First I wish to ask the Minister a question in connection with what he said regarding hardship cases so far as county councils would be concerned in dealing with large bills. Is it not the position that the guidelines laid down by most county councils would not include in this consideration a farmer whose valuation was to the extent of £80? I understand that the guidelines are in the region of £32 in a case of a farmer who had a wife and three children, before any hardship case could be considered.
Rates on Agricultural Land (Relief) Bill, 1978: Committee Stage (Resumed).
Debate resumed on amendment No. 3 to amendment No. 7:
To delete paragraph (b) and substitute the following paragraph:
"(b) Whenever an order is proposed to be made under paragraph (a) of this subsection a draft of the order shall be laid before each House of the Oireachtas and the order shall not be made until a resolution approving of the draft order has been passed by each such House."
—(Deputy T.J. Fitzpatrick,Cavan-Monaghan.)
There are not necessarily guidelines and the number of children would not necessarily be a factor.
May I take it from that that any farmer, irrespective of his valuation, may be given consideration under the hardship clause?
That would be a matter for the discretion of the county manager.
Before the debate adjourned the Minister had stated that he had known of cases of persons being considered under this clause although their valuations were up to £80.
I referred to valuations approaching that figure.
Would you be specific so that we may be clear on the matter?
I do not have to be specific.
(Cavan-Monaghan): Could he not specify from his experience in his private capacity what he has in mind?
I would ask Deputies to speak through the Chair. Many of the new Deputies are not aware of the procedure in this regard.
They all have their teeth now.
The Minister seems to be in a generous mood but the particular area of his generosity will not affect me in any way nor indeed will it affect many people. However, I would ask him to take into consideration the question of equity so far as valuations are concerned. The present system of land valuation is totally out of date and does not take into consideration the income of the person concerned.
Because of Standing Orders it is not possible for me apparently to move an amendment on the lines I have in mind. I have been told that if an amendment has financial implications it cannot be moved by anyone but a member of the Government. Therefore, I appeal to the Minister to propose an amendment to the effect that any landowner with a valuation of £75 but of less than 80 adjustable acres should enjoy the present rates remission. There are several reasons for this suggestion. First, I understand that the effect of this legislation will be that next year, by way of Ministerial order, people with valuations of £60 will no longer qualify for rates remission. No doubt the Minister has been a long-serving member of a local authority.
I have never been a member of a local authority.
But as a servant of a local authority the Minister will have had a knowledge of their operations.
At any rate I am sure that the Minister has a fair knowledge of the rating system. Is the Minister aware that in County Wexford people with valuations of £60 will have as small a holding as 60 adjustable acres. There is a section of land in Wexford known as the Macmores. It comprises 45,000 acres and the valuations in respect of it range from 55p to £1.10 in the £. There are men in that area who do not qualify either for health or for education grants but who are responsible for the full rate from 31 December 1978.
We are dealing with an amendment. The Deputy will be given an opportunity on the section to make the case he is endeavouring to make now but it does not arise on the amendment before us.
I was making the case in the context of the Minister's generosity.
That does not arise either on the amendment. There will be adequate opportunity for the Deputy to make his case on the section. The amendment deals with valuations in two administrative areas.
(Cavan-Monaghan): On these amendments it is necessary that the record be as clear as possible. As the Bill stands it is clear that if a ratepayer's total valuation on agricultural land equals or exceeds £75 this year or £60 next year, regardless of where the land is situated in the State, the ratepayer will be given the benefit of rates relief.
The Minister's amendment is intended to provide that only land which equals or exceeds £75 valuation this year or £60 valuation next year in a rating area shall deprive the owner of rates relief. I doubt very much whether the amendment will have that effect but the Minister says he is advised that it will have this effect. Presumably this is because of some rule of construction. If that is so I should like the Minister to confirm it but from my general knowledge of law that is the only way I can see it would work as the Minister says it would work. However, if the amendment works in the way the Minister says it will work, this will emphasise the inequity and the absurdity of the rating system. The Minister says that as soon as the Bill is through he will make an order in this regard for 1978. The effect of that would be that if a farmer has a poor law valuation of £100 in one county and the rate is £10.21 in the £, his rates will be increased this year by £408.40 whether he is liable to pay income tax or not. However, if instead of having a PLV of £100 in County Kildare he has a PLV of £50 in County Kildare and a PLV of £50 in County Meath his rates will not be increased at all. I do not know what is the difference between having a farm with a valuation of £100 in County Meath and having one with a valuation of £50 in Meath and one with a valuation of £50 across the road in Kildare. It is even worse than that. If he has a valuation of £50 in the urban district of Naas, and Naas is one of the urban districts with a very big area of land—Bal-linasloe is another—and if he has a valuation of £50 in the county of Kildare he will have no increase at all. I want to put on record that I believe this is an absurdity and I believe it is a good reason for scrapping this system of raising money by rates on valuation.
It is not today or yesterday I started to advocate the abolition of the rating system. It is a system that has no regard for the income of the person who is taxed or for the capacity of that person to pay. The Minister is consolidating that system in this Bill. Until such time as the Minister gets round to abolishing rates altogether he should certainly not increase them. This Bill is the first measure in living memory, with the paltry exception of the £17 employment grant in 1976, in which the agricultural grant has been dealt with to the disadvantage of the farmer. Any relief is welcome but an absurd position is being consolidated here.
It is noteworthy that the Bill as introduced provided for aggregation of valuations thoughout the State. It is quite obvious that representations were made to the Minister by some people who have land in different counties. Perhaps they have valuations of under £20 in one county and are paying no rates on that land. It is obvious that the Minister does not want to stir up the pot. It would be better to stir up the pot and to expose to all and sundry the absurd system we are operating here.
I know that Fianna Fáil backbenchers are not permitted to give us the benefit of their thoughts and their experience on this Bill.
They have arrived.
(Cavan-Monaghan): On the Second Stage we had about 30 speakers from this side of the House. We had a contribution from Deputy Filgate and we had a contribution dragged out of Deputy Conaghan from Donegal.
What about Deputy Killilea?
(Cavan-Monaghan): This is an absurd system and I would like to hear the Minister justify it. I would like to hear him justify how a man with a valuation of £100 in County Galway will have his rates increased by £408.40 but if he happens to have a valuation of £50 in Galway and one of £50 in Roscommon he will have no increase. If County Galway amuses Deputy Killilea, I will take the example of a man having a valuation of £100 in Kildare who will have his rates increased by £408.40 but if he has a valuation of £50 in Kildare and one of £50 in Meath he will have no increase. I am sure that will come as a surprise to Deputy Killilea.
(Interruptions.)
If Deputy Killilea intends to take part he must come into the House.
(Cavan-Monaghan): I will be able to carry on without him, Sir. That is the sort of legislation the Fianna Fáil backbenchers are being asked to enact with their feet but they are not allowed to speak on it. It would be hard to defend it and I suppose it is better not to ask them to defend the impossible but I would ask the Minister to explain the commonsense in it, if there is any. There is no use in the Minister saying that this has been the practice since 1898 or from 1973 to 1977. That is no answer. We are increasing rates this year from 66? per cent to 87 per cent. This is the time to expose this sort of nonsense. It is bad enough that this sort of thing has been going on unnoticed for several years but when we are increasing the rate for a person with a valuation of £100 in one county from 66? to 87 per cent and we are not increasing it at all if his farm straddles a county border, it is time this sort of nonsense was exposed. We should have an explanation from the only person who is entitled to give it, the Minister. Indeed, on a measure like this we might have the benefit of the wisdom of the Minister for Agriculture because once this is enacted it is the people for whom the Minister for Agriculture is responsible who will pay the piper.
We should also have an explanation from the Minister of State at the Department of Agriculture but perhaps he, coming from Galway, would, like Deputy Killilea, treat the whole thing as a joke because it does not concern him. It concerns many farmers and we should have explanations. I would welcome a common-sense explanation from the Minister.
As I explained to Deputy Enright before the adjournment, there is nothing new in this. The people with valuations of £50 in Clare and £50 in an adjoining county always enjoyed full primary and supplementary allowances because they were under two rating authorities. There is no departure from that now.
Deputies opposite have been referring to the inequity or the equity of the rating and valuation systems and the fact that nothing has been done about them, that they have gone unnoticed for years. Deputy Fitzpatrick watched it for four-and-a-half years in Government. We were only one day in Government when we derated householders and farm outhouses. This year we are providing £80 million from the Exchequer for this purpose. In this Bill we are providing £38½ million for the agricultural community, an aggregate of £120 million.
(Cavan-Monaghan): It is £7 million less than last year.
The Deputy referred to a person who has a £50 valuation in County Kildare and a £50 valuation in Naas. That man has got relief of rates, as Deputy Fitzpatrick well knows. He will continue to get relief on the £50 in County Kildare, under a separate rating authority. He will continue to get supplementary and primary allowances in 1978. I suggest that the Deputies opposite who are so opposed to the amendment should vote against it.
There has not been any opposition to the amendment from this side. We are only looking for clarification. We want the reliefs to continue as heretofore. I will put a few questions to the Minister. In your original statement you said you hoped to recoup £7 million. I ask what will the exact cost of this amendment be to the Exchequer. I think it will be relatively small, no boon whatsoever to the farming community. Why did you not have this provision in the original Bill?
I am sorry to interrupt the Deputy, but he must ask the Minister questions through the Chair. He cannot continue using the word "you". The Deputy is long enough in the House to know the rules.
And you are long enough here not to be picking on small points.
When you say "you" you are addressing the Chair.
That is understood.
Why did the Minister not include this amendment in the original Bill? The reason is that the Minister did not realise the opposition this Bill would have from the farming community and belatedly he decided under pressure to give ground by way of this amendment. "The Drover" in the Farming Independent dealt at length with this.
I never read it.
The Minister's advisers and his colleagues in the Cabinet and a number of backbenchers read it and made him realise the strength of the opposition to the Bill among the farming community. He believes this small measure of relief may satisfy the farmers. Again I put it to him that he should accept the case made by this side to have the rates relief to farmers continued as heretofore. Deputy Fitzpatrick was correct when he said the Minister for Agriculture should be in the House throughout this debate. On the Second Stage I asked why that Minister had not come in to make a statement on the Bill. This Bill affects the people of rural Ireland, the farming community, and it is the job of the Minister for Agriculture to ensure that those people will get a fair deal, that they will not be discriminated against, as this Bill is doing.
We are not dealing with the Bill: we are dealing with an amendment.
Before the lunch interval the Minister said a county manager would have power to grant rates relief to a person who, through ill health, got into financial difficulties and found himself unable to pay the rates levied on his farm. I should like to ask the Minister two questions. Is he aware of the small amount of money allocated each year by local authorities towards relief of rates? If a county manager refuses to grant a waiver of rates to a farmer who may be ill in hospital, or who may have heavy bills coming in from a hospital or from doctors, and whose children may be debarred from higher education, has the Minister power to over-rule the county manager? Has he power to grant a rates waiver to that applicant? He has not. The Minister has no power to over-rule the county manager. The county manager makes the decision and the Minister cannot intervene in any way. The Minister knows that.
Why does the Deputy ask me questions if he knows the answers?
I am pointing out the inequity of the system the Minister is perpetrating.
Keep asking and answering.
We are dealing with amendment No. 7 and amendment No. 3 and nothing else.
I should like to look at amendment No. 7 in a different context from that of my colleagues. As I said already, I have a small worry about the way in which this amendment is worded. It could allow the Minister to alter the terms of the rates relief by order without coming back to this House and having the matter dealt with in the way we are now dealing with this alteration of the existing relief. It is established precedent in the House that this matter should not be dealt with by order but by legislation. I will be interested to hear the Minister's reply to my query before I make a final judgment.
If it is the case that this amendment will allow the Minister to remove the relief from people whose valuation exceeds £50 or £40 by order, obviously this would be objectionable. I know the Minister has said, and I know it is the opinion of other Members of the House present, that it is not his intention to take this power at the moment and that this amendment would not confer the power on him to alter the relief provided in this Bill by order.
My reading of the terms of this amendment suggests that the possibility exists that the Minister could decide to remove the relief by order and not by legislation from farmers whose valuations are £40 or less. I will explain how I think that could be done. It would be possible for the Minister for Finance to introduce an amendment to the Finance Bill on Committee Stage, when it comes before the House in a month, to alter the prescribed figure under section 15 (3) of the Finance Act, 1974. I take it the prescribed figure is £60 in the Finance Bill.
Because the effect of the present Bill will not expire until 1979, it would be possible for the Government in the current Finance Bill or the next Finance Bill to decide to alter the amount standing specified and bring it down to £40, or £30 or £20. Once that was done in the Finance Bill, if this amendment were adopted, there would be no need for the Minister to come back to the House with a new Bill, such as the one we are now considering, to make a change in rates relief consequent on changes in the amount standing specified in the Finance Bill which is the amount which determines whether a farmer above that valuation, the one to be specified, would be liable to income tax. To my mind it would be very undesirable, to put it at its very mildest, that this matter, namely, withdrawing the relief, could be dealt with by order.
I will say more specifically why I think this is possible. I do not think this construction is shared by the Minister or by my own colleagues but I should like to tease it out so that we will know exactly what we are passing. If there is any legitimate doubt it should be dealt with.
Subsection (3) (a) in the amendment provides that:
... if and whenever the Minister, as respects a local financial year, so provides by order, a rating authority ... shall not apply the Act as aforesaid to a person, as respects that local financial year, if the valuation of all the tenements of agricultural land in the rating area of the authority in respect of which he is rated equals or exceeds the amount standing specified, on the first day of that year, in section 15 (3) of the Finance Act, 1974.
The provision in the Finance Bill is that the amount standing specified on the first day of 1979 shall be £60. It is on that assumption that this Bill is being processed through the House. It is possible by an amendment of the Finance Bill, or a subsequent Finance Bill to be enacted at some stage during this calendar year, and not necessarily by an amendment of this Bill, although that is probably more likely, for the Minister for Finance to bring the specified figure to be operable from 1 January 1979 down from £60 to £20. That could be done by amendment to the current Finance Bill. If there is a mini-budget next autumn it could be done in a Finance Bill enacted later this year.
I contend that, under the terms of this amendment, it is impossible for the Minister to withdraw the relief from those farmers who were being brought into the income tax net as well, let us say for the sake of argument, farmers between the levels of £20 and £60. It would be possible for the Minister for the Environment to take the concomitant step of withdrawing the relief of rates from farmers between the levels of £20 and £60 by order under this amendment. It was on that assumption that I put down amendment No. 3.
I should like to say a few words about amendment No. 3. Paragraph (6) of the amendment provides that wherever an order is proposed to be made under paragraph (a) of the sub-section a draft of that order shall be laid before each House of the Oireachtas and the order shall not be made until a resolution approving of the draft order has been passed by each such House. That requires that there must be a debate on any order that the Minister makes under the Bill as he proposes to amend. It would be a sine qua non of accepting the Minister's amendment, if it has the effect which I argued earlier it might have, that any order the Minister might make—for instance, removing the present reliefs from farmers with a valuation between £20 and £60—would have to be discussed in this House in the way I have outlined, regardless of whether a Deputy puts down a motion to annul it.
If, as the Minister may argue— although he may accept my reading of the ways in which the amendment could be used—it could not have that effect and if the only type of order which could be introduced under this amendment is one dealing merely with the problem which arises when people have holdings in more than one rating authority area, there is still a case for requiring that that order be discussed of necessity in this House and could not take effect until it has been approved by this House.
Deputies from this side who have spoken earlier, while not opposing in any way the Minister's amendment, have pointed out that it reveals the basic injustice of the rating system. In order that the rating system and the inherent injustices be better understood by the public, there is a case that orders made under this proposed amendment should be properly discussed and approved in this House before they take effect and should not take effect automatically without any discussion. That is a relatively minor point. The major point on which I wish to have the Minister's response is the one regarding the fear I have expressed that this amendment could be used, if there is an amendment to the Finance Bill, so that the Minister could by order ensure that farmers with valuations between £20 and £60 would be deprived of the reliefs they now enjoy and would enjoy under the Bill as now being considered by the House.
The amendment gives me the power to put down an order to give relief. It does not give me the power to put down an order which would cause any additional burden, so this does not arise. It is an order to give necessary relief with regard to the aggregation of holdings in different authorities.
Where is that stated in the amendment?
Amendment No. 7 states:
In page 2, after line 19, to insert the following subsection:
"(3) (a) Notwithstanding subsection (2) of this section, if and whenever the Minister, as respects a local financial year, so provides by order, a rating authority (within the meaning of the said Local Government Act, 1946) shall not apply the Act aforesaid to a person, as respects that local financial year, if the valuation of all the tenements of agricultural land in the rating area of the authority in respect of which he is rated equals or exceeds the amount standing specified, on the first day of that year, in section 15 (3) of the Finance Act, 1974.
(b) An order under paragraph (a) of this subsection shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the order is passed by either such House within the next twenty-one days on which that House has sat after the order is laid before it, the order shall be annulled accordingly but without prejudice to the validity of anything previously done thereunder.".
As the Bill stands without the amendment, it means that the aggregation of all valuations, regardless of whether they are in one, two or more local rating areas, would be taken into account. The amendment gives me the power to put down an order which would change that and would mean that where there are valuations in different rating areas they would not be aggregated for that purpose.
I accept that, but I am arguing that the amendment gives the Minister powers over and above that to change the position regarding reliefs to farmers between £20 and £60 valuation. The amendment is not confined in its wording to dealing solely with the problems of farmers who have holdings in different counties.
The amendment does not give me the power to do this. What the Deputy was talking about was an amendment to the Finance Bill, not to this Bill.
I think the Minister has misunderstood my point. If the amount standing specified in the Finance Bill is changed, the Minister may by order under this amendment remove the rates relief from people below the present amount standing specified and above the new amount standing specified by the amendment to the Finance Bill. The Minister said in his reply to my contribution that this amendment is confined in its wording to the granting of relief.
It is for the purpose of changing the provisions of the original Act.
I hope I am not being obtuse.
The amendment deals with valuations in two particular administrative areas and nothing else. The Deputy's amendment deals with orders made under this section.
I contend that this amendment gives power to the Minister to deal not only with the problem of disaggregation of the valuation of a particular farmer whose valuation consists of holdings in two separate counties. It is clear from the wording of subsection (3) (a) of the amendment that the Minister may by order say that a particular local authority shall not apply the Act aforesaid to a person if that person's valuation equals or exceeds the amount standing specified in section 15 (3) of the Finance Act. Let us analyse what it means to say that the Minister may say that the local authority in question shall not apply the Act. That means that the reliefs are withdrawn. The Act grants the reliefs and if the Minister says that the Act shall not apply it means that the reliefs are withdrawn.
If the amount to be specified were altered, say to £20 as I have argued, in this year's Finance Bill or in any Finance Bill to be enacted during 1978, it would be possible under this amendment for the Minister by order to take the consequential step of withdrawing rates relief from people whether they had holdings in two counties or in one. At the moment I think the amount specified for valuations is £75. If an amendment to the Finance Bill were introduced changing that figure to £20, the Minister by order could withdraw rates relief from people with valuations between £20 and £75. In adopting this amendment we are giving the Minister power to do this by order. If he had not this power he would have to come to this House and introduce a Bill such as the one we are discussing now in order to make the change.
The House must be vigilant. We must look at every possibility and every potentially evil construction that can be put on an order-making power being granted to a Minister where it is granting such a power. If no such power is granted the Minister must come here with legislation to change the law but if an order-making power is granted he can change the law without having to come before us.
The amendment, as introduced for the purpose stated by the Minister, is acceptable to us. However, if it has the potential to be used in the way I have described, I do not know if it would be acceptable to us.
Amendment No. 7 will become subsection (3) of section 1. It gives me the power to make an order and to place it before the House. Taken in conjunction with the two existing subsections in section 1 it will have the effect of not aggregating all the holdings in different local authority areas.
With regard to the argument that it might give me the power to make an order reducing the £75 threshold for this year to £20 next year, I wish to state it does not give me any such power. The specified sum is stated in the Finance Bill. The Finance Bill has specified £60 which will become effective from 1 January 1979. If the amount is to be reduced that will be done in a Finance Bill, not in any order made by me under this measure.
The Minister has enlightened me somewhat on this matter. The present Finance Bill specifies £60 as the threshold for income tax and the removal of rates relief. If that Bill were amended, or if another Finance Bill were introduced during this year, is it the case that automatically the rates relief would be withdrawn from farmers with valuations between £20 and £60 if that sum was specified in the Finance Bill? Is it the situation that there would be no need to come back to the House with a Bill dealing with the consequential removal of rates relief?
The Finance Bill states the specified sum. I have not heard about a second Finance Bill for this year. The Deputy should discuss this matter when the Finance Bill is before the House, not under this Bill.
Is amendment No. 3 withdrawn? I am afraid that we are having repetition now.
Would the Minister consider an amendment to this Bill that would prevent any alteration in the figure from that specified in the current Finance Bill?
That can be dealt with on Report Stage. It cannot be discussed now. We are dealing with two amendments now.
I suggest that an amendment be put down to the Finance Bill, not with regard to this Bill.
(Cavan-Monaghan): The Minister could write into this Bill a specific sum without any reference to the Finance Bill and then he would have control over it. As matters stand he is giving control to another Minister. He could write in a sum of £75 instead of the machinery he has adopted by referring back to the figure specified in the Finance Bill.
Surely the Deputy understands we cannot do that on these amendments.
We are saying that the Minister for the Environment is writing a blank cheque that may be signed at any time by the Minister for Finance, altering the amounts specified for income tax purposes. Automatically, and without any further discussion, rates relief will be withdrawn from people whose valuation is in excess of the new amount specified. To my mind that is a very undesirable state of affairs.
We are discussing everything except the two amendments before the House. Is the amendment withdrawn or shall I put it?
Amendment No. 3 to amendment No. 7, by leave, withdrawn.
Amendment No. 7 agreed to.
Question proposed: "That section 1. as amended, stand part of the Bill."
(Cavan-Monaghan): For all practical purposes this is a one-section Bill. This section takes away from farmers the rates relief they have enjoyed for many years. I am against this proposal.
I said on the Second Stage—this is relevant now—the trend in recent years has been to get away from the rating system as a means of taking in revenue. The National Coalition initiated the most recent trend in this direction when they removed the health charges and housing subsidies from the rates in 1975. That was a substantial benefit to all rated occupiers. The National Coalition carried that proposal a step further when they derated all private dwellings by 25 per cent last year and intimated that they proposed, progressively and without borrowing money, to derate private dwellings altogether by next year. It is true that Fianna Fáil went a step further in an election promise and borrowed £821 million for this purpose among other purposes. I agree with them derating private houses from 1 January of this year.
I do not think we should have a Second Stage debate now. The Deputy has the right to raise points on the section before us now.
(Cavan-Monaghan): I am making my case against the proposal. There are some Bills where it is almost impossible to distinguish between a Second Stage speech and a Committee Stage speech. This is one of them.
I accept the difficulty. Surely the Deputy will agree that short statements on the points in section 1 are in order?
(Cavan-Monaghan): My argument is against subsection (2) of this section. I submit that the argument I propose making is relevant. The step by the Government to completely remove rates from private dwellings was a speeding up of the National Coalition policy to do the same thing. We now have an absolute reversal of that policy. The Minister would have us believe that section 1 is a proposal by him to grant relief to farmers. The relief to agricultural holdings was granted over the years by Bills introduced here which lasted for one or two years. The last Bill which granted relief to all farmers with a valuation of £20 and upwards without any limit on upper valuation expired last year. The Minister could have introduced a Bill to replace that expired Bill. This Bill does not replace it in full. I object to this. It only replaces the expired Bill in relation to farmers whose valuation does not exceed £75 this year and £60 next year. The effect of it this year is to impose a blistering increase, assuming a rate of £10.21 in the £, of £331 on farmers with a poor law valuation of £75.
Sorry Deputy but all that was said on the Second Stage. We will not have another Second Stage debate at this stage. If the Deputy has any points to make on this section, as amended, we will have them. The Deputy is going into a full Second Stage speech.
(Cavan-Monaghan): I have the greatest respect for the Chair. I propose to bow to the ruling of the Chair.
Deputy Fitzpatrick knows as well as the Chair that you cannot make Second Stage speeches on Committee Stage.
(Cavan-Monaghan): This is not a Second Stage speech. I would be making a Second Stage speech if I started to talk about the effect of this on the economy.
The Deputy has already said everything he is saying now on Second Stage. Deputy Fitzpatrick on section 1 please.
(Cavan-Monaghan): I made the arguments on the Second Stage in an effort to get the Minister to amend this Bill on Committee Stage. He has not done that. I will vote against this section.
That is in order. The Deputy is entitled to vote against the section but not to make a Second Stage speech. We will allow the Deputy to make a few points.
(Cavan-Monaghan): I cannot vote against it or I cannot ask the Members of the House to vote against it without making the case against it. If the Chair reflects I believe he will appreciate that this is the type of Bill where it is impossible to draw a distinction between the Second Stage argument and the Committee Stage argument. It is a one-section Bill and I am bound to point out to the Members of the House——
That is agreed and I am prepared to give the Deputy every latitude on it. I appeal to him not to make a Second Stage speech on it.
(Cavan-Monaghan): I want to put it to the Chair that I put down a number of amendments which in the ordinary course of events I could move and argue but because of the procedure of the House which says that only a member of the Government can move amendments which would impose a charge on the Exchequer. I cannot move those amendments. I am entitled —the Standing Orders will not prevent me—to make the arguments contained in my amendments.
No. If an amendment is ruled out of order the Deputy cannot make an argument about it. He cannot move his amendments nor argue them.
(Cavan-Monaghan): I can make points against the section.
The Deputy can make points against the section but not on amendments that have been ruled out of order.
(Cavan-Monaghan): I am doing that. The effect of this section is to impose a blistering increase of over £330 on farmers with a poor law valuation of £75 and £408 on farmers with a poor law valuation of £100. The argument was made by the Minister on the Second Stage that farmers could deduct their rates from the amount of income tax they would be called on to pay. I asked the Minister on the Second Stage to make sure, by introducing an amendment on Committee Stage, that the increase would apply only to farmers who were liable to pay income tax and that if the amount of income tax they were liable to pay did not exceed the amount of the increase in their rates caused by this Bill that this section would not apply to them. The Minister kept away from that argument on the Second Stage and he has not brought in an amendment on Committee Stage.
The effect of this measure is to increase rates by sums varying from £300 up to a couple of thousand pounds on farmers whether they are liable for income tax or not. About that there is no doubt. Many farmers will not be liable for income tax because of family commitments, bank interest, agricultural wages, contractors' wages and hard luck in the wholesale death of stock. Yet they will be called upon under this Bill to pay a blistering increase of from £300 up to the sky, depending upon their valuation. It is an outrageous proposal. When I insisted on this measure being debated at length in this House it had not got over, as Deputy Clinton said, to the agricultural organisations, nor had it got over to the farmers who were being affected. It has got over to them since they have now got their demand for rates and they know what is involved.
The Fianna Fáil backbenchers in this House have treated this measure with complete contempt. They are honourable men who could not defend the indefensible, and they decided to keep quiet. We put in speaker after speaker to emphasise and demonstrate the case I am making. We put in practically every Deputy in the Fine Gael Party and all we had from Fianna Fáil were a few words from Deputy Filgate from Louth and a few words from Deputy Conaghan from Donegal. A wholesale attack is to be made on the farmers through this Bill, and it is not going to be a single-armed attack. It is going to be an attack implemented and augmented by other measures.
Again I must remind the Deputy that he is making a Second Stage speech. I ask him to obey the Chair once in a while.
(Cavan-Monaghan): I am going to raise a point that could not be raised on Second Stage because we would know about it.
It is in order to do that, but not to make a Second Stage speech.
(Cavan-Monaghan): We have been discussing it here. The Minister across the House has mentioned the Finance Bill and has said that this and that can be done in the Finance Bill. Are the farmers of this country aware that if under this Bill they apply for relief of rates the local authority will be able to apply to the inspector of taxes under section 45 of the Finance Bill and for the first time in living memory confidential information given to the Inspector of Taxes by taxpayers is going to be——
The Deputy will have every opportunity of raising that on the Finance Bill.
(Cavan-Monaghan): No, the Finance Bill is relevant here because it is a dual operation. This is operated through the Finance Bill and by reference to the Finance Bill. I want to make reference to section 45 of the Finance Bill. For the first time in living memory there is going to be an imposition and exchange of information between the local authority and the Inspector of Taxes as to the finance and business transactions of farmers. It is a disgraceful, outrageous performance. Never before has any measure been introduced to authorise the Revenue Commissioners, in other words the Inspector of Taxes——
Deputy Fitzpatrick, it could not possibly arise.
(Cavan-Monaghan): It does.
It does not. The Deputy should accept the ruling of the Chair.
(Cavan-Monaghan): Would the Chair be patient?
Deputy Fitzpatrick will have every opportunity of raising matters concerning the Finance Bill when it comes before the House.
(Cavan-Monaghan): I ask the Chair to bear with me for a brief submission. This Bill, if it is about anything, is, according to the Minister, about giving or claiming relief. If a farmer claims relief under this Bill it will be open to the county manager of a local authority to go prying into his business through the Inspector of Taxes. If that is not relevant I do not know what is. If this Bill is about anything it is about relief on rates, but to qualify for relief on rates under this Bill a farmer will have to submit to an inquisition into his affairs by the Inspector of Taxes under section 45 of the Finance Bill in this year of grace 1978. If that is not relevant——
It is not relevant. Section 45 of the Finance Bill is not before the House at the moment. I ask Deputy Fitzpatrick to stay on the section.
(Cavan-Monaghan): Neither is section 15 (3) of the Finance Act, 1974, as amended by this year's Finance Bill relevant, yet we are talking about it.
It is mentioned in the Finance Bill because it has always been mentioned in that Bill.
(Cavan-Monaghan): We are talking about section 15 (3) of the Finance Act, 1974, as it will be amended by this year's Finance Bill, which has not yet been debated. If I am entitled to refer to the £60 valuation, as I have been doing since this Bill came in, it is because that valuation, as we know from the budget statement, will be operated as a specified figure as from 1 January this year by virtue of the Finance Bill of this year. The Ceann Comhairle and you, Sir, have permitted me to talk about that £60 valuation which will not be effective until the Finance Bill goes through the House and makes it effective. I am not usually disorderly and I do not want to be disorderly; I merely want to assert my rights in this House. If I am entitled to talk about that measure. I am entitled to talk about the other measure which will decide whether a farmer is entitled to relief or not, and the section which will decide that.
The Deputy will have every opportunity of dealing with it when the Finance Bill comes before the House. It is not yet before the House.
(Cavan-Monaghan): No, but I have been held entitled to talk about the £60 valuation which is operative by virtue of the Finance Bill.
Deputy Fitzpatrick knows as well as I do that you cannot make a Second Stage speech on Committee Stage of a Bill.
(Cavan-Monaghan): I am entitled to make a speech against this wretched, unjust and inequitable section. It is wrong that the machinery of the Revenue Commissioners and the Inspector of Taxes should be brought in to see whether a man is entitled to agricultural rates relief or not. Of course, this Government have gone mad, because they are using the same wretched inquisition section now to see whether a man is entitled to a housing grant or not. I make only passing reference to that because to discuss it would not be in order. We hear about thumb-twisting and undesirable practices in Long Kesh and elsewhere but this is bordering on that. I have never heard of a more outrageous performance.
I should like the Minister to deal with this subsection (2) when he gets an opportunity, and I ask him to deny, if he can, that this is a proposal to extract more rates from farmers. Whether or not they are liable for income tax has no bearing on it. I defy him to contradict that there will be many farmers throughout the country who will not be liable for income tax but who will have their rates increased by substantial amounts. If he does not deny that, I invite him to give it further consideration and, even on Report Stage, to put a simple amendment into this Bill which will provide that only farmers who are liable for income tax in excess of the amount by which their rates would be increased by this Bill will have their rates increased. That is a fair challenge if the Minister is genuine.
There is some sinister idea here that, lest farmers might get away with income tax, they should be ground down by having them pay additional rates. This is in a situation in which there cannot be argument about profit and loss, valuations or anything else. There is an idea that, lest the farmer get away with some income tax, the situation should be copperfastened by extracting this additional amount from them by way of rates. Is that provision applied across the board? Is it applied to the private sector or to the professional man? Doctors are very much in the news this week in relation to their salaries and incomes. Doctors send in returns as do other professional men such as solicitors and accountants. Shopkeepers and all others make returns of their income, but let us take the doctor as an example. According to this section the farmer must be screwed down in order to ensure that regardless of whether he is liable for tax, this extra amount will be extracted from him. Is that situation applied in the case of a doctor? Have his rates been increased on the place where he makes his money? They have not been increased. The direct opposite has occurred. Rates have been abolished on his house, his surgery and his waiting room. The doctor is asked to pay income tax but he is not asked to pay a penny in rates although he earns four times as much as a farmer. There is no question of saying to the doctor that he must pay increased rates in order to ensure that he does not get away with income tax. That is a comparison I am anxious to put before the House by way of exposing the proposed unfair and unjust treatment of the agricultural community.
If the Minister is genuine and wishes only to collect rates as an instalment of income tax from farmers he has a clear way of saying that. This proposal to take away the agricultural grant has become combined, both in the mind of the Minister and in the minds of some people, with an income tax on farmers. I think it was in the Budget Statement that Fianna Fáil undertook not to ask farmers to pay their income tax in advance. But when the former Minister for Finance asked farmers in the opening years of taxation to pay their income tax on the first day of September instead of the first day in January there were cries of discrimination against farmers. We were told that they were being treated unfairly. What do we find here? We find that the rates the farmers will pay now, the savagely increased rates, will not be credited against their income tax for a period of 18 months. In other words, the Minister for Finance will have the use of all the farmers' rates if they are a credit against income tax. Therefore, the big increase in rates from £300 to £1,000 or £2,000, depending on valuation, will be at the disposal of the Minister interest free for 18 months before the farmer is called on to pay the tax against which the rates are supposed to be a payment on account. Let us have that out in the open and hear from the Minister what he thinks about it.
I should like the Minister to refer to my assertion that what is proposed here is an extraction of increased rates from farmers irrespective of their liability for income tax. Secondly, I want the Minister to comment on the disgraceful performance of setting the Revenue Commissioners and the Inspector of Taxes on farmers because they dare to claim relief of rates. Thirdly, I wish the Minister to deal with the proposal that in a situation in which the rates are regarded as a credit against income tax the Revenue Commissioners will have the use of the money for 18 months in advance.
The Minister has no answer to the logic of this argument. There is no point in his going back and telling us what Fianna Fáil did in respect of rates for farmers in the £20 valuation category. Neither need the Minister tell us about the abolition of rates on private dwellings. He and his party won the general election on a promise to treat the farmers well and on an assertion that the National Coalition treated the farmers badly. Fianna Fáil promised that if they were returned to power the farmers would hear no more about income tax or about rates. Now the Minister must explain to the House, to his backbenchers and to the country what sort of right-about-turn in policy has occured between 16 June 1977 and this year in regard to farmer taxation, to rates on agricultural land, to inquisitions into farmers business by the Inspector of Taxes.
I shall try to concentrate on the different categories of farmers involved, on the farmers in the £60, £75 and more than £100 valuation categories.
During the Second Stage discussion there were many aspects of the Bill that were not discussed because of the non-availability of information, some of which would have to be obtained through a Deputy's local authority. To give an example of what I mean, I recall that when speaking on Second Stage I was not aware that 611 farmers in my county with valuations of £60 would make an extra contribution, apart from their ordinary rates, of £183,000. The same applied upwards along the line, but to a greater extent. What we have here is a red herring. The Minister says that the rates can be regarded as an instalment against income tax; but the situation is, for example, that a man whose valuation is deemed to be £100 is faced anyway with income tax. There is a certain concession here but in so far as the £75 valuation is concerned fewer people would be involved in the income tax net.
Therefore, there is a high percentage of people who would not be in the income tax bracket at all. This is extra taxation behind a smokescreen. We come now to the people with valuations of £60. Only a very small percentage, if any, will become involved at all. What will happen in my county is that 611 people will make an extra contribution of £183,000. We must give the Government credit for one thing and that is that they are being consistent. The people with the valuations of £100 in a way are deriving a benefit. We remember the Finance Bill and the wealth tax of £10 million. This is on the same line. The smaller farmer is being hit. I do not think that is right and if Fianna Fáil had said that that was their intention before the last election I do not think the Minister would be sitting over there today.
Were any of the farmers' organisations called in to discuss this Bill? When we were in power, each day or at least each week we had farmers' organisations in the corridors.
Surely, Deputy, this is more appropriate to a Second Stage debate.
Before the final Stage of this Bill the farmers' organisations should be asked for their opinions. Advice was readily available to the farmers' organisations 12 months ago. There were people running around constituencies meeting farmers' organisations and telling them how hard we were on the farmers. They were promised that there would be no farmers' taxation and there was no reference to rates. In my county next January the figure involved will be well over £½ million. We heard much about the abolition of the domestic rate. I believe it is being subsidised by the farmer. The farmers' organisations should now have an opportunity of discussing this matter.
One thing that has annoyed the farmers is the speed with which the Government got back to them with a demand for extra money through the rating system. In the last fortnight the demand notes have reached the farmers. The farmers' organisations or the farmers individually did not realise what was involved in the removal of the remission of rates. Since the demand notes have started to arrive I have had telephone calls from farmers saying that there is a mistake in their rates. Three people rang me over the weekend and said that their rates had gone up by £500 and £600. People are finding that there is a tax in the region of £320 to £700 in their rates bills for 1978. Many promises were made and the farmers were deceived at the last election.
I thought the Minister had been a member of a local authority. It is only when one is a member of a local authority that one realises the variations in the valuation system. I understand it varies from 30p in the £ to 110p in the £. I said earlier that in this Bill the Minister is discriminating against certain sections of the community. The Minister says this has been there for the last 30 or 40 years. That is no excuse. It is the Minister's duty to try to bring a little equity to this situation. There will be people who in 1979 will have to pay their full rate at perhaps £12 in the £ in some counties irrespective of their income. People with valuations of over £60 have never qualified for benefit under the Health Act and now they find they do not qualify for grants under the Education Act. The Minister may say that the county manager has a discretion in cases of hardship but the majority of county managers will not entertain areas of people with valuations of £60. We in Wexford County Council have laid down guidelines for the payment of rates so far as hardship cases are concerned. Under those guidelines a man with over £32 per week with a wife and four children will not be considered. I understand that the same applies in most counties. The Minister should be looking at the question of removing rates completely from agricultural land whose owners pay their share through income tax if their incomes are big enough. It was no problem to take rates from private dwellings—the inter-Party Government had made a move to derate by 25 per cent——
The Deputy is moving into a Second Reading speech.
I will go back to relate the valuation to the acreage of the land. Because of Standing Orders I was unable to put down an amendment. It was news to me that only a Minister can move an amendment which has financial implications. I now ask the Minister to put down an amendment to the effect that any landowner with a £75 valuation will get remission of rates if his adjustable acreage is less than 80. That is a fair and honest request, an attempt to bring some element of equity to the rating system. As a result of this Bill farmers are discovering that they will get bills for rates which they cannot afford to pay. The Leas-Cheann Comhairle will be familiar with the Macamores where we have 44,000 acres with a valuation of 76p per acre. Next year the landowners will get bills for adjustable acreages of 60. If we multiply that by £12, which is the likely rate in the £, we get £720. There is not anything more unjust than the present rating system.
The section as a whole has the effect that in 1978 and 1979 the primary and supplementary allowances will continue but with the change that persons whose land valuation is equal to or greater than the income tax threshold—those in full-time farming—will be outside the scope of these allowances. The section makes provision to give rates relief to farmers of £38.5 million.
(Cavan-Monaghan): That is the pleasant part of the section. Will the Minister tell us about the ugly part?
That is what the section and the Bill are designed to achieve.
It is £7 million less than last year.
It is not £7 million less. The Deputy spoke about the inequity of the valuation system. We all acknowledge that there is something wrong with it, but it is a matter the Deputy should raise with the appropriate Minister, the Minister for Finance. The Valuation Office comes under his Department, not mine. Deputy Fitzpatrick said that all ratepayers, whether businessmen or farmers, must pay rates, but he said there is a difference. There is not. All people liable to pay rates must pay them. Deputy O'Brien said that farmers are being asked to carry the burden for domestic derating. The Exchequer is providing £80.75 million for the purpose of domestic derating and the agricultural grant is providing £38.5 million for relief for the farming community in the current year. The Bill had to be brought in for that purpose.
The Minister is being deceptive. We all know that the Act had to be reviewed once every two years, but on every previous occasion the reliefs were left at the previous level with the exception of the year when the employment allowance was withdrawn. This year the reliefs are being withdrawn from farmers who are liable to income tax. That is a very significant withdrawal of relief by comparison with the situation if the practice heretofore had been adhered to, namely, that the Bill would simply renew the existing provisions.
To pretend that the Bill grants a measure of relief is not only deceptive but not in accordance with reality. It is a mere accident of parliamentary practice that the Act has been renewed every two years, and this Bill is far worse in its provisions than previous Bills or the Bill which the House would have had every right to expect this time.
Members of the farming community who have received their rates demands in recent weeks—few of them have— appreciate the reality and realise that the Minister is only pretending as far as this Bill is concerned. The most deeply worrying part of the section— that which was discussed earlier in a general way on the amendment and which I propose to deal with more fully now—is that in effect a blank cheque can be written in so far as rates relief is concerned. From now on the Minister for Finance may decide by amendment to change the income tax threshold. He could decide this year to reduce the threshold to £20 and, ipso facto, rates reliefs which previously existed would be withdrawn on the enactment of the Finance Bill. The Department of the Environment would then find a way to take from the House the power to discuss rates relief specifically. That, to my mind, is not only a danger to the farming community, indicating the intention of the Government progressively to lower the threshold for income tax—there would be no cause for this Bill otherwise——
The Deputy discussed this fully on his amendment.
When I was discussing the amendment I was told I was not then relevant but that I would be on the section.
The Deputy was not told any such thing. The Deputy repeated this argument time and again on the amendment. The Deputy will now come to the section before the House.
I am dealing specifically with subsection (2).
The previous Government brought it down from £175.
We did not make any change as far as rates are concerned.
I am talking about the threshold.
The previous Government did not do anything about it. It is the Government now who are withdrawing rates relief. The previous Government did not withdraw the rate relief in relation to——
The Bill was there from 1946 to 1978.
The previous Government dealt with employment allowances. They did not remove the primary and supplementary allowances, as this Bill is proposing to do, and as this section in particular is proposing to do. It provides that a rating authority shall not apply the Act to a person whose valuation exceeds the amount standing specified on the first day of that year in section 15 (3) of the Finance Act, 1974. All that is necessary is to change that figure by a single section in the Finance Bill. There and then rates relief is abolished for people above the threshold which is the new threshold to be set.
This was discussed fully on the amendment. We went into it from A to Z on the amendment. The Deputy should not repeat it now. Repetition is not in order. The Deputy is entitled to speak on the section but not to go over and over the same ground.
The objectionable features of this withdrawal of relief are manifold. They measure significantly the level of rates which will have to be paid by farmers. The argument is made that these rates may be set off against income tax. Those rates are payable in April 1978 and in July 1978. Yet, the vastly increased rates payable under the provisions of this Bill cannot be set off against income tax until 1 January 1980. In other words, the money must be paid in more than 18 months prior to the time when a possible relief against income tax can be obtained in respect of those moneys.
We heard the farming community and Deputies who are now sitting on the Government side of the House on their behalf complaining bitterly about the fact that they were being asked to pay income tax on 1 September which was two or three months prior to the time they might otherwise have to pay it. Under this Bill they will be asked to pay money 18 months in advance of when they should have to pay it. The State will have the use of their money for 18 full months without interest payments whereas, under the proposals in relation to income tax to be paid on 1 September, a significant rate of interest would have been payable on any excess of income tax paid on 1 September which it transpired was not due because the income had not accrued and the money had to be paid back. That money would have been paid back with interest which exceeded the going market rate. This does not apply in the case of this Bill.
Another point which needs to be made very forcibly is that if a farmer dies and his widow has to take over, it is likely that for a few years after his death she will not have a full grip on the business, and she will not be able to make the maximum out of the farm. As a result of not earning as much from the farm as the farm would have earned if her husband were still alive, she would not be liable for income tax at all, but she will have to pay much increased rates. There will be no income tax against which to set off the rates because she will not be liable for income tax.
In effect, what we are doing in this Bill is imposing a much heavier burden on farmers with low incomes than on farmers with high incomes. A farmer with a high income who is paying his full income tax will be able to set off the entirety of his rates against his income tax. Farmers with small incomes, and who may be liable to little or no income tax, in many cases undoubtedly will find that their rates will well exceed any income tax they may be liable for. They will not get their money back, or an equivalent of their money in terms of allowances, because there will be nothing to allow it against.
In economists' terms this is described as regressive taxation, which is taxation that takes more from those who can least afford it than it takes from those who can afford it. This taxation—and, in effect, that is what it is, because it is withdrawing a relief which has been there since 1946 and which is accepted as being part of our over-all fiscal system—will give more relief to the farmer who is making a good income, because he will be able to set off the entirety of his increased rates against his income tax, and give less or perhaps no relief to the farmer with a low income.
Another point I should like to make is in relation to the possible increase in rates which could occur and which would obviously affect farmers more severely now that they are being deprived of the supplementary and primary allowances of which this Bill proposes to deprive them, farmers with valuation above £60. We are told this year there is an 11 per cent limit on all increases of rates whether they be domestic rates which will be paid by the Exchequer, or business rates, or farming rates which will be paid by the person concerned. This is fair enough, if you like, because there is equality between what the State will pay and what the farmer or the business persons will have to pay in terms of an increase.
There is no guarantee in this Bill or elsewhere that, in some future year, the Minister for the Environment might not say: "We are a bit short of money this year so we will allow you to increase domestic rates by 5 per cent only. In other words we will let you ask us to pay a 5 per cent increase but you are perfectly free to make up the difference, if you are short of money for any scheme, by increasing the rates on the farming community and the business community by anything up to 30 per cent if you so wish."
The Deputy is now making a Second Stage speech. I would ask Deputies to desist from making Second Stage speeches on Committee Stage. That is not in order.
I have made my point. There are a number of farmers whose valuations are excessively high by comparison with what their farms can earn. They will be more severely affected by this Bill, which takes no account of their income, than will farmers whose farms are less highly valued and who are making a good income.
The Minister should introduce an amendment along the lines of the amendment which was rightly ruled out of order as being impossible for a Member of the Opposition to introduce. This suggested that the restrictions on allowances which are being made operable by this Bill should apply only to farmers who are liable to pay tax and who are therefore in a position to make use of the rates allowances in the Finance Bill, that the Act should apply only to them and not to farmers who do not make enough money to be liable for income tax and who cannot claim for their rates against their income tax.
It is possible for the Minister to introduce such an amendment. If he is sincere in what he says about this Bill being intended to allow farmers to set off their rates against income tax, there should be no objection whatever to the introduction by him of an amendment along the lines suggested by Deputy Fitzpatrick. I hope the Minister will consider the matter favourably.
One of the greatest guides that the Minister can have in regard to the legislation before the House is the sight of empty Fianna Fáil benches. He is sitting there on his own because nobody else in Fianna Fáil desires to be associated in any way with this measure. Members have come in and stood at the top of the stairs and then left the House because they were not happy with the measure and did not want to become involved.
(Cavan-Monaghan): The only member of the Cabinet who came in was the Minister for Labour.
We are on Committee Stage and we will not go back to a Second Stage debate.
The position was similar on Second Stage. Two Fianna Fáil Members spoke on this measure in a most half-hearted manner. They knew it was unwise, unfair and discriminatory.
I wonder if the Minister has received a resolution from Offaly County Committee of Agriculture. This committee is comprised of representatives of Fine Gael, Fianna Fáil, the IFA and various farming organisations. The resolution demanded that the Government should reconsider their decision to withdraw the allowances to farmers with a rateable valuation over £75. It went on to mention the withdrawal of subsidies, but that is not relevant at this stage. No member of the committee spoke or voted against that resolution. They were unanimous that the Government should reconsider this matter because they realised the unfairness of what was happening.
The Minister knows that this measure is not wise and that the farming community are totally opposed to it. In County Offaly there are 383 farmers with valuations over £75 and a total of £163,000 must be paid in this county alone under this measure. The situation would be somewhat similar in County Laois. The farmers in County Offaly will pay an average of £423 each and this is to be collected directly with the rates.
The removal of rates on houses was Coalition policy. We felt it was inequitable that there should be rates on private houses, but it is absolutely wrong that, while private domestic dwellings are exempt, farmers as well as having to pay rates find that some of their benefits are being withdrawn. There is no justification for that. The farming community are very aggrieved about this measure and the Minister should reconsider the position even at this late stage.
The absence of support from backbenchers is significant. They can say when they go back to the country that they did not have anything to do with this measure, thus leaving all the odium on the shoulders of the Minister. He must accept responsibility.
It is wrong to look for another £7 million from the farming community. Even if a farmer is not liable for income tax he still has to pay rates. A farmer has a right to appeal against an assessment for income tax and a right to show that he is not liable, but he must pay his rates on demand. Fianna Fáil now decide, in contradiction of their statement before the general election, to seek a further £7 million from the farming community. If Fianna Fáil had stated before the general election, either in open debate or in their manifesto, that they intended to seek an extra £7 million in this dictatorial manner they would not have 84 seats in this House. The Minister should look at the matter and make the necessary amendments on Report Stage.
I stated that the Government had £7 million less than last year but I should have said that they are saving the Exchequer £7 million by this measure. The number of people affected in County Wexford is 640 and they will have to bear an extra burden of £330,000. In Wexford, and I presume it applies in other areas also, the rates were struck before the National Wage Agreement. We provided for 5 per cent under the National Wage Agreement but we find now that we will have to pay 8 per cent.
It does not arise on this Bill.
I want to know the position regarding the extra 3 per cent. Will it be charged to the farmers, who will be the only people paying rates, or will the Exchequer carry the cost? The amount involved is a sizeable sum. We have not made provision for it in Wexford. Will we be forced to tell the farmers that they must pay the 3 per cent? Perhaps the Minister will reply to that point?
What is the 3 per cent the Deputy mentioned?
The Minister told us to provide for 5 per cent, which we did, but now we have to pay 8 per cent as a result of the wage agreement. We want to know who will carry the extra 3 per cent.
It does not arise on this Bill. The Deputy will get every opportunity to raise it elsewhere.
If the Department do not carry the cost the county council will have to levy it on the farmers. I want an answer to my question.
(Cavan-Monaghan): I am not saying it in any disagreeable or bad-tempered way but this House is not being treated properly in regard to this measure. Only a member of Fianna Fáil can put down an amendment that will be effective and that I accept, but we expect at least that the Minister would justify certain consequences of the Bill. We expect him to answer arguments that we put forward. I regret that the Minister is simply relying on the 84 Fianna Fáil Deputies and he does not think it necessary to put forward any argument in support of the measure. Fianna Fáil Deputies are so thoroughly ashamed of the measure, even Deputies from the Minister's constituency, that the nearest they will come to the Chamber is to look across the barrier. I do not blame them for that but at least the Minister should answer points raised by the Opposition.
The first point I put to the Minister was to ask him to deny that this is a measure to extract more rates from farmers irrespective of their liability for income tax. On Second Stage he asserted that farmers could set off the increased rates against their income tax. I invited him to put down an amendment to exempt farmers from the savage increase that will result from this Bill unless they are liable for income tax. I repeat that invitation now and say I am entitled to an answer.
The second point I put to the Minister was to comment on the disgraceful method being adopted to investigate the entitlement of farmers to relief under this Bill by invoking the Inspector of Taxes or the Revenue Commissioners and making it obligatory on them to discuss confidential information given by taxpayers. I should like the Minister to comment on that and to say how he justifies it.
The third point with which I asked him to deal was to explain why farmers are expected to pay their income tax 18 months in advance if this is supposed to be a payment on account of rates. If it turns out that they are not liable to pay income tax, not alone will they not get interest on their money but they will not even get back the capital they have paid. I should like the Minister to answer those three points.
I will take the last point first. Naturally after one year there will be no discrepancy in the time with regard to claims. They will be able to claim the previous year's rates as they go from year to year. There may be an interval in the first year but that is all.
With regard to the Finance Bill, I suggest that Deputies raise this matter on the Finance Bill. That Bill states that a secretary or clerk of a local authority can look for information relating to the occupation of land by the claimant and the rateable valuation thereof. That is all that is stated in the Finance Bill.
(Cavan-Monaghan): That is departmental jargon. I suggest that the Minister looks at section 45 of the Bill.
It is a matter that can be raised on the Finance Bill. With regard to the first point raised by the Deputy, namely, the introduction of an amendment, the answer is that I will not introduce such an amendment. The Deputy has accused me of not answering the points he raised but not one single point has been raised this afternoon that was not mentioned on Second Stage and answered in full.
(Cavan-Monaghan): Does the Minister admit that this is a procedure to extract more rates from farmers irrespective of their liability for income tax?
Let me emphasise that this Bill is solely for the purpose of providing £38.5 million relief of rates to the farming community. If the Bill was not brought in we could not give the relief.
(Cavan-Monaghan): Section 1 (1) grants the £38.5 million referred to by the Minister. It has been granted every year for the past 50 years and the Minister need not make a compliment of it. If that is his only argument it shows how bankrupt he is of any argument. The farmers got this benefit every year——
Since Fianna Fáil introduced it.
(Cavan-Monaghan): They got it long before Fianna Fáil were heard of. I want the Minister to justify subsection (2). It takes £7 million from farmers this year in addition to the subsidies on fertilisers that were withdrawn. At the current rate a sum of £9.3 million will be taken from farmers next year. There is no defence for this measure. Every Fianna Fáil backbencher knows that and the Minister knows it. The Minister has not been honest about this Bill.
Subsection (1) repeats what has been done for a long time. Subsection (2) extracts rates from farmers without reference to their liability for income tax and the Minister should be man enough to admit it. The Minister for Agriculture, the guardian of the farmers' rights, should have come to the House to say something about this measure. I wonder what he said at the Cabinet table? The only Minister who put his head in here was the Minister for Labour.
In regard to the point about other Ministers coming in here I spent four-and-a-half years watching different National Coalition Ministers on their own on different Bills which had to do with particular issues. I did not see any of the Minister's colleagues coming in here to help him out or stating the case for him.
(Interruptions.)
Would the Minister please answer my question about the 3 per cent extra charge on the county council as a result of the National Wage Agreement? Who will bear the cost? Is it the county councils or will the Government pay their share of it?
There have been wage agreements for many years and in the estimates of the different councils they have been taken into account. They have been able to anticipate a certain figure. This is not the first year we had a wage agreement nor is it the first year the estimate was struck and agreed before the wage agreement was negotiated or announced.
It is the first year we have had an 11 per cent limit on the amount we could charge on the rates. As a result of that we cannot charge the extra 3 per cent which is a very heavy burden. The ratepayers would like to know where the 3 per cent is to come from. The Minister must admit that it is the first year that an 11 per cent limit was put on the rates.
We are not discussing the 11 per cent limit but there are many counties which, when they were free to strike their own rate, did not even increase the rate by 11 per cent over the previous year. I will give a simple example. Dublin County Council, a Coalition-dominated council, increased the rate by 5½ per cent the year before last. What is the relevance of the 11 per cent?
That is not answering the question I asked. The Minister told us in a circular that we were to make provision for 5 per cent for the National Wage Agreement, which we did. This has now gone up to 8 per cent. There is a deficiency of 3 per cent now. Will the Minister shoulder that or must we hand it back to the farmers next year?
Let me clarify something here. I did not mention 5 per cent in the circular to local authorities.
That is what we were told to provide for.
I do not care what the county council were told. It is not true and I did not mention it.
If the Minister did not mention it the Minister for Finance did.
The Minister for Finance did not send any circular to do with rates.
He mentioned that the amount of the National Wage Agreement would be 5 per cent.
The Deputy said it was my circular. It was not.
We will get the farmers to carry that 3 per cent as well.
I do not see anything about national wage agreements in the Bill. The Chair is bound to bring to the notice of Deputies that we seem to have a Second Stage debate now. This is Committee Stage.
Subsection (2) states that the effective ceiling for the relief is the amount standing specified on the first day of that year, in section 15 (3) of the Finance Act, 1974. The figure contained in the 1974 Act was £100. The section is interpreted in such a way that any subsequent amendment in a Finance Bill to section 15 (3) of the 1974 Finance Act automatically takes effect. It will not then be tied to the £100. Would the Minister not be prepared, rather than leave the thing open as it is so that in any subsequent Finance Bill the figure could be altered to £40, £30 or £20, to specify in this Bill £75 for this year and £60 for next year. What objection would there be to doing that? That would not impose any charge on the Exchequer because the money has already been provided on that basis. It would merely tie the Minister to having to come in here again if he wants to make any change in the ceiling above which the reliefs do not operate. Would the Minister consider incorporating the figures £75 for this year and £60 for next year in the Bill?
This Bill says:
... rating equals or exceeds the amount standing specified, on the first day of that year, in section 15 (3) of the Finance Act 1974.
In 1974 it was £100 and it has been amended from year to year. It is the section as amended. The section as amended last year specifies £75 and in the current Finance Bill it will be £60, so there is no great difference between doing it that way and introducing an amendment specifying the same thing.
I pointed out that it is possible for future Finance Bills to provide that the thresholds may be even £20 or nil. We cannot discuss that now because we do not know what might be contained in a future Finance Bill. If that change were to be made and if the reliefs were to be withdrawn from everybody from £20 valuation up there should be another Rates on Agricultural Land (Relief) Bill coming before the House to discuss that major change in policy.
I am asking the Minister a very reasonable thing which complies with what his intention is, to confine the operation of subsection (2) of this Bill to valuations in excess of £75 this year and £60 next year. Why could the Minister not put in an amendment to that effect? That is what he wants to do anyway.
There will be another Rates Relief Bill next year as this only covers this year and next year. It is the specified figure at 1 January under the Finance Bill. I do not know why the Deputy fears that there could be another Finance Bill during the course of the year. The Bill says that sum as of 1 January.
As I understand it there is nothing to prevent the Minister for Finance changing the position by merely altering the amount specified. It now stands at £60 and he could reduce it by an amendment to the Finance Bill, which has not even been discussed on Second Stage let alone Committee Stage. The figure at the moment is £60 for next year. This could be amended at any moment during the passage of the Finance Bill or in a subsequent Finance Bill. The argument for this Bill which the House is being asked to accept is that this only extends to people above £60 valuation. Why does the Minister not specify that in the Bill and we could have a discussion on the matter in another Bill if there is any change.
It is specified in the Bill. The figure for this year is £75 under last year's Finance Bill. This year's Finance Bill states £60 as from 1 January next.
Why does he not put those figures in this Bill?
It is not necessary to do it. It is just as effective as it is.
It would be much simpler to put in the figure £75 or £60 than to put in this gobbledegook about "the amount standing specified, on the first day of that year, in section 15 (3) of the Finance Act, 1974". Anybody reading it would not know what it meant unless he consulted the Finance Act, 1974. In that he would find the figure of £100 and he would say : "What does this mean"? He would have to read every Finance Bill since 1974 to find out if there were any changes made in section 15 (3), and that would be an immense legal exercise for anybody who wanted to enquire what in effect the legal position was. If the Minister specifies a figure of £75 this year and £60 next year in the Bill there would be no misunderstanding or need to go reading through reams of statutes.
I do not see how it is necessary for anyone to read through reams of statutes for this purpose. It has been made absolutely clear in the debate on the budget that it is a draft figure for income tax from the farming community that is involved, and this is not one and the same figure. There is nothing wrong or unreasonable in having it as it is in the Bill.
Deputy Bruton is asking what it means.
It is the figure in the Finance Bill.
That could be anything.
Could the Minister not just put it in?
No.
(Cavan-Monaghan): I with my colleagues have done my best to try to get the Minister to justify this Bill. I tried to get him to argue out the merits of it. In the absence of any right to put down amendments I have tried to invite the Minister to consider reasonable amendments so as to protect the poorer bracket of farmers within this group from an increase in rates, but he has refused to do it. Obviously he has decided to betray the farmers and to go back on all the promises he made to them. It is quite obvious that because he has a majority of 84 in the House he does not give a damn about the farmers and he hopes they will forget. He is not prepared to talk or reason this out. He is prepared to rely on his majority of 84 steamrolling this Bill through the House. I would be wasting my time if I tried to get him to argue in a reasoned way the merits and demerits or to justify this Bill. It is obvious that the Fianna Fáil contribution to this Bill would be a steamrolling operation. The back benchers in this Dáil did not speak on this Bill because either they were excluded from this House or they could not be got in.
We have done a good service to the farmers and to the people by ventilating the dishonesty of the Fianna Fáil Party in Government in going back on the solemn promises in their manifesto at the election.
What promises does that break?
(Interruptions.)
(Cavan-Monaghan): The farmers might forget income tax and rates, but it is obvious that they are there. When they come into the House they are sneering and laughing cynically at the farmers who are being fooled by this.
This is a general debate which we have had. Is there no matter to be raised on the section?
(Cavan-Monaghan): I have concluded.
Question put.
The Committee divided: Tá, 71; Níl, 41.
Tá
- Ahern, Bertie.
- Ahern, Kit.
- Allen, Lorcan.
- Andrews, Niall.
- Aylward, Liam.
- Barrett, Sylvester.
- Brady, Gerard.
- Brady, Vincent.
- Briscoe, Ben.
- Brosnan, Seán.
- Browne, Seán.
- Burke, Raphael P.
- Callanan, John.
- Calleary, Seán.
- Cogan, Barry.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Gerard.
- Cowen, Bernard.
- Cronin, Jerry.
- Daly, Brendan.
- Davern, Noel.
- de Valera, Síle.
- de Valera, Vivion.
- Doherty, Seán.
- Fahey, Jackie.
- Faulkner, Pádraig.
- Filgate, Eddie.
- Fitzgerald, Gene.
- Fitzsimons, James N.
- Flynn, Pádraig.
- Fox, Christopher J.
- French, Seán.
- Gallagher, Dennis
- Gallagher, James.
- Gibbons, Jim.
- Herbert, Michael.
- Keegan, Seán.
- Kenneally, William.
- Killeen, Tim.
- Killilea, Mark.
- Lalor, Patrick J.
- Lemass, Eileen.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leonard, Tom.
- Leyden, Terry.
- Loughnane, William.
- Lynch, Jack.
- McCreevy, Charlie.
- McEllistrim, Thomas.
- Meaney, Tom.
- Molloy, Robert.
- Moore, Seán.
- Morley, P.J.
- Murphy, Ciarán P.
- Nolan, Tom.
- Noonan, Michael.
- O'Connor, Timothy C.
- O'Donoghue, Martin.
- O'Hanlon, Rory.
- O'Kennedy, Michael.
- O'Leary, John.
- O'Malley, Desmond.
- Power, Paddy.
- Reynolds, Albert.
- Tunney, Jim.
- Walsh, Joe.
- Wilson, John P.
- Woods, Michael J.
- Wyse, Pearse.
Níl
- Barry, Peter.
- Barry, Richard.
- Begley, Michael.
- Bermingham, Joseph.
- Bruton, John.
- Burke, Joan.
- Clinton, Mark.
- Cluskey, Frank.
- Collins, Edward.
- Conlan, John F.
- Corish, Brendan.
- Cosgrave, Michael J.
- Creed, Donal.
- Crotty, Kieran.
- D'Arcy, Michael J.
- Deasy, Martin A.
- Desmond, Barry.
- Enright, Thomas W.
- Fitzpatrick, Tom (Cavan-Monaghan).
- Flanagan, Oliver J.
- Gilhawley, Eugene.
- Griffin, Brendan.
- Harte, Patrick D.
- Hegarty, Paddy.
- Horgan, John.
- Keating, Michael.
- Kelly, John.
- Kenny, Enda.
- Lipper, Mick.
- Mannion, John M.
- Mitchell, Jim.
- O'Brien, Fergus.
- O'Brien, William.
- O'Donnell, Tom.
- O'Keeffe, Jim.
- O'Toole, Paddy.
- Quinn, Ruairí.
- Ryan, Richie.
- Taylor, Frank.
- Treacy, Seán.
- Tully, James.
Tellers: Tá, Deputies P.J. Lalor and Briscoe; Níl, Deputies Creed and B. Desmond.
Question declared carried.
SECTION 2.
There is an amendment to the section which cannot be accepted on the ground that it was received at unduly short notice.
May I take it that I shall be allowed to speak about the subject matter of that amendment in such a manner as to enable me to reintroduce it on Report Stage?
The Deputy may speak on the section.
Question proposed: "That section 2 stand part of the Bill."
The Minister should be requested to provide information to the House on a regular basis in relation to the amount of rates collected from farmers who have to pay the increased rates but cannot set them off against income tax because of insufficient income. Second, I would ask that in respect of each rating authority a report should be made annually to the House on the number of people whose valuations are exceptionally high, namely, more than £1 per acre, and who are, therefore, severely hit by this Bill. Third, in any year in which the rates increase for farmers is in excess of the rate of increase in agricultural incomes as determined by the Central Statistics Office, that information also should be put before the House.
The Deputy will appreciate that there is nothing in this section except the Short Title, Collective Citation and——
I am merely introducing this matter in order that I may be able to introduce an amendment on Report Stage.
If and when the amendment comes up on Report Stage the Deputy will have an opportunity but he may not discuss it now.
The Chair will appreciate that if I do not raise the matter on Committee Stage I cannot move an amendment on Report Stage.
We will take it that the Deputy has raised the matter.
On the section, the Title of this Bill is a misnomer. The reality is that this is not a relief Bill, it is a withdrawal of relief Bill and it should be so described. Allowances which have traditionally been available to farmers have been withdrawn and that should be incorporated in the Title.
(Cavan-Monaghan): Most Deputies were shocked when they read this Bill. On the Order Paper, the Bill was described as the Rates on Agricultural Land (Relief) Bill, 1978. When Deputies got the Bill in the post they expected to find a Bill to relieve rates on agricultural land. Nothing could be further from the truth. If this were a new Bill, dealing for the first time with the subject of rates on agricultural land, and if it did not have any predecessors there might be an excuse for calling it a rates relief Bill. As we know, agricultural land has been relieved from rates for many years. It is clear from the very citation in the Bill that there has been relief from rates since 1939 at least. In effect, what has been done in this Bill is to take away part of the relief that has been enjoyed by a category of rated occupiers of agricultural holdings for a great number of years. The Minister keeps on saying that in effect it is a Bill to provide for relief to the tune of £38 million for farmers. That is true but I say “thank you for nothing”. There is nothing new about that. That has been the position for at least 30 or 40 years. What is new in the Bill and what would identify it in the minds of the public, in the minds of farmers, in the minds of those affected, is that it is a Bill to deprive farmers with valuations of £75 or over this year of relief in rates and to deprive farmers with valuations of £60 from relief in rates as from next year. How the Minister can describe it as a rates relief Bill I do not know. It would be much more accurate to describe it as a relief withdrawal Bill. If the Minister wants to split hairs about it he could go so far as to call it the Rates on Agricultural Land (Relief and Withdrawal of Relief) Bill but its present title is completely erroneous. The record should show that Deputies who think it worth their while to contribute to this debate understand the Bill for what it is, a procedure to deprive farmers of £7 million this year and of £7 million to £9 million next year. I would like the Minister's views on the subject.
It should be remembered that the Bill brought in in 1976 for the relief of rates on agricultural land has expired and if this Bill were not introduced and passed by the House it would not be possible to give any relief on the agricultural rates this year or next year. This Bill is giving relief to the tune of £38.5 million and it is beyond my comprehension how the Bill could be named in any other way.
It is purely a legislative accident and no more that the Agricultural Land (Relief) Bills in the past have not been of unlimited duration. This is a legislative rarity with very little justification because most Government expenditure is justified by Bills which are of unlimited duration. As it is drafted this one must be renewed every two years but there was nothing to stop the Minister, if he so wished, from saying: "This Bill shall apply until further notice." As we all know the reality is that the reliefs contained in the 1976 Act had existed in previous Acts for a considerable length of time and in the normal course of events the 1976 reliefs should have been reintroduced this year. The effect of this Bill is to withdraw reliefs, and that reality should be reflected in the Title.
This is the Rates on Agricultural Land (Relief) Bill, 1978. I have described its purpose and why we had to introduce it. In 1976 we had the Rates on Agricultural Land (Relief) Bill, 1976. The effect of that Bill was to withdraw the employment allowances but the Coalition Government then did not decide it was wrongly named.
(Cavan-Monaghan): I will not again go through the history of land policy in the past number of years but I will summarise it. The policy under Coalition and Fianna Fáil Governments has been towards the abolition or the reduction of rates, towards the elimination of various hereditaments from rates. If this Bill were to follow that pattern it would have extended or increased the reliefs.
They were not extended in 1976.
(Cavan-Monaghan): Instead of increasing the percentage reliefs it has been drastically reduced in this Bill because farmers' rates this year will be increased in category by 66? per cent at £75 up to 80 per cent in another bracket. How in the name of goodness can the Minister honestly say this Bill is similar to others in previous years? This is part of the make-believe the Government are engaged in. They try to tell the people they would have reduced unemployment by 25,000 by the end of this year yet they have by some means succeeded in reducing it by only 6,000 so far.
This is becoming a general debate.
(Cavan-Monaghan): I am making only passing references to these matters. They are making believe that they are reducing prices when prices are being increased. They stick a label on something and hope the people will accept it. This Bill is another part of the make-believe but its provisions will rub salt into farmers' wounds because it will increase the rates on agricultural land, though the Government say it is a relief Bill. It would drive anybody round the bend. It is no wonder Deputy Daly over there could not sit in one seat. He wriggled from place to place until he finally left the House in disgust. If people fall for this sort of thing they deserve the treatment they are getting.
I suggest to the Minister that he should do the honest thing and introduce an amendment on Report Stage to change the Title to the Rates on Agricultural Land (Increase) Bill. Then people looking for the Act in the Stationery Office would know where to find it. When they find this Bill and look at its title they can go on holidays in expectation of reliefs they will never get. It is very hard to be patient with this sort of codology.
How about the £38.5 million?
(Cavan-Monaghan): That is only repeating the prescription. Those in the £75 valuation bracket next year and those in the £60 valuation bracket the following year will not be too concerned with that £38 million because they will say it is for the other fellow. There will not be the slightest rejoicing among them. The people in the lower brackets who will get relief will say: “That is what we expected. That was the position last year and the year before. We expected a little more.” They will say: “Thank you for nothing.” I suggest that the Minister should become frank with the people and put the record straight by calling this Bill by its proper title.
I allowed the Deputy to make a passing reference but this seems to have become an interminable passing reference.
(Cavan-Monaghan): This is a serious matter.
Yes, but not in order.
(Cavan-Monaghan): We are on section 2 which gives the Title of the Bill and I suggest the Bill should have the proper Title so that people looking for it, lawyers or ordinary laymen, will be able to find it. They will know under what description to get it in an index. No man, or his mother, if I may put it that way, would expect to find this Bill containing the provisions it does under its present title and I ask the Minister to have another look at it between now and Report Stage. I may add we will be putting down an amendment on that stage to the Title.
The Minister referred perhaps with some justification, to the title of the 1976 Bill pointing out that that Bill also withdrew a relief, namely, the employment relief. Perhaps it was mistitled too and, if it was, I am prepared to accept that, but I am not prepared to accept that there is any real proportionality between the withdrawal effected in the 1976 Bill and the withdrawal being effected by this Bill. Remember, the employment allowance at that time had remained at the same level for many years and had no real effect in either reducing rates or encouraging employment on the land. To have had an effect it would have had to be increased very drastically and to try to equate that minor relief and its withdrawl with the very radical withdrawal being effected under this Bill is to equate two things which are not equatable. The Minister should reconsider this Title by withdrawing altogether the word "relief" or finding a more apt title such as that suggested by Deputy Fitzpatrick.
My last point is—the Minister might consider responding to this—that this Bill is very difficult to read. There is a tremendous number of cross-references—the Finance Act, 1974, the Local Government Act, 1946, and the Rates on Agricultural Land (Relief) Act, 1946—and one has to consult all these to understand fully what the position is.
They would be more appropriate to the Fifth Stage.
Would the Minister consider codifying this legislation?
That would defeat the whole purpose of the Bill.
Codification would ensure that the position would be clear and farmers and others would have easy access to one Act instead of having to wade through this extremely turgid and difficult Bill involving numerous cross-references to other statutes.
Question put and declared carried.
Title put and declared carried.
Bill reported with amendments.
Report Stage ordered for Wednesday, 10 May 1978.