suffer a reduction in his trade.
The principal objection to the present system of revising valuations is based on the method that is adopted. I have heard prominent people, including the present chairman of the Cork County Council, a former member of this House, assert that the officers carrying out these revised valuations have no practical experience of the work and no knowledge of the letting value of premises. Indeed in some cases such an exorbitant increase has taken place in valuations as 300 per cent. Naturally in such cases people are bound to object and that is why there is such an outcry at the moment against the present revision of valuations. The people feel that the revisions are altogether out of proportion to the amount of work done either by way of renovation or reconstruction.
I think the Department should instruct its officers to take into consideration in future when assessing the value of the work done the ability of the people to pay. That would be a much wiser course. People whose valuations have been revised have complained that no notice at all is taken of information supplied by those whose valuations are under revision. The officers appear to act completely and entirely on their own. We all know that they have not much knowledge of the business because in my constituency and throughout the country generally there are applicants coming before the Circuit Court judge every day seeking a reduction in their valuations and in some cases the increase in the valuations has been reduced by almost 100 per cent. I am sure everybody will agree that the Circuit Court judges are correct in their decisions. On that argument then it must be admitted that there are many people carrying out this work of revision who have not the necessary knowledge of the job.
I think it is unfair that people should have to go before the Circuit Court judge to have their grievance remedied. There is always the risk that an applicant may lose his case. If that happens he is faced with not only increased rates but very substantial legal costs as well. I think the legislation is framed for the benefit of lawyers andsolicitors because it plays into their hands. I cannot see why an applicant whose valuation has been exorbitantly increased could not make his appeal directly to the Department or to some kind of tribunal established by the Department sitting in different centres throughout the country. That would give an applicant an opportunity of airing his grievance without exposing him to the risk of heavy legal expenses. The present valuation system is a golden harvest so far as the legal section of the community is concerned. That section is definitely reaping its reward from it.
There are many people who are anxious for a general revision of valuations. I know people living on islands whose valuations are entirely out of proportion to the property they own. People living in such circumstances labour under grave disadvantages and they think that a revision of valuations would be definitely beneficial to them. I believe they are right in that.
One would think from the statements made by Deputy Cogan that the revision of valuations and the system whereby valuations can be increased is aimed at extracting money and imposing hardships on the ratepaying sections of the community. I am sure the Deputy knows very well that that assertion is completely incorrect. If a local authority has a valuation of £1,000,000 and if it requires for its operations over the year a sum of £1,000,000 all it has to do is strike a rate of £1 per £1 and in that way raise the necessary money. If, in the following year, the rateable valuation increases by £50,000 or by £100,000 and if the local authority again only requires £1,000,000 the people whose valuations were not revised will benefit because their rates will be reduced while those whose valuations were revised will have to pay more. A hardship on some will be a benefit to others if the valuation of a county increases since some, because of circumstances beyond their control, cannot improve their properties and will thereby benefit.
Deputy Cogan must agree that the county council will get its money irrespective of valuations because it will strike a rate sufficient to meet thedemand made. From that point of view there is no case to be made. Deputy Cogan also asserted that it would be advisable to have an abatement of rates on new houses for a period of 20 years. He subsequently asserted that people are becoming inclined to depend on the State for many of their requirements.
I do not know how Deputy Cogan relates the two assertions. On the one hand he states that those people, along with getting fairly substantial grants, should have to pay no rates for a period of 20 years. I do not know how Deputy Cogan ralates that with his assertion that the people are now looking to the State for everything and that there is no self-dependency whatsoever. I am as anxious as any other member of this House to see that people who build houses on their own should get every possible facility but I believe that if an abatement of rates was made, say, for a period of five, six or seven years, it would meet the situation quite well. I cannot see any reason for the suggestion made by Deputy Cogan except that it may be a fairly popular one and one that will go down throughout the country with people building new houses, that they should get an abatement of 20 years and that people who may not be in a position to build houses for themselves should pay for it.
The case made in support of the suggestion that there should be no revision of valuations when property is improved is that it is retarding progress and that it is deterring other people from improving their property. I do not think that assertion is correct. If a man progresses in life and is in a position to extend premises, surely such a person should be asked to pay more than his neighbour who probably, through circumstances beyond his control, through illness or through some other misfortunes, is not in a position to improve his property and cannot increase his income. Surely the man who increases his income and improves his property should be asked to pay a higher contribution than the man who is not in a position to do so.
The main reason why I spoke on thissubject at all was to air the opinions of the many people, in my constituency, at any rate, who claim that there should be a general revision of valuation. A number of these people, particularly those living in rather isolated areas—granted their valuations are not very high—are of opinion that if there was a general revision of rating, they would fare better and that their contribution to public funds would not be as high as it is at present.
I have a good deal of sympathy with one section of the community who are penalised more than any other section by the present system. They are the publicans. Deputy Cogan mentioned them in the course of his statement and he was very sympathetically disposed towards them. A number of them down in Cork have had to go to the Circuit Court to have the increased valuation revised and I believe that in all cases, without exception, they got them revised. I have sympathy with them also because their business is declining from day to day and it is declining due to the attitude of the present Minister who has imposed such heavy taxation on the goods they have to offer for sale that it is now impossible for the people to buy those goods.
I believe that some review should be made by the Department of the system by which the valuations are increased. I am asking the Minister to indicate, when he is replying, if those officers have a thorough knowledge of their work, so many of their decisions are reversed by the Circuit Court judge when application is made to him That is the main difficulty I see in Cork and I think it is very unfair that people who have a complaint should have to go before the Circuit Court judge to have it rectified. I do not propose to detain the House any longer. I am glad, however, that this matter has come before the House because it has given us an opportunity of going into this important question.
I am glad also to have the opportunity of bringing to the notice of the House some grievances in connection with the present system of valuations. I understand the valuation code as it exists here is 100 years old. There are many grievancesunder the law as it stands and I would be in favour of an approach to the whole question of valuations which would modernise the valuation law and also bring within its scope cases where hardships exist at the moment and also to expand it to meet other cases.
It is admitted that all over the country you have valuations which are too low. That is due to the fact that valuations have not taken place in some cases for a long number of years. On the other hand, there are valuations which are exorbitantly high. Like the income-tax office the valuation office acts with lightning speed and anywhere there is any improvement at all they are very quick to seize the opportunity of increasing the valuations.
One example will show where much improvement is required in the valuation law. I quote the case of the town of Buncrana in County Donegal. In that town the urban council, in order to improve the town and provide better facilities there, decided that some of the valuations there were too low and in order to get increased money for expenditure on the town they decided to seek revaluation. They found that was not possible but that it was possible to get 100 per cent. revision. They felt that by getting this revision injustices would be remedied, that evening-up would take place and that those whose valuations were very low would have them brought into line. It was also felt that in any cases where, as there were, exorbitant valuations existing, there would be a reduction.
The valuation Office acted very quickly on that and 100 per cent. revision was carried out. The result of that revision was that in no case was there a reduction and in some cases there were increases of valuation up to 150 per cent. and 200 per cent. The valuation of that town prior to the time that 100 per cent. revision took place was £7,000. After revision, the valuation stands at £11,000. That situation is bad enough but there is another aspect which makes it even worse. All the money collected from increased valuations is not spent on providing services to the town. There is a county-at-large charge; that is as well as providing services for the town, the urbancouncil must pay a sum based on valuation to the county council. That sum paid to the county council gives very little advantage to the urban council. It covers only charges like mental hospitals and other similar charges. Yet, the contribution from the urban council to the county council jumped from £2,000 to £4,000.
That means that the ratepayers of Buncrana are paying per head double the sum that ratepayers in any other town in the county or any other town in Ireland are paying. Further, there is no way, unless by a change in the laws of the State, to remedy that injustice. I have discussed the matter with several people and everybody admits that there is a grave injustice there inasmuch as the people of the town have to pay double the figure paid by people in any other town and for a very small service. They would not mind if the money collected in rates on the valuation of £11,000 were expended in the town but that is not the case. Due to the contribution which had to be made to the county council, the rate struck by the commissioner last year in Buncrana was 38/4 in the £. To provide the necessary services for the town, the services that will be provided this year, all the urban council would require to strike would be about 26/- in the £.
The motion deals with the question of valuation and not with the question of contributions to the county council.
I am just trying to point out how the present law operates. I am quoting this as one of the very grave injustices which can arise and for which there is no remedy under the law as it stands. Again, when people complain that their valuations are too high, somebody advises them: "Why not apply for a revision?" From the experience which people have gained as a result of making applications for a revision of valuation, I think nobody in this country will apply for a revision if he is wise because, in any case which I know of, when an application was made for revision, no revision took place.
Actually the opposite was the result, the valuation was increased. For instance in the town of Buncrana, a house which was built in 1949 was valued the year before the revision took place, and even in that case the valuation was increased by £6. I think there was no reason for that. In the year in which it was first valued, 1949, business was as good as it was in 1950 when the revision took place. As I say, nobody will ask for a revision in circumstances such as these. There are several farmers whose valuations are exorbitant. For instance, in my own place near the City of Derry, at the time the valuations were struck, the farmers in that area had the advantage of living in proximity to a fairly large city to which they could supply the produce of their farms— milk, butter, eggs, etc., and for that reason the valuations were fairly high, although in some cases the land was not too good. Now that the opportunity to supply produce to that city no longer exists, the farmers should, I think, seek revision of their valuations, but again it is a case where the experience of other people who sought revision of their valuations, prevents their doing so. In my view and in the view of many other people, the present system is bad, and not alone should it be revised and overhauled, but new regulations allowing greater flexibility to ratepayers should be introduced.
I agree that there should be an inquiry into the method by which rateable valuations are fixed at present. As the proposer of the motion mentioned, all sorts of anomalies exist. Hardships result from these anomalies and from the old-fashioned method of valuation followed in this country. If a man builds a house or a factory it is perfectly just that he should pay rates on a fair valuation, but what the citizen finds unjust is that if he erects a house, and perhaps a couple of years later decides that he should add a garage to it, he will find that his valuation will be increased when in fact if the garage had been built at the same time as the house, the valuation would very likely be no greater than that originally assessed on the house.
That is of course the sort of thing that it is impossible for an individual to prove but a comparison of the valuations of similar houses in various districts would tend to show that the charges levelled against the system of valuations are not unfounded. Similarly in the case of factories and business premises, when the building is erected a valuation is put upon it. Then after a few years small additions or alterations take place and up the valuation goes again. I know the difficulty which the Valuation Office officials are up against—at what point should they say: "No, we shall not charge extra for this improvement" or "Yes, we shall charge extra for that one." That is the difficulty in the present situation and as a result of it a premium is placed on inactivity, a premium which favours the individuals or businessmen who do not improve their premises. Many improvements are carried out in business which are to the benefit of the personnel employed in the business. In other words, the improvements may not be in any way connected with earning increased profits and yet an increased valuation will result from those improvements. Therefore, the industrialist who does not carry out improvements which, perhaps, are for the benefit of the staff is operating under cheaper conditions and is, therefore, in a position to make more money. The result is that a premium is being placed on inefficiency. Exactly the same result ensues in the case of an individual who does something to improve his house while his next-door neighbour does nothing. The community then is so much the poorer because decaying property is in effect being subsidised by this policy.
Another thing which comes out if one examines the question of valuation is somewhat similar to what Deputy Cunningham referred to in connection with the farmers outside Derry. Whole districts deteriorate in value and in fashion. We in the City of Dublin see a great deal of that happening. What were once fashionable and wealthy districts have become very poor but the valuations continue, in the main, to remain at the same high level as existed in the days of prosperity.There are districts in the Borough of Dublin where there used to be a number of small local authorities which have now been swept away and amalgamated either in the county or in the Borough of Dún Laoghaire or in the city. Every time a new house was built in their area these small municipalities were so delighted that they dashed along and put on a valuation which was largely based on the pocket of the individual who built the house. As a result, there are houses in South County Dublin which are valued at fantastically high valuations. They are quite out of all proportion to the size of the house and the district. These valuations were based principally, I think, on the amount the man who was building the house could pay and the fashionableness of the district.
Somebody referred to the question of revisions. I can tell the House that by and large the advice given by house agents and valuers—the people who are engaged in that trade—to their clients is that except for very, very good grounds revision is simply not worth while, that the cost will far outweigh the very trifling alleviations of valuation which they might get.
Deputy Murphy spoke earlier about the man who improved his property and said that he ought to be made pay more than the man next door who was too poor to do so. The valuations of houses are something which are not, and should not, be run on charitable lines. It has nothing to do with the capacity of the individual to pay. That argument to my mind is not valid. It does not necessarily follow that the man next door cannot afford to improve his property. He simply does not want to maintain his property in the way in which it ought to be maintained. Then the man who does spend money on his property is put in a bad position vis-à-visthe man who will not do it.
Very many alterations are carried out in and about business premises which are not so much in the nature of improvements as necessary alterations. I think it is undoubted that the system of valuation is one which is notin keeping with our present needs either as private individuals or as members of the business community.
It was all right 100 years ago when there was an idea that any change and improvement was something which was carried out by wealthy persons for their own private comfort or, indeed, luxurious indulgence. That was very largely the mentality 100 years ago and the same idea prevailed very largely in commercial life. It was not a time of change; it was a time when people said, and firmly believed, that what was good enough for their fathers was good enough for them and men who carried out alterations to their premises were very often held to have done so because they had been bitten by the building bug or for some other reason. It was not thought that building changes were necessary improvements. Nowadays, we live in an age in which, by virtue of social changes, people have to alter private houses. They have to carry out alterations on houses which were built to be run by a staff of servants in order to make it possible to live in these houses with perhaps no servants at all, and these changes which are carried out because of present-day social necessities have very often to be paid for in increased valuations.
We have exactly the same type of thing in business. We know now that if we are to keep our place in world industry and, indeed, in world farming, we need to be as up to date as possible. We need up-to-date machinery which must be housed in up-to-date premises, and if the man who provides himself with these premises is always to have his valuation increased when, in fact, he is not making any larger profit as a result of the changes—he is perhaps gaining only in efficiency— our system of valuation is placing an unnecessary yoke around the neck of our industrial and farming community.
I support this motion which says that an inquiry into the method of valuation and the whole circumstances surrounding it is very necessary, an inquiry which, I think, would bring about a change for the better. It is not altogether a question of increasing or decreasing valuations. It is a questionof making our system of valuation suit the needs of our twentieth-century life and not the needs of 100 years ago.
We have to ask our-selves——
Did the Deputy not speak already?
I formally seconded the motion, but I reserved my right to speak later.
I do not think the Deputy did reserve his right to do so.
He did.
I accept his word but I should like to see the record.
The Chair understood the Deputy to reserve his right to speak and for that reason the Chair has called on the Deputy.
Would you mind sending for the records, Sir, to satisfy us?
Surely the Chair can satisfy itself on that point without having to refer to the record or being advised by Deputy Sweetman?
I still ask if the Chair is satisfied that Deputy Burke did reserve his right.
The Chair made inquiries and is satisfied.
Very well.
We have to ask ourselves to-day whether the present system of valuation is just and equitable. That is the question facing us. We have heard a number of arguments for and against, both inside and outside the House. The State must get money by means of either direct or indirect taxation, but I want to ask if we are wise in having a valuation officer going around the country and, directly a person improves property, revaluing it, inside a week or a month. There are two schools of thought in regard to thisquestion. One is that the system deters certain people from improving their property. If we examine it and the examination leads us to the logical conclusion that it does, then it is time we revised the system. On the other hand, there is the industrious man who is anxious to get along in business and who improves his shop front or his dwelling because he has become more prosperous as the years passed. He will do that irrespective of any valuation.
It has been represented to me in my own constituency that directly enterprising people carry out certain improvements, their valuations are increased by from 20 to 30 per cent. and up to 100 and even 150 per cent. in certain cases. If the system is preventing people from improving their property, if it has that undesirable effect, we shall have to examine its implications. During the régime of the inter-Party Government, valuers went around the country—I do not know whether it was whispered to them directly or indirectly—and they revalued many business houses. A number of business houses in my constituency went up by at least 200 per cent. during the régime of that Government.
Business houses were making profits, which is more than they are doing now.
And Deputy Sweetman's Party decided they would make them pay for the profits they were making. A number of business houses were revalued and many business people complained about it because it meant that when the valuation of a licensed premises was increased, the E.S.B. charges were increased. In the town of Balbriggan, one business house went up in valuation by £150 per year. I have met a number of farmers who have complained that their land was dearer than other better land. Perhaps if Deputy Sweetman and Deputy Blowick finished their conversation, I might be able to continue.
Conversations should be carried on outside the Chamber.
I should like to hear the Deputy making a speech.
Would Deputy Blowick go to the bar and be silent?
The Minister has made that too expensive.
The Minister is a better customer of the bar than I am.
Deputy Blowick has been busy for the last few days cantering Tulyar in this House.
I would not like to see the Deputy on him.
Farmers have complained from time to time that the valuation of their farms is higher than that of their next-door neighbours. In some cases they asked for a revaluation, but found they were worse off then. That is one of the worst problems we have to face. People who are buying new houses are in many cases working people, struggling to get homes of their own, and they find these houses highly valued. They are paying a good deal for them, notwithstanding the grants. I am referring especially to that depressed type known as the white collar worker, who has only a fixed income and has to live up to it. We must ask ourselves are we fair and equitable in dealing with this matter in the way we are dealing with it to-day. As times change, we have to change, too, but it is unjust that we should bring old property up to the value of new property, and we must ask ourselves how we are to deal with that.
Are we logical in sending valuation officers round to improved properties, to revalue them immediately and increase the rates? The small businessman and the small farmer throughout the country find this happening regarding additions and outhouses, and they are all talking about this. If we can do something to encourage these people to improve their property we should do it, without having people coming immediately afterwards to revalue the property. That is one of the biggest national problems we have.
This motion offers an opportunity to Deputies to vent their feelings here. While we agree that there is need for examination of our whole valuation system, we must appreciate that it is a delicate subject which should be examined very carefully before changes are made. If we change the system there are people who would benefit, but there are also people who would suffer. Therefore, most Deputies would be reluctant to make any suggestion and the best thing that could be done would be to establish a commission of inquiry to consider all the details.
For the past four or five years and up to the present, the farming community have been pestered by the valuation office. Before that we were not accustomed to inspectors calling on farmers, but nowadays it is quite a natural thing to see them pulling up outside a farmhouse and, whether it be a hen-house, a dog kennel or a pigsty that has been erected, there is a tax placed immediately on it. The average farmer considers that that kills his incentive. For a hayshed 10/- is put on; for a shed for a cart, a plough and harrow, there is another 10/- and any repair you do around the farm is taxed. The farmers to-day are reluctant to undertake any reconstruction whatsoever, as these gentlemen from the valuation office are moving around the country placing extra valuations on these new outoffices.
It is not even necessary nowadays to put up a new building. I know a poor down-trodden farmer whose valuation was as low as 15/- on land and who had 10/- put on the outoffices; yet over 100 years there was not a single building put up on that small farm. I am glad the gentlemen concerned with that office are here in the House and I hope they will take some notice, as what I am saying is a fact down in County Mayo.
Is it in order to refer to officials, to persons who are not in the House?
I withdraw.
It is about time the Deputy learned manners.
I would like the Minister to bring it to their notice.
Certainly. That is in order.
Farmers who carried out no reconstruction on buildings or outoffices for the past 50 or 60 years fave found there is an increase of 10/- or £1 put on these buildings. I would like the Minister to realise that it kills initiative in the farming community. Agriculture is our principal industry and the backbone on which the whole nation hangs. When a farmer does reconstruction in one form or another, he now finds a new tax levied on him, followed by an increase in rates.
It may be argued that revenue must be got in some way, but revenue under that heading is an expensive item, as it is a deterrent to the farmer. I would ask the Minister to reconsider it, as the whole community is crying out. This has been taking place only in the past five or six years. Prior to that, the valuation authorities seemed to be partly asleep and were not as alert as they are at present. Over the past five years they have visited almost every single tenant-farmer in the West of Ireland and placed a new impost on them of from 5/- up, whether they carried out reconstruction or not. The idea of appeal is only a sham, because an appeal costs much more than the concession made arising out of the appeal. Therefore, farmers are reluctant to enter into litigation with the Valuation Office, because of the feeling as to what the result will be.
As regards small towns, I have had reason to bring to the notice of the Valuation Office on a few occasions increases of £9, £10, £14 and £15 for very minor repairs. One man was valued £9 for the installation of a toilet and bathroom. The building was there but he made an addition in height. He did not expand the ground area under buildings but put up this addition in height and his valuation went up £9. That occurred in a small, insignificant business in a small country village in the West of Ireland. I wonder could the Valuation Officejustify that? They could not, but if that man went into court he had no guarantee as to what the result would be. In nine cases out of ten, the justice might not side with the small man.
I should like to make it clear that while we appreciate that there may be a need for a new approach to this matter—I am sure Deputy Cogan will admit this — it may do as much harm as good. If we are going to have a new approach then I hope it will be brought about by a commission set up by the Government. On that commission I should like to see the farming community represented along with the business community. I realise that it can be a very unpopular thing for a Government to introduce a new valuation system, but at the same time it is better than the piecemeal approach which we are having at the moment. Deputy Blowick is as well aware as I am that, day after day, we get letters of complaint in this matter from small business people and small farmers. That is especially so now when we are experiencing a recession in trade, with business on the downward trend and taxation on the upward trend. Notwithstanding these difficulties, people find that if they carry out any modest repair they are heavily taxed. I appeal to the Minister, when he comes to address the House, to approach this matter on a non-political basis. I agree that he is, perhaps, in a very awkward and thankless position.
Never mind that. He is able for it.
Nevertheless, I recognise that it is not easily handled and that one can make good and bad friends in this matter. I welcome the discussion which Deputy Cogan's motion has afforded us this afternoon.
Mr. A. Byrne
I want to draw attention to the last two lines of the motion which read as follows: "... pending the report of the commission no increase should be made in valuation of building because of improvements or extensions." Only a week ago I put down a question on exactly the same lines. I suggested that should the owners ofproperty incur the responsibility of raising money in the banks at the very high rates of interest now operating, for the purpose of carrying out improvements to their property, they should get some concession for taking their courage in their hands and providing work for the building trade at a time when it was never more urgently needed. My object was to try and encourage certain Dublin firms and small business people who are anxious to repair, improve or maybe even extend their property and who give good employment at reasonable wages. The moment the work is completed there is the worry of the increase in valuation. As a previous speaker has pointed out, there is that worry even when the work does not involve an extension of the premises but just the improvement of accommodation for the workers there. The Minister who replied to my question stated that the owner of the property knows what he is doing — that he is extending or improving his premises for the purpose of bringing about increased business. That is not a proper way to put it. There are cases where a man must carry out repairs to his premises or else they will decay and eventually fall down. There are a dozen cases in the City of Dublin alone where handsome sums of money were spent on extending buildings and where subsequent returns revealed that the business did not improve at all. Because of some antiquated regulation, the owner of such property is faced with increased taxation without any corresponding improvement in business. If the Minister's view is that because a business improves to any extent, the valuation should be increased, then I say that that view will cripple industry.
It does not encourage people who desire to extend their premises and give good conditions of employment. If a man in the licensed trade improves his property in any way, the Valuation Commissioners come along and, to whatever extent they increase the valuation of his premises, up go his ordinary rates and taxes and, in addition, his licence fee is doubled if not trebled.
No it is not—only 50 per cent.
Mr. Byrne
Is that not penalising people who are giving good employment and who wish to extend their premises? I know of a man who installed improved toilet accommodation in his business premises. The valuation of his property was raised and he had to face increased taxation. The Government should not permit of an increase in valuation where the improvement is for the benefit of staff and not for the purpose of bringing about increased business.
Take the matter of repairs. If a man has a small shop window measuring, say, 4'× 4'——
That is an enlargement, not a repair.
Mr. Byrne
—— and he wants to enlarge it to, say, 6' × 6' or 12' × 12' in order to display his goods to better advantage, then, although the larger window may not bring any increased business to his establishment, the moment the window is enlarged his valuation is increased.
Window-dressing is very important.
Mr. Byrne
These things should not occur. The Minister should do everything in his power to encourage our people to improve and extend their property, where necessary.
A number of small building societies in this city build houses on which a loan under the Small Dwellings (Acquisition) Acts can be obtained—a loan spread over a 30-year period. The latest increase in the rates of interest on these loans will mean, in many cases, an extra 10/- or 12/- per week on the repayment of the loan. There is a scheme at Philipsburgh Avenue, Fairview. In that scheme houses which were built by the Dublin Corporation are occupied by tenant purchasers who are all citizens of Dublin with a wage probably not exceeding £10 a week. I move the adjournment of the debate.
Debate adjourned.
The Dáil adjourned at 2 p.m. until 2 p.m. on Wednesday, 4th March, 1953.