Dáil Éireann debate -
Wednesday, 12 Apr 1978

Vol. 305 No. 4

Rates on Agricultural Land (Relief) Bill, 1978: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. McMahon

As I said last week, it was rather surprising that we did not have some contributions from Fianna Fáil backbenchers on this Bill as we have had on other measures that have gone through the House since the election. It was with a fanfare of trumpets that the measures to date were announced, but we seem to have come up against a wall of silence on the Government side of the House in respect of this Bill. That is no wonder because on examination and consideration the effects the Bill will have not only on those directly concerned, those who will be called on to pay the enormous increases, but on the purse of every housewife, are beginning to sink in. It matters not whether you are a country dweller, although many would say that only those in agricultural areas will be affected: that is not so because this is a removal of an indirect food subsidy and the removal of any food subsidy affects every housewife. I shall come back to that later.

I want to put on record first a few examples of how the food producing people will be affected. I think it is unusual for a Minister to introduce a Bill without giving some examples of how it will affect whatever section of the community it is directed towards. I have examples of a number of holdings in county Dublin. The first has a land valuation of £107.50 and a building valuation of £30, a total of £137.50. Last year this man was called on to pay total rates of £1,055, less 25 per cent on the rates on the dwellings and buildings which amounted to £78.75. That represented a first instalment of rates reduction which the National Coalition had embarked on to phase out rates over a number of years. That left a bill for this holding of £921.80. This year, because of the introduction of this Bill, on the same valuation the total rates will be £1,601.88 which, with a Government subsidy of £349.50, will leave the bill at £1,252.38, an increase of £330.58 or 35.86 per cent. I ask the Minister to compare this with the 11 per cent increase imposed on the country as a whole. That was on a holding of 95 acres, not a big ranch.

In an example of a similar type of holding, with a land valuation of £144 and £22 on the buildings, the rates bill in that case was £1,000 on the land and £250 on the buildings, a total bill of £1,250. In 1978, this man's bill will be £1,700, a net increase of 35 per cent or £450.

It is important that some examples should be put on record here seeing that the Minister omitted to do so in introducing the Bill. On another holding of 73 acres, which I suppose would be an average holding in this very important food producing section of the community, with a land valuation of £84 and a building valuation of £16, in 1977 the rates bill was £680.75, less the 25 per cent on the buildings under the scheme introduced by the National Coalition, £42, leaving a total rates bill of £638.75. As a result of this measure now going through the House the rates on that holding will be £1,165, less the Government allowance on the buildings of £186.40, leaving this man with a bill of £978.60 or an increase of £330.85, which is 53.21 per cent. Compare this with the 11 per cent for the remainder of the ratepayers of the country.

A further holding, not large, 82 acres, barely enough for a man to get a living and to rear his family from, has a valuation of £81.75 on land and £9.50 on buildings. His last year's rates were £595.96 less the 25 per cent on buildings, leaving a balance of £571.02. As a result of this measure again the total bill here will be £1,063.07 less the portion which the Government will pay on the buildings of £110.68, leaving a total bill for the occupier to pay of £952.39, an increase of £381.37 or 66.79 per cent. I ask the Minister to compare this with the 11 per cent for the remainder of ratepayers.

These are by no means the worst cases. They are cases which I have picked at random, and indeed I go on to give an instance where benefit will be brought to land-holders and food producers in the country as a result of this measure this year. Those are the holdings under £75 but over £60 valuation. One such holding in County Dublin with a land valuation of £66.50 and buildings £9.50 means that the rate bill last year was £483.82 less the Government subsidy of £24.94, leaving a bill to pay £458.88. As a result of the Government abolishing the rates on private dwellings the bill this year will be £537.09 less the Government subsidy in this case of £110.68, leaving a bill to be paid of £426.41. This farmer comes out of it quite well this time because he has a reduction of 7.08 per cent, but when the second part of this Bill is implemented and the allowance is reduced on valuations over £60 how will he fare out then? I suppose I should make some allowance for an increase in rates, which would be normal, because I cannot remember a year when Fianna Fáil were in office when we had a reduction in rates. At this year's figure, the amount in this case when he is affected by this Bill will be £885.41 less the Government subsidy on the dwelling of £110.68, leaving him with a total bill of £774.73. This is an increase of £81.69, and this is again an average farm. He has 85 acres. He is not a large land-holder, not a rancher, but one of this large body of hardworking food-producing farmers.

I believe that this increase will have to be passed on to the consumer, and there is no point in the Minister saying to me or to this House, "He can have an allowance on income tax and we are giving him an allowance on other expenses as far as income tax is concerned". This is a bill that will have to be paid whether or not there is an income or profit. You do not pay income tax unless you can show a profit. However, it is not unusual to have a year of loss in the farming industry, and even though they might have a year of loss this section of the community will have to meet this bill. I have not seen anything about provision for an easing of payment of bills in hard years or when this section might come into a bad time because of weather or for many other reasons. Therefore it is a bill that will have to be paid and I have no doubt the farming community will be pressing their various organisations to have an increase in prices of foodstuffs in order to pay it. Can you imagine a person earning a living on 85 acres of land, rearing a family of five or six children and having to pay an increase of 81.69 per cent on his rates? Have we ever had an increase of this nature before in any commodity in any section? I doubt if the Minister can give me an instance where we have an 81.69 per cent increase. And this is not a rancher. It is not even a person with £70 or £80 valuation. I am speaking of a man with £66.50 land valuation who will be expected, when he is affected by this Bill, to pay an increase of 81.69 per cent.

How can the Minister justify this increase, He has said to all other ratepayers, "No more than 11 per cent". He can instruct other local authorities throughout the country to confine their increases to 11 per cent. I have no doubt that this increase and the hardships it will bring are not going to be confined to the farming community, and that is why I have come into this House to speak about it. I am greatly surprised that we have not at least an occasional voice from the Fianna Fáil benches to highlight what is happening here. I warn the Minister that when they go home to their various constituencies over the weekend and when they will mix with the people at Mass or socialising they will get the message.

Can the Minister tell what effect this is going to have on food prices? We are entitled to know. I am absolutely surprised that we have had no indication from the Minister when introducing this Bill as to the effect it is going to have other than to relieve the Government of having to pay out £7.5 million, in other words the amount the Government will save.

It is interesting to compare this amount with the amount of wealth tax paid to the Exchequer last year, something in the region of £8 million. That is approximately the same figure as the Government are saving by this measure. Assuming the farming community, and this is a fair assumption, paid half that wealth tax—and I doubt if they did because there are many other wealthy people in the country who are not food producers—are the Government now recouping on the double in rates what they lost through the wealth tax? It is fair to assume that farmers paid no more than £3.5 million or even £3 million of the wealth tax collected last year. Here the Government are extracting £7.5 million from farmers in lieu of the loss of the wealth tax. If that is not a con job, then I am not an Irishman.

Is it the Government's intention to extend this increase to other ratepayers, such as shopkeepers, factory owners and owners of business premises, in an effort to recoup the entire rates on domestic dwellings? If that is so we are entitled to know. Is this the thin end of the wedge? Are shops, factories and business premises in for the same treatment? Are they to have a similar increase? If so, I believe there will be an outcry.

I am surprised that some of the farming organisations have not to this hour given their comments on this Bill. I wonder do they realise what is happening. Do they realise that an increase of over 80 per cent will be expected from the smaller food producers? If so, then it is their duty to make known the views of these people. Those who must still pay rates are being asked to pay not an 11 per cent increase but in many instances an increase of over 80 per cent, despite the impression given by Fianna Fáil before the election that these people could expect some relief. It was widely made known that these people would not have to pay rates on their buildings and dwellings. Why were they not told that their land would have to pay the extra rates, and more? Why were they not told that this indirect food subsidy was being removed? There is no doubt the people have been conned.

As I said, the effect of this is not going to be felt only by those directly mentioned in the Bill—those with land valuations of over £70 in the first instance and over £60 in the second instance—but it will be felt in every home because there is little doubt that the people living on these holdings will have to pass on these increases. They must have been living in the lap of luxury to date if they can afford to pay this increase without looking for an increase for their produce.

I want to make a comparison with similar holdings in the six northeastern counties. In the case of the examples I have given of similar sized holdings the rates are from £30 to £35 to £100 to £140 and certainly no more than £150. Their land is not rated; only the buildings are rated according to age. I have spoken to some northern farmers with moderate holdings. At the weekend one of these men told me that his rates bill—and he has over 200 acres of land—is only £37. It is as low as that because he is living in an old dwelling. If he were to build a new house his rates bill would be drastically increased, but even so it would be only £100 to maybe £140 and certainly no more than £150.

Are we not putting our farmers and food producers at a tremendous disadvantage when they are trying to compete with their neighbours across the border who have only to pay one-tenth of the rates bill here? Is it not encouraging more smuggling of foodstuffs and livestock across the Border? I do not know what it is legal to take across the Border today or what it is necessary to smuggle, but I know a fair amount of smuggling has gone on for many years and this will increase that trade. Consider the difference in the rates bills of two farmers living within a mile of each other on either side of the Border. Does such a difference not put our farmers at a distinct disadvantage when they are trying to market their produce. It would appear the Government are determined to increase that difference instead of bringing the two parts of the country into line with each other?

I have given examples of people with moderate holdings but I can give an example of a larger holding of 260 acres in County Dublin with a land valuation of £240.75 and a buildings valuation of £18. That person's rate bill last year was £1,854.34 less a Government subsidy of 25 per cent on the buildings of £46.26, leaving him with a total bill to pay of £1,807.08. Under this Bill his rates will be £3,014.44, less the entire rate on the buildings of £209.70, leaving him with a total bill of £2,804.74. Compare this with his bill of last year of £1,807.08 and the difference is 51.25 per cent. That is going into the larger bracket, and by the figures I have given the Minister can see that the effect of the Bill will be far greater on the smaller holding than on the larger holding. Is he now transferring the amount of money that was paid last year in wealth tax to farmers with much smaller holdings who are much less able to bear it? With a farm of 268 acres the increase will be 51.25 per cent, that particular holding having a land valuation of £240.75, as compared with the farm of 85 acres and a valuation of £66.50. When such a farmer is affected by the Bill it will be 81.69 per cent. This clearly shows that the effect will be far greater on the farmer with the smaller holding who is less able to provide for his family and to bear the cost of the increase and he will be more determined to pass on the increase to the consumer.

This is my great concern. It will not be felt immediately and will not be felt at all this year because a farmer will not be obliged to pay full rates until the end of the year. Even then he can stand the expense for a short while. He may not press for the increase in food prices until this time next year but it is certain that there will be an increase in food prices as a result of this measure. Deputy Fitzpatrick made the case last week that never in the history of this House was the title of a Bill so deceptive. It cannot even be described as an increase in rates. It should be described as an increase in food prices or the removal of a food subsidy.

It is unfortunate that we should see so many empty benches on the other side of the House. Two Deputies on the back benches of the Government party broke ranks last week and overlooked what they were instructed to do, that is, to stay out of this House while the Bill was going through. I invite some of the other backbenchers to come in before the end of the debate and to let us hear what they have to say about this measure. What about the Minister for Agriculture? Has he anything to say about it? Does he know that the Bill is going through the House? Was he present at the Government meeting when the decision was made that this Bill should be introduced? What about the Minister for Industry, Commerce and Energy? Has he anything to say about the removal of the food subsidy and the subsequent increase in food prices? I would welcome a contribution from either or both of these Ministers, as well as from the Fianna Fáil backbenchers.

More will be said about this measure. It will be talked about in 12 months' time and in two years' time when it will be having its full impact, not on the farming community but on the housewives when they go out shopping. They will have to pay this increase and I am extremely disappointed that this Minister should have taken such a hand in conning the people. I should like him to tell us, when replying to the debate, if it is the intention to extend this to shopkeepers, to the factories and to commercial buildings. I have a suspicion that there is another Bill on the way to recoup the loss of the rates. Rates are not abolished; they are being paid by the Government and not by the occupiers of domestic dwellings and the effect of this has been to throw the Custom House into a state of dire confusion. I would go so far as to say that because of the slowness in the transfer of money from central funds to local authorities many jobs are now threatened. The sum of £1.6 million has been paid to Dublin County Council in lieu of domestic rates. That is about one-tenth of the bill for the entire year. That has been paid in almost three-and-a-half months, going well into the fourth month. If that is the treatment local authorities are to be given I am afraid jobs will be in jeopardy because local authorities will not be able to carry out their programmes.

I hope the Minister has taken heed of what was said here last week and what will be said today, but a little weight might be added to the debate if we could have an occasional Fianna Fáil contribution. As the debate proceeds, I will be watching eagerly to see if we would get a contribution from the Fianna Fáil benches. I suppose the Minister is having good sport and that the instruction has been: "Do not show your face on this Bill." That is denying half of this House the democratic right to speak. It is a backward step for any party to put such a muzzle on its members and I hope some members will rebel against it.

Mr. E. Collins

There is no doubt the Minister tried to slide this Bill through the Dáil. The explanatory memorandum is brief, as was the Minister's introductory speech. The Bill itself is a short one which one might not regard as being very important. It is a Bill which will bear heavily on farmers not only large farmers but all viable farmers as defined by the Land Commission. Next year it will affect all farms with valuations of more than £60.

We have been told that the saving this year will be £7 million while the valuation threshold is at £75, and in my estimation the saving next year, when the £60 valuation threshold will apply, will be something like £27 million. That is a heavier sledge hammer on farmers than even the new income tax policy which increases the multiplier to 90 and reduces the threshold to £75. The new form of taxation which this Bill represents must be paid by farmers whether they are earning a profit or not and therefore the Bill is a harsher taxation measure than the new system of farm income tax.

I doubt if farming interests yet realise that this is a Bill with such savage effects. If the threshold is to be reduced further in future legislation, say to £50 or even £40 valuations, we will be going very far backwards in relation to taxation policy on farmers. As a means of taxation, rates have been condemned by Fine Gael but never by Fianna Fáil who not so many years ago issued a White Paper suggesting that rates could not be abolished. At that time a couple of elections ago, I remember Deputy Gerry Collins was embarrassed in Limerick when his war lords in Dublin did a somersault.

This time, they decided to abolish rates on domestic dwellings, and of course that went a long way towards winning them the last general election. However, the cost of that election victory remains to be gauged. The last budget permitted a deficit of £400 million on capital account and there is a danger that this will run the country into financial ruin, because it must be paid for. Coming towards the end of Fianna Fáil's first year in office the coffers are bare and next year or the year after the gallop will be stopped because the finance masters in Europe will put a stop to it.

This Bill is one of a series of measures introduced to try to remedy the deficit situation. If ever there was a misnomer it is "The Rates on Agricultural Land (Relief) Bill, 1977" because this Bill imposes extra taxation on medium type farmers and perhaps next year on small farmers. VAT is being imposed on livestock sales, food subsidies have been withdrawn and the ban on heifers going into intervention has been announced. They are all forms of taxation on farmers. The withdrawal of heifers from intervention at a time when it is too late to put them in calf means that farmers will not have a guaranteed outlet.

An Ceann Comhairle

These are not matters relevant to the Bill.

Mr. E. Collins

I am merely listing them as a series of taxation measures affecting farmers. I will not expand on that. In relation to agriculture generally, with the change of Government it is astonishing how substantially the attitude to farmers has changed, this Bill being a perfect example of that. Deputy Clinton, while Minister for Agriculture, brought farmers through a prosperous period from 1973 to 1977. It is peculiar that the new Minister, Deputy Gibbons, is not cutting any ice in Brussels. He is not getting the same increases and has not the same strong voice as the former Minister. A series of legislative measures and actions by the Government have hit the farmers since Fianna Fáil came into office. There is no doubt that there will not be an increase in prosperity in the farming community in the years ahead. That is evident when you consider the price increases for this year under the common agricultural policy. The outlook for farmers is not good because we have a weak Minister in Brussels and a Government that are prepared to beg, borrow and steal taxation from any quarter because they are short of money, and at present the sledgehammer has fallen on the farmers.

Looking at the overall situation, it is a pity that there is not an agreed taxation policy for the farming community. It was a mistake that the farming organisations did not meet with previous Ministers for the purpose of setting out an overall strategy for taxing the farming community, a strategy which would be understood by all and acceptable to the farmers themselves who freely admit that they should pay their fair share of tax.

In relation to this legislation, I thought that the move to tax farmers' incomes would lead to the gradual abolition of rates on agricultural land, which is the system in England. The Taoiseach himself spoke in that vein on 4 April 1974. Deputy Fitzpatrick from Cavan, Fine Gael spokesman on this Bill, quoted him correctly in his speech and I have no wish to repeat it, but the Taoiseach did speak in this way on 4 April 1974. It is this double talk which will eventually lead Fianna Fáil into trouble and I believe they are already in trouble this year, which is only the first of four years.

The Government said that the abolition of rates on domestic dwellings would not be recouped by the imposition of, or by an increase in, rates on other types of property. That was the clear statement of the Minister when the question was raised of striking the rate for the current year. The Minister and the Government are going back on their word in that respect because in this Bill they are increasing the rates on agricultural land on medium-size farms. This is another piece of duplicity when one considers the way in which Fianna Fáil operate. I remember the position the Minister took during the debate before the striking of the last rate. This Bill negates the Minister's position in relation to the abolition of domestic rates and his clear undertaking that the loss of revenue from domestic rates would not be recouped by other increases in rates.

How much will the implementation of the proposals in this Bill cost the farmer? There will be no relief for farmers once they reach the threshold and I hope they understand that. Previously where there was a relief of rates up to the threshold and a farmer with a £60 valuation, at a rate of £11 in the £, would have been paying £331, taking into account the reliefs. That is now being increased to £660, a doubling of the rates bill. One could say that the farmers will be paying double rates from next year if they have a valuation of £60 or more, irrespective of whether they earn profits. Even though I understand that the rates are deductible in part-payment of the income tax liability, nevertheless there are many farmers with £60 valuations who, because of their personal allowances, allowable expenses and so on, will not be subject to income tax Fianna Fáil are getting around the situation by saying: "We do not mind if you do not pay income tax because you can still pay your rates; we will still get money out of you."

The farming community have gone through the last four years in better shape than many industries and I believe that the farmers should pay their fair share of taxation. The way in which Fianna Fáil are going about getting money from the farmers is by the use of what is accepted as regressive taxation. A rates bill has always been considered a regressive taxation policy. It has been condemned on a number of occasion as being bad policy and is an instrument which cannot be used equitably to levy taxation, yet Fianna Fáil are using it. There is no doubt in my mind that the reason for this Bill and the other recent impositions on farmers is that the Government have run out of money and will take every measure possible to get money from everybody. They are going after the farming community who, as has often been said, are the backbone of the country. Their contribution to the export drive must be fully acknowledged. Their contribution towards increasing agricultural based industry is vital to our prosperity and to employment.

It is important that we evolve a fair system of taxation and that we allow every possible incentive to farmers to increase their investment and their production and also to avail of the many markets abroad for suitable commodities which they produce. This Bill, as well as the other impositions on farmers' incomes, which Fianna Fáil have levied in the past few months, is a retrograde step. There is no overall policy in relation to the taxation of the agricultural community. It is surely time for the Minister for Finance and the Taoiseach to sit around the table with representatives of the agricultural bodies and hammer out an overall taxation policy. Any industry will not expand and will not feel secure unless it knows the direction in which it is going in the short term and in relation to what type of taxation policy it will meet in the near future.

The three-year accounts period which the Government introduced in the budget has been unsettling for farmers because they do not know where they are going unless they know exactly the level of taxation in the three-year period. That was a serious omission in the budget. I ask the Minister to reconsider this Bill and I ask the Government to meet the farmers, sit down and establish an overall strategy in relation to the taxation of the farming community. A taxation policy should be established which is fair and allows expansion and above all allows confidence in the agricultural community in relation to its future.

The Bill is another step on the way to completely shattering the confidence of farmers in the Government and to completely shattering their confidence with regard to what will in effect be their net disposable income in the future. This Bill should be condemned because it is using the rates system again. It is regressive and it will now hit small farmers and medium-type farmers irrespective of their profits. It is bad strategy in relation to taxation and I condemn it.

Mr. Griffin

I, like Members on this side of the House, wish to raise my voice in objection to the introduction of this Bill. Its very title is misleading. It is a complete misnomer to entitle this Bill Rates on Agricultural Land (Relief) Bill; 1978. That title is dishonest. We have heard of poetic licence but this is carrying parliamentary licence to a ridiculous degree. More suitable titles for this Bill would be The Non-Abatement of Rates on Agricultural Land Bill, 1978, Rates on Agricultural Land (Extension) Bill, 1978 or Rates on Agricultural Land (Imposition) Bill, 1978. Any of the titles I have mentioned would be more honest titles for this Bill.

I would like, so that the Minister may be fully aware of the feelings of farmers, particularly the farming community and the agricultural community of South Tipperary whom I represent, to bring home to him the true feelings of these people. I object vehemently to the introduction of this Bill. The Minister should be under no illusion about how this Bill has been received in South Tipperary. Quite a number of the farming community at the moment are not fully aware of its implications. Some of those who are aware of its implications have told me that it is completely unacceptable to them.

There was no mention at all in the manifesto document of this increase in rates. The South Tipperary farmers were led to believe that when Fianna Fáil came into office all their tax problems and all their rating problems would come to an end and they were about to enter into a utopia, a Tir na nÓg. This Bill is one of the many pieces of legislation which has shattered that illusion. The farmers in South Tipperary are wide awake and fully realise they have been sold down the river by the Fianna Fáil Government.

This Bill affects 1,009 farmers in South Tipperary. That is the number of agricultural holdings of £75 valuation and over. Next year, with lowering the valuation to £60, a further 400 farmers will be involved. That makes a total of approximately 1,409 farmers in South Tipperary who are affected by this Bill. They are expected this year to pay £471,000 to the Exchequer. That averages at approximately £470 per farmer, which is very near to the national average of £466, being levied on every one of the 15,000 who are involved in this.

The farmers in South Tipperary believe that this extra £470 each is their contribution to the abolition of wealth tax. I had sympathy for some of the farmers who had to pay wealth tax but I had no sympathy for those who deserted the country when they were asked to make a small contribution to the national coffers by way of wealth tax. They went away to sunny climates and when the coast is clear, having no doubt made adequate contributions to the Fianna Fáil funds for the abolition of wealth tax, they now return to bask in the Irish sunshine having for the last few years basked in the Mediterranean sunshine.

The imposition in this Bill lies very heavily on areas in South Tipperary where the land is very highly rated. A farmer need only have approximately 30 Irish acres to be caught under this Bill. The land in certain areas is rated at £2.50 per Irish acre and a farmer with a small holding of 30 Irish acres will now be asked to pay £728.25 this year in rates. Next year, with the expected increase of 11 per cent, he will be asked to pay an extra 11 per cent on top of that figure. This system is based on the land valuation system. The Minister must surely be aware, as all the farming organisations are aware, that this system of rateable valuation is unjust. The Minister and his advisers, rather than introducing this system further into our rating code, should be looking at a way to remove it completely from the statute book.

Those with £75 valuation are being asked to pay approximately £315 extra each. Those with £100 valuation in South Tipperary will be asked to pay £387 more this year. These are not big farms. Perhaps in certain areas where the rateable valuation is very low these would be sizeable farms, but not in South Tipperary, where the rateable valuation per acre is about £2.50 per acre. Farmers are expected to pay this increase while the Minister for Agriculture is negotiating for a 2 per cent increase for farmers, and the industrial workers have been granted an 8 per cent increase. This 2 per cent increase will be swallowed up immediately by increased costs. Our Minister is negotiating for a 2 per cent and another Minister is extracting £7 million from the farmers.

This Bill is a further instance of the anti-farm legislation that has been introduced by Fianna Fáil since they took office. In the budget there was an announcement that the thresholds would be lowered for income tax purposes this year from £75 to £60, that the multiplier system would be increased from the existing 65 to 90 and that the farmers who wanted the multiplier system would have to opt for a three-year period. Since this Government took office the consumer subsidy on cheese was removed consequently increasing the cost of cheese by 10p per lb. This affects the farming community indirectly as people are being discouraged from buying cheese. A further anti-farming piece of legislation was introduced in the VAT Amendment Bill, 1977.

An Leas-Cheann Comhairle

We are only discussing rates on agricultural land in this Bill. We cannot go over the whole field of farming. The Deputy will get an opportunity for that on the Estimates.

Mr. Griffin

I do not wish to be in conflict with the Chair. I am only bringing to the Minister's notice the anti-farming legislation that has been introduced since they took office. I am concerned at the ability of farmers to pay their rates and I am outlining these details, so that when the Minister is replying he may amend this legislation taking into account the anti-farming legislation that has already been introduced. I am fearful that with the 2 per cent increase being sought by our Minister they will not be in a position to pay this increased demand. There is also the 10 per cent VAT on AI services and agricultural contractors whose earnings are over £1,800. There is also a 10 per cent VAT on admission to agricultural shows and fairs. To the farming community this is a further extension of anti-farming legislation. As a Deputy representing a strong agricultural community in South Tipperary it is my duty to bring these facts to the attention of the Minister so that if we are not successful in bringing improvements into this Bill the Minister and his Cabinet may be deterred from introducing further legislation to take money out of the farmers' pockets. This money is badly needed for the development of farms. The fertiliser subsidy was also withdrawn. This takes £4 million that could be put effectively into land and buildings from the farmer's pocket. The withdrawal of this subsidy means that small farmers will have to pay a minimum of £30 extra this year for fertiliser and the larger farmers will have to pay something in the region of £300 extra and this is at a time when the phosphate usage of fertiliser is only at about one-third of the desired level.

The imposition of these rates had been successfully resisted by the National Coalition when in office. I was told that the Department officials trotted out this Bill annually to the then Minister but he in his wisdom resisted it, because he saw the value of these concessions to the agricultural community. It is amazing that the present Minister should willingly accept this system. It is too simple and facile a way to collect £7 million from the farmers; there are no forms to be filled in, no accounts to be kept, and no multiplier system. The Minister, perhaps with the prodding of the Minister for Finance, has acquiesced at last to the demands of his officials in his Department.

An Leas-Cheann Comhairle

The Deputy should not introduce the officials. The Minister is completely responsible for the decisions of his Department.

Mr. Griffin

Surely the Minister has advisors who advise him. The Minister has accepted the advice of his advisors and has imposed this further taxation on the farming community. The Minister in his speech said that the only change from the existing arrangements was that farmers whose land had a valuation which equalled or exceeded income tax thresholds for full-time farmers would no longer benefit from the rates relief on agricultural land. By implication the Minister stated that the taking of £7 million, the further involvement of 15,000 farmers in this Bill is a small change, a casual approach to the taking of this £7 million. The Minister stated that the rates can be accepted as a first instalment of income tax. In a lot of cases that is true but not in all. I know of farmers in South Tipperary with small acreages of perhaps 30 acres who would not be liable for income taxation, so they cannot avail of this as a first instalment of income tax. Now they have to pay £728 this year, an increase of £351 on what they paid last year. To them this is of no benefit. The Minister also stated that the rates on dwelling houses and out-offices have been removed. That is in common with the urban dwellers but as the Minister knows the rates on the dwelling houses and out-offices were a very small fraction of the overall rates. I urge the Minister, before replying, to have further consultations with his advisors, and in view of the importance of agriculture to the economy they should come up with a more enlightened and original approach to the taxation of farmers. The farmers have accepted the principle of taxation. They are prepared to pay their fair share of the tax bill, but they always stressed that anything based on rates is inequitable. Surely the poor law valuation system should be systematically phased out rather than be incorporated into the system, ensuring that in ensuing years no attempt will be made to abolish rates completely. The Minister has allowed a sliding rule in the income tax system especially for those farmers with holdings of over £75 valuation. Perhaps the Minister could ensure that farmers with a valuation of, say, between £75 and £100 would not be liable to full rates on this occasion but rather be dealt with on a sliding scale. Perhaps farmers with valuations of, say, £100, £90, £85 or £80 would pay one-tenth, two-tenths, three-tenths or whatever is the proper apportionment under the income tax code.

This Bill is totally unacceptable to the farming community who are sorely disappointed that, since the present Government assumed office, one repressive Bill after another, particularly in relation to the farming community, has been introduced. They are disenchanted and disillusioned. I have no doubt but that when the new rates demand notes are issued they will give good voice to their objections. Perhaps the Minister might yet save the day if, in his reply, he would state that he is allowing some concession particularly to smaller farmers. In certain parts of the country a holding valuation of £75 denotes that a farmer has quite an extensive holding but, as I have pointed out in certain areas of south Tipperary, where land valuation is approximately £2.50 per Irish acre, a person there with a small holding of 30 Irish acres is immediately liable and, next year when it will be reduced further to £60, 400 farmers with yet smaller holdings still in Tipperary will be caught.

I am disappointed with the Bill. It does nothing to encourage the farming community to plough back moneys into their land, to develop further, especially in a year when, according to the Minister for Agriculture, the farming community will receive a meagre increase of 2 per cent for their produce. One might add that the increases were always limited but the former Minister, Deputy Clinton, never accepted the limitations placed by Europe and went out and fought for higher ones. I would urge the present Minister for Agriculture and Fisheries—in an effort to enable Irish farmers to meet the increased costs incorporated in this Bill —to fight for higher increases, something in the region of 8 per cent to 10 per cent which were fought for and obtained by his illustrious predecessor.

Mr. Crotty

I am not surprised at the introduction of this Bill, one to raise further taxation amounting to £7 million. We all know the Government need extra funds for certain reliefs given, very beneficial reliefs to certain sections of the community and the wherewithal to replace these funds must be provided.

On the face of it one might think this was a Bill that would pass through the House in a matter of minutes but this party have taken the right line in prolonging the debate on it to show that it is retrograde legislation. My main concern is that it is the first retrograde step regarding the rating system of this century. I shall not deal with the inequities and so on of the rating system; they are well known. I am disappointed that it appears that the only time Fianna Fáil are concerned about rates, in bringing about an equitable rating system or, as I would hope to see implemented in the not too distant future, the cessation of the rating system and the provision of a proper local tax structure, is at election time. As was mentioned in the debate last week, in 1971 we got the true concept of Fianna Fáil thinking on the rating system when a report was commissioned which reported to the Government of the time that the rating system must be retained and that, in the foreseeable future, no changes could be envisaged in the system. The Government adopted that report, took it to their hearts. They said: "This is what must happen and we will give it our full blessing;" in other words, that rates must continue on the scale that had obtained up to that time.

There was a local government election in 1973 when we got the first real breath of fresh air as regards a change in the rating system proposed by the Coalition side of the House, when they promised that, if returned to office, certain changes would be implemented. These changes were introduced and, as a result, have benefited the people liable to rates to a great extent over the past number of years. During their election campaign Fianna Fáil realised that the people who had been forgotten about—that is the people who paid rates whether they were in cottages, were industrialists or living in mansions—felt very strongly about them. Before the end of that election campaign they changed their tune and actually upped the action proposed by the Coalition and proposed that all rates be taken off private housing. As we know, they were not elected on that promise but they had to carry this promise through to the last election. Fair play: they made the promise again and, on being elected, carried out their promise of taking rates off private dwellings.

One would imagine that, having been given the lead in thinking as regards the rating system we might have some progressive thinking on the situation henceforth. But here we are taking a step backwards—in other words, we are taking relief from people who benefited heretofore. The Government may be trying to placate urban dwellers. They will get £7 million from farmers with valuations of £75 and, while that may antagonise the farmers, the urban dwellers will be quite happy. That is not the kind of thinking in good Government. The whole rating system should be given serious consideration with a view to devising as soon as possible an equitable system. Any step taken now should be a step in that direction and not this retrograde step. I appeal to the Minister to amend the Bill if he is not prepared to withdraw it. If he does not amend it the result will be moving backwards in our taxation system.

It is argued that these rates will represent income tax and this is a concession that only the farming community will enjoy. Why did the Minister introduce the Bill if the purpose is not to collect increased taxation? It is the farmer who will be hit, not the business man, the professional man or the industrialist. The farmer who is making a profit will get the allowance but the farmer who is not making a profit will pay the full rate. How can a man who is not making a profit meet such a payment? This Bill will double the charge on the £75 valuation farmer. That will mean an increase of about £400 in rates. The person least able to pay will be asked to double his contribution. Would it be possible to carry forward the liability into succeeding years because the farmer will not get the benefit in the year in question if he does not make a profit? It is only right that he should be allowed to carry forward against future income tax payments.

It is disheartening to see a Bill of this nature introduced here. The thinking of the Government seems to be that they must get more money to bolster up the Exchequer. What will they look at next? This is—it must be —of great concern to all. Industrialists and the business man who improves his premises can seek a revaluation but the farmer is not in that position. Those who make a profit and those who can spend their money on luxuries should carry the burden. We should not tax the primary producers. It is essential that the £75 valuation farmer should become more efficient to enable him to compete with his counterparts in the EEC and elsewhere. Australia and New Zealand have very progressive farmers who are looking for markets in the EEC. We do not want these markets opened up to them. They had these markets in the past and they could get them again. The danger is we might not be able to compete.

I understand that farmers in other EEC countries do not pay rates. Not alone have our farmers to pay rates yet the system is being extended. I am disappointed that no Government Deputies have seen fit to speak on this Bill. It will certainly affect farmers in the Carlow-Kilkenny constituency. Next year the figure will be reduced to £60 valuation and the possibility is that at some time in the future the allowances will be removed completely by the present Government because the members of that Government have no conscience and no proper concept with regard to rates. We must warn the people about their long-term objective because they are certainly taking a backward step here.

The people should be warned. The smallest farmer will have to pay a high rate charge by the end of the term of office of this Government. In certain parts of County Kilkenny a man with a farm of ten or 15 acres may have a valuation of £20 and if this allowance is taken from him he may be required to pay £200 in rates. That is not equitable but it is a prospect that faces such a farmer in the coming years. The rate charge will increase each year because the Government have no intention of changing or improving the system. This is a retrograde measure and it will put a brake on all sectors of the economy, commercial, business and farming.

It is essential that we encourage the farming community in particular to produce more goods. In my county we have the Avonmore Creameries, a large food processing factory and they are continually requesting increased supplies. This Bill is just the tip of the iceberg. It has been introduced by the Government in their first year of office but what will they introduce in the next four or five years? This Government have a majority of 24 and they will run their full term of office. They will bring in whatever legislation they wish irrespective of the views of any section of the community.

With regard to the food processing situation, Avonmore produce butter and cheese. The Government recently removed the subsidy from cheese——

An Leas-Cheann Comhairle

The Deputy is getting away from the Bill before the House. We cannot discuss the food processing industry on this Bill.

Mr. Crotty

I am sorry. The Government are not helping the food processing industry. Avonmore Creameries require all the support they can get. Recently they have gone into the cheese business and the drastic increase of 10p will not help the sale of that product.

The purpose of this Bill is to get £7 million for the Exchequer. In his reply perhaps the Minister will state clearly why the Bill was introduced. He should tell the House why people will have to pay extra money. I do not think he can state it is an allowable charge for income tax. During the election campaign when Fianna Fáil speakers announced that rates would not be charged on private houses, on the houses of the farming community and on outbuildings, they stated that no other rating system would be brought in to replace the existing scheme. We can fairly say that Fianna Fáil have reneged on that promise. That is another reason why the Minister should have second thoughts about this Bill and withdraw it. The Minister should engage in constructive thinking on the rating system. I think he would like to do that. I know he is in charge of a large Department and he may be overburdened with work, but I would commend him to study the rating system. I do not say he can change the whole system overnight but he could bring about some major changes in the method of raising rates.

The man who does not make a profit is the person who will be hit by this Bill because he will not be able to offset his charges against any other item. The person who makes a profit and who puts his money into improving a large house will have the advantage of not having to pay any rates on his investment but the man who re-invests his money in the productive end of his farming enterprise and who gets an allowance for his investment against his income tax will not get any benefit from this Bill. In fact, he will come out at the worst end of it.

This is a mini-budget. In fact, we have had a mini-budget every second week since Fianna Fáil took office. The fertiliser subsidy was removed, putting another £7 million into the Exchequer. The subsidy on cheese was removed. That will have a more drastic effect than the amount of money actually involved because it will hit the industry and it will hit employment. It is very relevant to this Bill because employment, especially youth employment, is one of the top priorities here and in many other countries. It is being given more thought than any other aspect of living. We are all aware about how concerned the Minister for Labour is about the problem. The Minister for the Environment should have discussions with that Minister in connection with this Bill which is a disincentive to those engaged in the food processing industry anxious to create jobs. Our share of the British food processing market has been reduced drastically and this Bill will not help that situation. We should do everything possible to create more jobs. One way of doing that is to give reliefs in rates to those who employ extra people. There is not much point in giving such people a miserly sum, as was done some years ago. The Minister for Agriculture has not helped the situation by debarring heifers from intervention.

An Leas-Cheann Comhairle

We are getting away from the Bill again. I have given the Deputy a lot of latitude but he should remember that the Bill deals with agricultural rates only.

Mr. Crotty

I accept that I have strayed from the Bill but it is important that I stress the other implications involved. The thinking behind the Bill is wrong, it is a backward step when we should be going forward. I want to assure the Minister that we will give him every support for any change he wishes to make in the Bill if it is forward looking as far as rates are concerned. The Minister has got off to a bad start with regard to rates. He should drastically amend the Bill. We are now getting a mini-budget every second week as far as the agricultural community are concerned and that does not surprise me because the money must be found somewhere. However, the Government should not take retrograde steps in their efforts to get that money. We are anxious that the farming community produce more to help our economy but the Government are compelling them to pay more in rates. I cannot understand why the weak person should be the one to bear this extra burden. I cannot understand why the rates should be doubled on the person who does not make a profit and I do not think anybody can give an explanation for that move.

Many small shopkeepers spend sleepless nights before the rate collector calls because they are not in a position to pay him. Rates are also a major worry for small business concerns and small industries because they wonder if it will be their turn next. The Government should carry on the thinking of the National Coalition who gave a lead in this regard. Small shopkeepers are under enough pressure from big organisations who are in a position to buy in bulk without having to face the problem of rates. The Government make the rules and they should not be putting pressure on small shopkeepers. Nobody, including the farmers, object to paying a fair share towards the cost of running the State, but those who do not make a profit should not be asked to pay such taxes as rates. A lot of criticism has been levelled at farmers and farming organisations recently. Those organisations accept that farmers should pay their fair share. Farmers are happy to pay out of their profits but I agree with them when they contend that they should not have to pay if they do not make a profit.

During the election campaign the Fianna Fáil canvassers, from the Taoiseach down, gave the impression that if they were returned to office taxation on the farming community would be drastically reduced. It does not appear like that now because taxation is being increased every week. The farming community were misled by Fianna Fáil during the election campaign. Fianna Fáil for many years now have spoken against the rating system and some members suggested that because 50 per cent of the production of farmers was exported they should be given the same concessions as industrial exporters with regard to rates.

The Government have made an about turn from that type of thinking. I wonder if they have studied this Bill. Do they know what it is about? Or, are they only concerned in misleading certain sections of the community so as to get themselves back into office? This is the impression we get on this side of the House. I hope this is not their thinking, that we shall see progressive thinking and that we shall have amendments to the Bill on Committee Stage.

Mr. Clinton

I intend to make a few comments on the Bill because I am amazed that neither the farmers who will be affected by it nor the organisations that normally concern themselves with the welfare of farmers and farming seem yet to be alert to what is happening or understand the purpose of the Bill. The purpose of the Bill is simply to extract a further £7 million from the farmers—an extra £25 million when we count up the various subsidies that have been removed by the Government that went out at election time and dangled these carrots in front of the farmers. There was to be no more taxation; they would have all the subsidies in the world and all sorts of new schemes. This is one of the Bills being brought in to recover the cost of the carrots dangled before the farmers in the election campaign to secure their votes by false pretences.

The Minister for the Environment explains the purpose of the Bill here and tells us he had to bring it in because the legislation providing relief of rates for farmers had run out last December: he had to rush to their assistance with this legislation. But that is not the purpose and I am surprised that the Minister wanted to pretend that it was: its purpose is to get easy money and the Department of Finance, better than any other Department, know how to get easy money. This requires no collection; you have only to put out your claw and pull in the money. That is why it is being done, not because it is an equitable or just tax—it is neither one nor the other and the Minister knows that. In the case of farmers affected by it, it simply pushes up their rates anything from 65 per cent to 80 per cent. Next year the figure will be higher and will cover more farmers; that had to be specified in the course of explaining the contents of the Bill.

Why do we do these things? Why do we take money from where it is easiest to take it? The Minister knows better than most people that the valuations on which he is working are 200 years old and bear no relationship to the present value of land. Those who will pay the extra £7 million are greatly over-valued, people with large families or commitments and who normally would not pay income tax and therefore are not in a position to claw anything back. The Minister knows that and I can understand his shame in being forced to come in here by the Minister for Finance and by the Government who never cared about the farmers. They pretended to care, and they did care for the few weeks of the election campaign, but immediately it was over and they had secured support they came back with legislation eroding any benefits and aids that had been left to agriculture.

Since we joined the EEC a great effort was made in Europe to get an exact assessment of the aids to agriculture in the various countries for the purpose of either abolishing national aids altogether or putting them on level terms. They got all that information; they extracted it assiduously from us. But the action taken was nil and the present Minister does not seem to be doing anything about it. It was discovered that the Germans had five times as much national aid as we had and in the circumstances where a member state had five times more than we had we continued to erode these benefits here and we continue to pretend that it is due to EEC pressure. It is nothing of the sort because the pressure should be exerted where the national aid is so much higher. This is merely an easy opportunity to extract more money from farmers and from a section that very often is not in a position to pay or should not be asked to pay because of the circumstances there. Personally, while I had some responsibility for this sort of thing, I was concerned about valuation and the unfair and inequitable aspects of it. I spoke to those responsible for evaluating soil and assessing the ability of certain land areas to produce certain crops and achieve certain production. I asked them how far they had got with the task of land assessment. They said that if they got 80 people for five years they would be able to complete the work and to provide an up-to-date and proper valuation for our land. That is what the Government should be thinking about. They talk of providing employment; there is an opportunity to employ 80 or 100 people and get an equitable valuation. They should not be bringing in legislation to rob people who should not be robbed in advance of having this proper valuation.

I am appalled that this legislation means, for a certain number of people who will be required to pay it, an increase of 65 per cent to 80 per cent in their rates. Next year it will be a 65 per cent to 90 per cent increase. Across the Border there are no rates on agricultural land.

No less a person than the Taoiseach seriously says that we have reached a point where serious consideration should be given to total de-rating. If we had total de-rating everybody would know who was paying a fair share of tax but we have this mix of tax and rates that is always wrong and particularly wrong where it is based on a situation where the poor law valuation is more than 200 years old and where so much land improvement and reclamation have changed the entire scene. The whole basis for the calculations then made is now completely different. Yet, the legislation has been rushed in. I do not know why there was this haste. There is no reasonable explanation for it but it is an easy way of extracting an additional £7 million from the farmers. That makes a total additional £25 million now being taken from farming by the present Government.

I took part in programmes prior to the election with the Minister for Agriculture and I saw the performance. No other impression was given than that all the taxes we were proposing to shower on the backs of the farmers were going to be removed and that in future farmers would look confidently forward to more subsidies, more assistance and less taxation. We see now what they are getting. Deputy Crotty rightly spoke of the adverse effect of measures of this kind on farming confidence. We got an example of this in 1974 when farmer confidence dropped because of the oversupply of cattle and beef in Europe, and it was very difficult to restore. I know what is going to happen to farmer confidence if we go on eroding unnecessarily and wrongly what remains for Irish farmers. I cannot understand why there has been little or no reference to this in the media. I searched the Farmer's Journal over the weekend and there was absolutely no reference to it. The Farmer's Journal normally can see a cloud arising miles away. I searched last Saturday's Irish Independent and I came to the conclusion that “The Drover” must have lost his way in the mist on the hill. There was no reference there either, and normally everybody is fleeced when anything like this is happening. They are not yet aware of what this Bill is all about, but the time is fast arriving when they will be in no doubt about what is happening. When the rate collector sends out his demand notices they will start to talk and then it will be late.

Deputy Crotty expressed the hope that the Minister on Committee Stage would amend this Bill drastically. He will not. He will not be allowed to amend it because the purpose of it is simply and solely to get the £7 million in a crude, easy way, but not a just or equitable way. The people who are going to suffer are people with large families and large borrowings, people who are not in a position to pay income tax but who happen to have this type of valuation through one accident or another. There is nothing equitable about this. It is unjust and undesirable legislation which is going to have nothing but adverse effects on farming and the agricultural industry generally.

It is extraordinary that it is the Minister for the Environment who has to come in here to do this to the farmers. He is doing it because he is forced to do it, not because he likes doing it or because he believes it is just, honest and equitable. He is simply the Minister who happens to be in that seat at the time and he is forced to do it. I know the way the Department of Finance think when they are looking for money and I am told they are cutting their throats for money at present. I am assured by everybody I meet that the Government are running out of money even though they have borrowed in excess of £800 million in the present year. I hope that is not true and that we will see more jobs before it happens. The one sector which more than any other is in a position to provide jobs is the sector processing agricultural raw materials. They cannot process those raw materials unless they are produced and you will not get the production unless you have farming confidence.

I came in just to take the cloak off this Bill and to alert people to what it is all about. It is an easy £7 million for the Government which is being got from people who should not be paying it. Nobody knows that better than the Minister. I would like what Deputy Crotty was asking him to do would happen, but I know too well it will not: the Minister will not be allowed to do it. I hope that this will get the adverse publicity it deserves. The quickest way to arrive at reasonable land valuations, if we are going to have rates at all, is to provide the institute with 80 or 100 people for five years and get a right valuation.

However, in the long term we should not be basing it on this type of thing at all. Land should not be taxed on its quality. There should be complete derating and a fair taxation system. Farmers have said on many occasions, as I have also, that they should pay their fair share of tax. They have said they are prepared to pay their fair share of it. The only way to decide what is a fair share is to remove the enormous bill of rates, which is not based on equity or justice or on the ability of the farmer to pay. It is based on quality of land which has not been properly assessed or which was assessed over 200 years ago.

I regret that I have to come in here to criticise this because I know that money must be secured. If a Government are to provide the services necessary for a country they must get money. They must get it fairly. All the people who are in a position to pay must be asked to pay. But the money should not be got in this crude and inequitable fashion. All of us who are public representatives have a responsibility to come in and present the case as it is and not to allow it to be glossed over and cloaked. It is supposed to be a necessary continuation of legislation in order to provide continued relief for farmers. This is a great deception, and unfortunately the media have not really awakened to the deception. The farming organisations and papers have not wakened up to it, but they will when the demand note arrives from the rate collector.

Mr. Enright

I rise to speak on this important Bill entitled Rates on Agricultural Land (Relief) Bill, 1978. It is an interesting Bill, but I think the title is wrong. This Bill should be entitled The Removal of Relief of Rates on Agricultural Land Bill, 1978. Basically what is happening in this Bill is that the farmers are losing £7 million of the relief which has already been applied to agricultural land. It is sad to see this relief being removed. The farming community were entitled to expect and anticipate that they would have been allowed to retain this £7 million. There is now an additional £7 million being paid in rates by the farming community. At present farmers who have a valuation of over £75 are going to get no rates relief whatsoever and it is intended then to reduce that to £60 next year. I ask the Minister of State who is present to bear in mind, that farmers now being affected by this do not qualify under two headings for most important benefits which every other member of the farming community and almost the entire population are entitled to.

They are, first, higher education grants and, second, benefits under the Health Acts. If people whose rateable valuation exceeds £60 apply to their county councils or the Department of Education for a higher education grant they do not get it, irrespective of how many there are in the family, if the father is ill, and so on. That is a very important point.

Similarly, farmers whose valuations which date back to the Griffith valuation, which is more than 100 years old, do not qualify for benefits under the Health Acts. Under the Health Contribution Acts a farmer cannot contribute towards the local health boards. If any member of his family goes into hospital that member does not qualify for benefits and the farmer must pay the full account.

We are assessing people for rates under this antiquated system. I spoke to a number of farmers about this. They are worried that they have to meet this additional charge because under this arbitrary system we are chopping down at a certain point in valuations and saying "You qualify for absolutely nothing". That is an amazing situation. I would like to hear of any other section in the community who are completely removed from every benefit being given by the State.

As far as I can see, the only thing for which they qualify is children's allowances where there is no means test. Because they have a valuation of over £60 those farmers do not qualify for anything else. Farmers must be very strong to overcome these obstacles. I know farmers with very large families whose valuation is just over the £60 limit and they are very upset because they do not qualify for the higher education grant. This additional burden is now being levied on them and they have no way of appealing against it.

I would ask the Government seriously to consider what they are doing under this Bill. Our farming community may get the idea that everybody is against them, that their rights are not being considered in conjunction with the rights of everybody else, or that a situation is arising where their rights are not being taken into account. If that should occur, there could be a grave situation in this country.

All the leaders of farming organisations have admitted that progress has been made in agriculture. They have stated that they are happy that this is so and that the standard of living of the farming community has improved. Their honest statements should not be taken as an admission that they are giving the Government a blank cheque to extract money, willy-nilly, from them. That would be wrong.

I would like clarification on a number of points. This Bill is a forerunner of a Bill which has come before the House annually and was usually introduced by the Minister for Agriculture. Was there any reason for the Minister for the Environment to bring in this Bill this time? I ask this because the Minister for the Environment is from a constituency which does not have as many large farmers as there are in Carlow and Kilkenny. The Minister for Agriculture has managed to sidestep a most unpopular Bill in his own county by handing it over to the Minister for the Environment. This Bill relates to agriculture only and should have been brought in by the Minister for Agriculture. I would like the Minister to reply to this question.

There are a number of interesting points in this Bill. A report on "Local Finance and Taxation" was issued in 1972 when Fianna Fáil were last in Government. On page 10, chapter 4, the first paragraph deals with the rating system and the need for local taxation. This Bill coupled with that paper which the then Government issued is more than worrying. Paragraph 4.1.1. states:

To the extent that local services cannot be financed by direct charges, such as fees, rents, etc., they must be paid for by taxation, raised either centrally or locally.

Paragraph 4.1.2 states:

The Government consider it essential that local authorities should have power to levy local taxes. Moreover, they believe that these taxes should be capable of financing a significant proportion of local expenditure, if local democracy and a sound local government system is to survive.

It is significant that Fianna Fáil believed that local taxation must form a basis for sound local democracy. If that is Fianna Fáil thinking, then the removal of rates on dwellinghouses in towns and cities will be financed by rates paid by the farming community. There will now be two systems of taxation for farmers, income tax and rates.

The Minister estimates that this year something in the region of £7 million will be brought in through taxation of farmers with a valuation over £75. Next year the valuation will be reduced to £60. I should like to know how much additional taxation will be brought in by the removal of relief on farmers with a rateable valuation between £60 and £75. The rating system was removed from dwellinghouses because it was regarded as inequitable, unjust and unfair. If this system was wrong for people living in towns it is equally wrong for those living on farms. There is no criterion according to which one can say that this system is right. There is no logical reason which would permit the farming community to agree to this. During their period in Opposition Fianna Fáil said that they would remove rates on dwellinghouses because they were unfair but in spite of that they are now increasing the rates on the farming community.

On 4 April 1974 the then Leader of the Opposition, Deputy Lynch, spoke about income tax. At column 1515 of the Official Report Deputy Lynch said the following in relation to the farming community:

Obviously, they anticipate and fear that the £100 norm of land valuation—according to a completely outdated criterion, incidentally, the Griffith valuation some 100 years old now—will be reduced according as the Minister feels it necessary and, of course, as the Revenue Commissioners advise.

He went on to say:

They indicate that rates are already a heavy imposition on many of them, especially the progressive ones. Therefore, there would be now 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.

Basically the Fianna Fáil policy would be extended to relieve farmers from rates. That is what I read from it. It is certainly most unfair that farmers who had been granted relief from rates are now to lose this relief. Why have the Government gone back on this statement? Perhaps it is in order to bring in revenue in an easy manner. Reading Deputy Lynch's statement at that time the farming community would have felt that when dwellinghouses were being relieved of rates land would also be relieved. Rates on private dwellings had been keeping the local authorities going and I fear that this will now be paid for by the agricultural community. This would be a scandal. The farming community will be strongly opposed to any method of forcing them to pay for the servicing of local authorities. In the long run this will be answerable for at the polls in the European elections, the local authority elections and the next general election.

In 1975, when the £17 allowances for agricultural workers was being removed, Fianna Fáil opposed it; and even though the amount was nominal I saw a lot of merit in what they were saying. That £17 relief was a gesture towards farmers which encouraged increased employment on the land. I suggest to the Minister that an allowance of an increased sum should now be introduced to facilitate farmers and to encourage them to employ more workers. In industry the Government are continuing the employment premium scheme introduced by the National Coalition and I suggest that a similar gesture should be made to farmers. I would ask the Minister to consider this seriously.

An Leas-Cheann Comhairle

The Deputy is getting away from the Bill.

Mr. Enright

This has a bearing on rates, but I will not pursue it. This Bill removes reliefs from rates on land and I do not think Fianna Fáil would lose face if at this stage they amended the Bill even if it meant forfeiting the £7 million it would save. It would be regarded as a fair gesture by farmers who are, after all, the source of our main exports. A prosperous agricultural industry affects everyone in the country. A bill of this sort only serves to perpetuate the gap between the different sections of the community and to widen that gap. We should be striving for harmonious relations with all sections of the community——

An Leas-Cheann Comhairle

I have told the Deputy he is getting away from the Bill.

Mr. Enright

The Bill imposes an additional tax of £7 million on farmers with valuations of more than £75 and it only emphasises the differences that exist between the different sections of the community. It is a dangerous step and because of the nature of agriculture this will be to the detriment of the people as a whole.

As I said earlier, the people who stand to lose this benefit failed to qualify for other benefits given by the Government and this additional burden comes at a time when the fertiliser subsidy is being removed. All our efforts at this stage should be directed toward retaining the confidence of our farmers. As I have said, they are our greatest exporters, and our main concern should be to encourage them to expand their export potential. The additional impost on the farmers through this Bill and the effects of the removal of the fertiliser subsidy coming so close together will not do anything to retain the confidence of the farming community.

The decision of the Minister for Agriculture to prevent heifers going into intervention, coupled with all the other moves in regard to agriculture, may cause a certain amount of fear among farmers and a loss of confidence. This must not be allowed to happen to our most important industry. No matter what is said, confidence must be maintained in agriculture. This Bill is only one of a number of moves all of which are having an accumulative effect on the farming community. It is a worrying aspect. I am certainly worried about it and I am sure many people involved in agriculture are worried about it. The seizing of additional moneys, which cannot be objected to and which should not be required by the Government, should not be tolerated. There is no appeal once the rates have been struck and the demands sent out. The rated occupiers are the people who must pay. If it is wrong to have rates on new dwellings it is equally wrong to have rates on agricultural land.

The Minister should consider the system of valuations. He promised that rates on dwellings would be abolished and this has been done. Recently, in reply to a question, he said he was no longer keeping records of valuations on dwellings. If this is so in regard to dwellings then he is no longer interested in raising rates on them and he should not be considering rating agricultural land. We would be better off without our rating system and the Minister should seriously consider reviewing it without delay.

We are one of the few countries in Europe that is imposing two systems of taxation on one section of the community—our farmers are liable for income tax and rates. Many commentators and those who constantly criticise the farming community fail to take account of the great deal of money that is paid by farmers in rates and the great amount of money that is spent by them in relation to other aspects of their business. We are one of the few countries in Europe with two systems of taxation and every member of the farming community must feel he is being treated unfairly when his European competitors have only one system.

This Bill has been discussed at great length because of the strong opposition which many people have to the imposition of additional taxation on the farming community. The situation must be remedied in order to allow farmers to be more competitive.

Debate adjourned.

Business suspended at 1.30 p.m. and resumed at 2.30 p.m.