Committee on Finance. - Finance Bill, 1974: Committee Stage (Resumed).

Question again proposed: "That section 14 stand part of the Bill."

I regret that the Minister for Finance is not here as indeed he was not here when we came to the Bill earlier today. However, we will carry on in his absence.

Just before the House moved from the discussion of the Finance Bill we had been talking about section 14 and I was appalled by what the Minister had to say on that section. Deputy Sheridan and others had referred to the appalling losses farmers are in the course of sustaining during the present time and to the inevitable unprecedented drop in farm earnings that will come in the course of this financial year, and the only comment the Minister had to make in this regard was the favour that the Government had done the farmers by creating this situation of disastrous losses because the Minister said that farmers had this favour conferred on them which would enable them to claim on these losses when it comes to the payment of income tax.

The Minister also referred to all farmers, certainly to those who will come within his tax net this year, as a class of tax evaders. I think the expression he used was "devils".

I did not say farmers were, and the Deputy knows that.

That is what it sounded like over here.

No. I said the Opposition would have to chose whether they were on the side of people who were prepared to pay a fair share of tax or on the side of those who wanted to avoid payment of tax.

We never had any doubt in our mind where we stand on that, and the Minister at this late stage in the debate is trying to infer that we are against taxing farmers in a fair and equitable manner. Let us have that on the record for the rest of the evening and let us understand it.

I did not say that, and the speakers are not saying that either.

I think I alluded to this earlier. If I could continue in spite of the Minister's conversation. I thought I had made the farmer's position, as far as this party is concerned at any rate, fairly clear on an earlier amendment, but it seems necessary to refer to it again in the light of what the Minister said before the adjournment of the discussion. I am fully conscious of the fact that there are no farmers in the Government to advise them on these matters. We will do it for them. The farmers' attitude is that they make no claim to some special position which would put them above paying taxation that is levied upon everybody else. I hope the Minister understands that. What they object to, and what we object to here, is that they should be taxed unjustly as they are being in this Bill. This legislation borrows heavily from British practice but it differs from it very sharply in this regard, that rates on agricultural land are not levied in the United Kingdom or Northern Ireland but they are going to be under the Coalition Government. Farmers not only will share the common taxation that everybody else shares but they will also be expected to pay very high and increasingly high rates on their land on top of that, with one extraordinary exception, the people whom I referred to earlier as the nobility and the gentry. I put that in inverted commas, of course. They do happen to be as a class by far the best off people who live in rural Ireland—the bloodstock breeders. The Minister justifies exempting them from taxation on the grounds that if they are not exempted they can pack up their troubles and go somewhere else. With the greatest respect, this is a damn poor excuse for exempting these very wealthy people from taxation on their agricultural operations. It is tantamount to saying that the ones who can escape will be permitted to escape but the ones who by the nature of their occupation as working farmers cannot escape will not be allowed to escape by the Minister.

I fully appreciate the pathetic position of the National Coalition Government. Made up as it is of Dublin lawyers, university dons and Labour types of the more intellectual kind, the kind referred to one time by a Fine Gael front bencher in the last Dáil as the horny-handed sons of toil with the transport union pins in their coats, people like the Minister for Posts and Telegraphs, the head of the present Government. A collection of people like that could not reasonably be expected to know what is going on beyond the outer reaches of Ballyfermot. I should like to tell the Minister that there are a great many people out there who are waiting for the chance to remove these gentlemen from office. I am glad to see in recent times that the sorry set-up of which the Minister is part is coming apart at the seams of its own accord.

Farmers should not be stigmatised by the Minister or anybody else as people who are more likely than anybody else to attempt evasion. For my money, as a farmer, and a person who represents farmers, I feel they are as ready to pay a fair share of the national tax. The Minister should get that into his head but they are not agreeable to pay double taxation on their lands. This is what the Minister is proposing under the section, with the exception of the Taoiseach's friends, the people who are so wealthy that not only will they be exempt from taxation but if they are wealthy enough they will be made members of the Seanad.

I should like to take up the point raised by Deputy Gibbons. He is suggesting that people who will be liable to income tax or their farming profits will be subjected to two forms of tax which do not apply to other sections of the community. This, of course, is totally without foundation. It is now 14 years since the Commission on Income Taxation recommended that profits from farming be subjected to tax We should be thoroughly ashamed that it has taken 14 years since ther to implement that recommendation which was made by an impartial body of experts which received advice and representations from all sections of the community, including the farming community.

Those who have been in Government in the intervening period deserve to be chastised for their failure to have the courage necessary to introduce a system of taxation which apply to people who had profit from farming. It is an indication o their lack of moral courage that they did not do it during all those years There is no use in the people who failed to do it now saying that they are in favour of taxation of farming profit because they had 13 years in which to prove that they had the courage and that they believed in that but they did not do it. That is the test and not what they are saying now.

Even if we accept that there is a conversion let us see how sincere the professed conversion is. It is clear from their attitude today, and on the Second Stage of the Finance Bill, that they intend to obstruct our efforts to apply the taxation laws to farming profits.

In the way the Minister is doing it.

It seems to me that there cannot be a genuine conversion when their actions speak much louder than their words, when their obstructions are obviously intended to be more effective than their protestations. The truth is that they are on the horns of a dilemma. They know that the modifications of the tax code which we are suggesting will apply to only a very small fraction of the total farming community. They know that the vast majority of the Irish people are sick and tired of the privileges which certain people can enjoy in our community as a result of which they do not pay their fair share of tax.

I have met many farmers who have expressed their willingness to pay taxes; who have long since realised the total injustice of a system under which they were obliged to deduct PAYE from their labourer's pay packets while they, with incomes up to 20 times greater than their labourers, paid no tax at all. These people represent the decent farmers of this country and I believe they are in the majority in accepting that the time has come for them to be subjected to taxation laws the same as anybody else.

There is a certain argument advanced that rates on agricultural lands are more onerous than rates on commercial or industrial buildings. That is now not so. It was so in 1960 but it is not so in 1974. In 1974 rates on industrial and commercial buildings represent a higher percentage of profit than do rates on agricultural land.

Has the Minister any figures of rates on the kind of agricultural land that would be affected by the proposals in this Bill which is probably more relevant?

They vary greatly according to the valuations.

They vary from 8 per cent to 13 per cent.

They also vary from area to area. It is very difficult to get any figure which would be a norm, but even accepting that farmers in the higher brackets would pay more tax because they get less relief the truth of my assertion is still valid. Under the proposed system of taxation which we are bringing in farmers will be entitled to set off as an expense of farming the rates which they pay. That is the right of any person who is in a similar position and who has to pay rates in respect of their means of production, their office, their factory or their shop. The effective reduction in rates liability for the people who will be brought within the taxation net will be 35 per cent so that of the rates for which they are liable it is not a question of them having to pay 100 per cent of the rates liability, plus tax, but 65 per cent of the rates liability, plus tax.

It should be remembered that 77 per cent of the agricultural holdings in this country are totally exempt from rates. They pay no rates whatsoever. The balance receive reliefs which are not available to industry, to commerce or anybody else in any line of production. The comparison which must be made is not between this country and another country but between taxpayers in our society. If we want to bring in an equitable code it must be trimmed to the burdens which have to be borne in this country.

The situation in Northern Ireland and in Britain is not comparable because in Britain industrial properties are also virtually exempt from rates. That is not so here, and we would not be justified in giving the special exemption to the agricultural community if it was not enjoyed by industry and commerce in general. To have equity we must give the same concession of this exemption from rates to industry and commerce, and the result would be to throw a greater burden on the rest of the community either by way of paying tax or by paying an increased burden of rates. All the EEC countries have other forms of taxation in addition to income taxation of farmers with the exception of Britain. There are property taxes, land taxes, municipal taxes related to property values, and in no case is any exemption given because the farmers are liable to national income taxation. These are the realities of the situation which must be faced up to, and, having regard to these realities, it will be seen that there is no good reason to exempt the farming community from rates. If the farming community were to be exempted it would mean wiping away the £30 million at present paid on agricultural land. Of that, £27 million is paid by the general taxpayer towards the relief of rates on agricultural land and £30 million is what would be the cost of removing rates from agricultural land. In the light of the fact that that £30 million would have to be recovered elsewhere it will be seen that there could be no justification for the removal of rates from agricultural land.

On a point of order, the Minister is going into detail which, I think, is out of order because we are dealing with section 14 and not with the amendment tabled in the names of Deputy Colley and myself; it will be discussed at a later stage.

I shall be very happy to keep to the section and the amendments before the House but, if other Members raise matters in the course of the debate and I do not there and then reply to them, some people will not be playing the game according to the rules. If the rules are applied irretrievably I shall be only too happy.

We did not object to the Minister dealing with this until he started going into minute detail.

There was a fair bit of minute detail on that side too.

The Minister cannot expect that he will be allowed to proceed as he has been doing just because someone else broke some rules. If we are to have order, then let us have order. There is an amendment down in Deputy Colley's name and in my name and, if we are to discuss the amendment, let us discuss it now, if the Minister wants everything out of order.

We are on section 14.

I was trying to keep in touch with what was going on here and, between all the chopping and changing, it would take a wizard to know what was going on. What are we discussing?

Section 14.

We are discussing section 14. The Minister is discussing an amendment.

I understood we were on section 14.

I would appeal to all Members to confine their remarks to section 14.

Has the Minister finished?

I have replied to a point raised.

On section 14, as I understand it, the repeal of section 18 (2) (a) of the Finance Act, 1969, under section 14 means the repealing of the exemption farming profits enjoyed under that particular section of the 1969 Act. I understand stud fees are not being brought into the net but bloodstock farming as a whole is being brought into the net so there is just one single exemption. Any profits derived from bloodstock farming will be dealt with as per the provisions of various sections of this Bill.

I should like now to raise a particular matter in relation to which the Acting Chairman ruled I was out of order at an earlier point of time. The reason why I raised the matter at that particular point was because, if the Minister saw the light then, it would be better that he should see it at the beginning rather than half way through or towards the end, and the time saved could have been usefully used discussing other parts of the Minister's financial proposals and we could have then dealt with other business which must be completed before the Dáil goes into recess.

I shall now repeat, more elaborately and with perhaps more relevancy, what I said earlier. I repeat that this is a measure that should not now be introduced and I say that because of the harsh reality of the situation and not because of any carping political criticism. The farmers are hard hit in the cattle industry and they cannot be offered, even by the most optimistic member of the Government or anyone else, any hope that there will be any real improvement in their lot in the foreseeable future and the probability is that they will take a further beating before any light will be seen.

Progress reported; Committee to sit again.