Deputy de Valera has referred to the magnificent performance in producing so quickly the Bill as amended in Committee. Unfortunately, it was not possible for him to congratulate the Minister on the speed with which the Bill was produced originally. While it is legitimate for the Minister to refer to the statutory constraints which apply to us in regard to the passing of this Bill and to the difficulties we face, nevertheless it is not giving the complete picture if reference is not made to the fact that there was an inordinate delay in producing this Bill in the first instance. I was obliged on a few occasions to raise the question in this House and to advert to the dangers of having to rush it through at the end, as we have had to do in the past in the case of Finance Bills, or when we had to sit all night and still were not able to deal adequately with it because it was not produced in time.
As the Minister knows, last year the statutory provisions were changed and extra time was given during which the Finance Bill might be passed. If that had not been done, if we had been operating this year on the statutory provisions under which we have operated for many years, then we would have been two days late for the passing of the Second Stage on the date on which this Bill was produced. There were other delays subsequently. Let us keep in perspective what was the cause of this pressure on us in dealing with the Bill. I submit the major cause of the pressure is delay in producing the Bill and in producing the amendments the Minister announced he was going to introduce.
It is unfortunate that there were important aspects of the Bill we did not get the opportunity to discuss. In particular, I should like to refer to the increase in what is commonly called the road tax on motor vehicles. This has been savage and unjust, particularly as it has been applied to cars already owned. I do not know if the Minister is aware of it, but in many cases following the Minister's announcement in the budget many people have care that overnight were reduced in value by something in the region of £1,000. I do not think this was either justified or necessary. If the increase in rates of duty which the Minister announced were necessary— and many people would question this —there is no reason why they should not have been applied to newly registered cars. If that had been done, at least one could say that if a person chose a car subject to that duty he was doing it with his eyes open and he knew what he was letting himself in for. However if a rate of duty is introduced which has the effect overnight of reducing cars in value perhaps by £1,000 as happened in many cases, the Minister has an obligation to look again at what he is doing and to see if it is necessary and justified. I submit that in that case it was neither necessary nor justified.
Another matter we did not get an opportunity of discussing was the proposal incorporated in this Bill now as part of the law to take away from farmers the refund of 1 per cent to which they had heretofore been entitled as compensation for the value-added tax they paid out on their inputs into farming. I can recall when introducing VAT originally that this figure was higher. Speaking from recollection, I think it was 3 per cent because the VAT was being applied to a wider range of the farmers' inputs than was decided eventually. We managed to avoid that on certain items and thereby to reduce the figure to 1 per cent. It is very important that what is involved here is understood.
Farmers are engaged in business but, because of the nature of their business and their sales, it is extremely difficult to treat them in the same way as other businesses and allow them to recover the value-added tax they pay on their raw materials the business inputs they have. In any other business the trader is entitled to recover the value-added tax he has paid out so that ultimately it is the consumer who pays the net VAT. There is a difficulty in the case of the farmer but this was met reasonably well by working out an average figure that would apply to the average farmer. It worked out at 1 per cent and the farmer was getting this refund.
In addition to the various other things the Minister has been doing some of which have been quite damaging to agriculture, we have this proposal which we did not get an opportunity of discussing of taking away this 1 per cent refund. Whatever reasons might be advanced on a practical level for doing this—I am not aware of them but there may be some —one thing there cannot be any dispute about is that it is wrong in principle under VAT to take this away. What it is doing, in effect, is that it is treating the farmer as the ultimate consumer in the same way as the person who buys in a shop from the retailer is the consumer. It is treating him that way in regard to the items he is using as part of his raw material in the whole process of farming. Whatever reasons may be advanced on a practical level for doing this there is no justification whatever in principle. If this is justified in principle under VAT then there are all sorts of other steps which may be justified in future but which will totally defeat the whole principle of VAT and return us to a form of sales tax. That can have serious consequences for the Revenue and for our contributions and assessments of what we receive from the EEC. I have not time to develop that but I am concerned at this departure from the basic principle of VAT which is also damaging to farmers and which is taking away something which was worked out when we introduced VAT as a fair method of recompensing to farmers the VAT they were paying out on their raw materials.
We have dealt with the other aspects of the Bill as well as we could in the time available—the various income tax provisions and, of course, the pretty savage impositions in regard to beer, spirits and petrol. We have extracted from the Minister the information that the increases in all these items have been in the region of or well beyond 100 per cent since the Government took office. The increases would be extremely serious at the best of times but they have added to them the ignominy of occurring under the regime of a Government who came into power pledged to halt price rises and stabilise prices.
The VAT increases across the board were serious in their own import but more serious in so far as they have contributed this year to the highest rate of inflation in the world of any developed country with the consequent serious repercussions on national pay agreements negotiations. That in turn has serious repercussions on the Government's need for further money to finance the ordinary running of the State which will bring the Government back here squeezing even more any possible area of revenue and stifling even further any chances of growth and entrepreneurial skill that may still be left here. The approach which says: "There is a loophole there; we will close it by affecting everybody," is very common from this Minister and is well exemplified in this Bill.
We touched on one aspect of that a short time ago in relation to the introduction of the concept of continuous liability for tax on motor vehicles, whether one is using them or not, whether they are laid up or not. This is the same approach. We have seen and discussed at considerable length the implications of the abolition of exemption from taxation of the activities of agriculture and fishery co-operatives in so far as they are exempt at present. Of course, many of their activities are not exempt at all. In so far as many of their activities were obtaining exemption and, in the Minister's view, should not have been, the right approach of the Minister would have been to bring in proposals for extending their liability to tax in respect of those activities. The Minister adopted his usual method of the blunt instrument ignoring the consequences for employment, particularly, the key question here today. The net effect of that proposal, and other proposals in the Bill, will be to reduce employment where the Minister should be straining every nerve to increase employment in any way possible. The creation of one job should be vital to the Minister for Finance today whereas it is a question of these measures causing the disappearance of thousands of jobs if one takes all of the provisions and their effect on our economy together.
It is unfortunate that this country at this time should be subjected to the blind and ignorant, in the economic sense, ministrations of this Government. The alternative to that is to assume they are malevolent. I am not prepared to make that assumption. One can only assume that such steps and such results come from sheer economic ignorance. It is sad that this country at this crucial time should have to go through this ordeal with this kind of economic ignorance predominating. However, it will not be for long.
There is a very difficult task ahead of the next Government but it is not insuperable. It can be done and it will be done. This country will be got moving and we will get growth back into our economy. We will get the kind of economy in which it will be possible to achieve real equity, not paper equity in taxation by reducing the level all round but real equity and real equity involves the opportunity for people to get a job. A situation in which people cannot get a job is not equitable. This Bill will not contribute to the creation of a situation in which people can get a job. On the contrary, it will clearly contribute to the situation in which more and more people are losing their employment. I can only hope that in the near future the opportunity will be given to the people to express their verdict on what is in this Bill and on the general performance of the Government. I have no doubt about the result of that verdict.