(Cavan-Monaghan): If the Minister was serious about it he should be increasing the allowance and, if it was abolished, should be saying so instead of confirming here that it will not apply. I shall revert to the details of the Bill before I conclude but the Minister is thoroughly ashamed of this Bill and has every right to be so. He comes in here with it after 7 p.m. in the evening when he hopes it will receive no publicity but will be glossed over.
It is acknowledged that the rating system is unjust and has been condemened over the years by people who took an interest in it on the basis that the system of collecting revenue through rates does not have any regard to the income or capacity of the ratepayer to pay. That is the view my party have taken of the system of rates for several years and I hope to show that we have acted accordingly. The Fianna Fáil Party, now in Government, have had different views about rates and rating systems from time to time. As I hope to show from a short history going back to 1972, they appear to find it very difficult to make up their minds in regard to rates. Therefore it is not surprising that they introduce this Bill this evening, the result of which will be to increase the rates—assuming a rate of £10.21p in the £—from £331.82p or 77 per cent on a poor law valuation of £75 to as high as £408.40p, or 66? per cent on a poor law valuation of £100 this year.
As from 1 January next—assuming an increased rate in accordance with the Minister's guidelines and a rate next years of £11.23 in the £—the rates will be increased from £314.44p, or 87 per cent in the case of a farmer with a poor law valuation of £60, to as high as £449.20p, or 66? per cent in the case of a farmer with a poor law valuation of £100. And these increases will take place whether or not the farmer is liable to income tax.
The Minister and his advisers know perfectly well that many farmers with a valuation above the threshold will not be liable to income tax for one reason or another. In the case of farmers who are not making a profit and who produce accounts they will be exempt from tax. Yet they will have to pay this savage increase in rates imposed by this Bill. If they rely on the notional system of paying income tax I want to put on the record that many farmers—because they are married, have a number of qualified children and, in addition, are paying contractors' fees, employing labour, paying bank interest—will not be liable to income tax yet will have their rates substantially increased. That is the position for this year. Next year the position will be even worse because the threshold will be £60, unless the Minister has been told by his colleague, the Minister for Finance, that he proposes to put up the multiplier next year from 90 to well above 100. If the multiplier is left at 90 great numbers of farmers who are married men with the commitments. I have mentioned already will not be liable to income tax on a threshold of £60. Yet the Minister for the Environment will do the dirty work for his colleague, the Minister for Finance, and ensure that this savage increase in rates is extracted from the agricultural community without any regard to the ability of that community to pay or to meet family commitments.
I said I would like to give a brief history of the approach of the Fianna Fáil Party over the past few years to rates. It is right that it should go on the record. In December 1972 the Fianna Fáil Government laid a publication, Local Finance and Taxation, before both Houses and in that publication they committed themselves: without qualification to the rating system as the only system for financing local government. The reference is page 10, chapter 4, paragraph 421. They said that only the local rate satisfies the criteria referred to and the real issue is not the abolition of the rating system but the reform of the system so as to eliminate undoubted defects. They were not talking about rate reliefs. They were talking about closing gaps and doing away with grants so that they would extract the last penny by way of rates. They were committed to continuing the old, unjust system of local taxation without regard to the capacity of the ratepayer to pay and without regard to his income.
That was December 1972. On 3 January 1973 the Taoiseach, without apparently having communicated with his party in advance, called a general election. The National Coalition parties, Fine Gael and Labour, having considered the question of rates and realising the hardship the rating system was imposing on all sections put before the people in that election their policy to remove the health charges and housing subsidies from the rates. They put that clearly before the people as one of their 14 points. They realised the system was unjust and inequitable and, as a step towards abolishing rates altogether, they proposed to remove the health charges and the housing subsidies from the rates. As we know, the National Coalition implemented that promise and during the four-and-a-half difficult years they were in office they kept the rates several pounds lower than they would have been if the health charges and housing subsidies had not been removed from the rates.
What was the reaction of the Fianna Fáil Party in February 1973? They went into the election campaign brandishing this document, Local Finance and Taxation, ridiculing the proposal of the Fine Gael and Labour Parties to reduce the rates as a first step towards abolishing them. They said the proposal was pie in the sky. They said it could not be done. It would bankrupt the country because the money could not be found. It would remove discretion from local authorities and vest it in the Custom House. Towards the end of the campaign they stopped. They thought. They did a right about turn. They ditched Local Finance and Taxation which they had solemnly laid before both Houses two months previously. They threw it into the wastepaper basket. They said they would go one better. They would abolish rates on private houses.
Fianna Fáil made this turn about without telling the present Minister for Justice because, while the present think-tank here in Dublin was churning out a policy to go one better and abolish rates completely on private houses, Deputy Collins was down in West Limerick churning out 1,000,000 circulars ridiculing the proposal of the National Coalition Parties to abolish rates. With a record and a history like that is it any wonder we now have a Bill like this?
We have fortunately further information about the thinking and the promises of the Fianna Fáil Party now in regard to rates on agricultural land. The Taoiseach, speaking in this House as Leader of the Opposition on the Financial Statement on 4 April 1974, was advocating extension of the relief of rates on private houses to agricultural land if income tax for farmers was to continue. He said a good case could be made for derating agricultural land completely. He practically wept for the farmers, At column 1515 of the Official Report of 4 April 1974 he stated:
In making that point,——
that was a point against income tax
——they indicate that rates are already a heavy imposition on many of them, especially the progressive ones. Therefore, there would now be a much stronger case to extend the Fianna Fáil policy of relieving homes, to relieving agricultural land from rates, if the incidence of income tax is going to bear more heavily on farmers as time goes on. It has been pointed out—and I think the point has been well taken—that farmers are the only producers whose means of production would be subject to income taxation. Another point which I think has been well taken is that about 50 per cent of their output, 50 per cent of their product, goes for export, whereas those in industrial production enjoy complete freedom of taxation from profits deriving from those industrial exports. This is a point the Minister will have to take into account—obviously he has not done so at this stage—in order to ensure that fair taxation will be applied across the board.
If that quotation means anything it means that not alone was the Taoiseach advocating the abolition of rates on agricultural land but he was also leading farmers to believe that income tax should not be proceeded with, that they should be tax free because they were engaged in an export business. In the light of that, could anything be more disreputable or dishonest than the Bill before the House?
No doubt the Minister will make the case that the Bill will not involve any additional imposition on farmers. He will tell the House that they can deduct it from their income tax. I would remind the House that there is no such provision in this Bill. The Bill simply states that the agricultural grant will go and that the rates will be increased to the extent I mentioned. I say without fear of contradiction that many of the 22,500 farmers will be brought into the income tax net by this Bill. According to the budget statement of the Minister for Finance the number of farmers with a valuation in excess of £60 is 22,500 approximately. Many of them keep books and are not making a profit that would bring them into the income tax net. If they produce accounts to show they are not liable for tax they will not have to pay income tax but they will be responsible for this huge increase in the rates brought about by this measure. Many of the farmers who work on the notional system of 90 times the PLV of £75 this year—I have a suspicion that system will be more than 90 times next year—will not be liable for income tax because of family circumstances, commitments and liabilities. However, the Minister for the Environment is going to do the dirty work of the Minister for Finance in extracting this large amount of money from the farmers.
I question the bona fides of the Minister for the Environment. I want to put it to the test in this matter. If he tells us it affects only farmers who have income tax to pay in excess of the increase brought about by this Bill, is he prepared to amend the Bill on Committee Stage? Is he prepared to write into it a subsection that will ensure that only farmers who have income tax to pay will suffer this increase in rates? Will he ensure that unless farmers are liable for income tax for an amount exceeding the increase in rates brought about by this Bill he will not extract the increase from them? He need not come to the House and tell us that it is meant only for farmers who are liable for income tax unless he undertakes now to write such a safeguard into the Bill on Committee Stage. I invite him to deal with that point when replying to the debate.
I do not think the enormity of the measures has hit the farming community yet. From speaking to some farmers I know they think it is only the agricultural grant that affects the portion of their PLV in excess of £75 or £60 that will be affected. I want to warn them that once their PLV exceeds £75 this year every penny of grants to which they were previously entitled will go. The primary and supplementary grants will go and they will not get any allowance. They will pay the full rate from the first £ of their valuation to the last £. I do not think that is generally realised by the farming community. I want to put it on the record of this House and I invite the Minister to contradict me if I am wrong. I am satisfied that what I have said is right.
I also believe that this is a move towards abolishing the agricultural grant altogether and towards consolidating rates on farmers notwithstanding the fact that Fianna Fáil canvassed during the general election last year on the basis that all people had to do was to return Fianna Fáil to office to see the end of farmers' taxation. In their very first budget they reduced the threshold from £75 to £60 and they increased the multiplier from £65 to £90, a nice performance from the party who went as the Taoiseach wept on 4 April 1974 about the treatment the National Coalition were meting out to farmers, a nice performance by that Taoiseach having regard to his performance in this House on 4 April 1974.
It will be noted that in this Bill they have taken care of the agricultural grant not only for 1978 but also for 1979. This is the thin end of the wedge, the tip of the iceberg. It will not be long until the agricultural grant is reduced to £50 and to £40, and then it will be gone altogether. Is that the Minister's intention, or can we have an assurance from him, that there will be no further reduction in this grant?
I have given a brief history of the Fianna Fáil Party's record on rates from 1972 to the last election. They issued the now famous manifesto and, in the immortal words of one Fianna Fáil Deputy, it will go down in history. I do not think there is any doubt about that, but how it will go down in history is another question, and what will be written about it is another question, Fair play to it, it dealt with rates and agricultural taxation. The manifesto has a paragraph dealing with rates. Under the heading of local government it dealt with rates at some length but it did not say a word about abolishing the agricultural grant. It dealt with all the nice things they would do for the private householders. It said they would be looked after and that rates would go as from January 1978, and go they did.
One would have thought the Fianna Fáil Party would have given their entire proposals on rates when they thought it fit to put in black and white this substantial paragraph in their manifesto. When I read that it occurred to me that I had better check to see if they had said something about it when they were dealing with farmers' taxation. It would be equally relevant there. I turned to another part of the manifesto and I found a whole page dealing with farmers' taxation. They said what they would do and how much would be saved by this and that proposal by Fianna Fáil on farmers' taxation and income tax. But I did not find one word about their proposal to abolish the agricultural grant and to extract between £300 and £600 from farmers who might not be liable to rates at all.
Then I thought the Fianna Fáil Party might have decided to put only the goodies into the manifesto and leave out the baddies. I wondered did they mislead anybody, and sure enough they did. In the last line of the part of the manifesto dealing with rates they said tax payments will fall due at the end of each financial year. I want to charge the Minister with dishonesty in that regard. That line is sheer dishonesty because not only did it say nothing about his proposals in this Bill to withdraw agricultural relief but it led farmers to believe they could go merrily along until the end of each financial year without being asked for one penny in income tax, and now he trots in here with this Bill increasing rates by abolishing the agricultural grant under the pretence that this is part of their income tax. They will be asked to pay six months, if not more, before the end of the year. Is the Minister not ashamed of that performance in the light of the manifesto?
It is no wonder Fianna Fáil want to hear the end of the manifesto and that they think it is being laboured too much. It is an historic document according to Deputy Leydon and we must have regard to it. So much for that. When the Fianna Fáil Party told town dwellers and owners of private houses they would relieve them of rates they did not tell them at the same time that they would ask the farmers—and I will be relevant shortly—