If Ministers are allowed to circulate documents with the Official Report I do not see why other Members are not allowed to do so, but I will not pursue that.
Page 9 of the Fianna Fáil manifesto which summarises the impact of the economic programme which Fianna Fáil outlined in the previous eight pages says at paragraph 8:
The impact of this programme can be summarised as follows: 1. Reduction in Unemployment 1977, 5,000; 1978, 20,000; 1979, 25,000; 1980, 30,000.
Fianna Fáil promised a reduction in unemployment not the creation of new jobs. If Fianna Fáil meant the creation of new jobs rather than a reduction in unemployment they would have put the words "creation of new jobs" in the manifesto opposite the figures I have quoted.
To reduce unemployment there must be an agreed measure of unemployment. The Fianna Fáil Party never ceased quoting the live register when in opposition as a measure of unemployment and never ceased referring to the increases which took place in the live register in the previous years, so presumably they accepted that the live register was a measure of unemployment. If there is any reduction in unemployment there should be a corresponding reduction in the live register. Any reasonable person reading the manifesto would assume that a reduction in unemployment would mean a reduction in the live register. If Fianna Fáil do not accept the live register as a measure of unemployment, they have now been in office for 10 months and they had the power of the whole State machine to produce an alternative measure of unemployment. They have not produced an alternative measure so one must presume that they accept the live register as an accurate measure.
Fianna Fáil promised in the last general election campaign, a reduction in unemployment and therefore a reduction in the live register of 20,000 for this year. That is what Deputy Quinn said and what the Minister for Finance sought to contradict him on. It seems that the Minister for Finance either did not read the manifesto or forgot what it contained or did not choose to state his knowledge of what it contained. The manifesto is clear and while I cannot circulate it with the Official Report any Member of the House who wishes can read what it contains in the Library.
The Minister for Finance by interrupting Deputy Quinn commenced this discussion and sought to pretend that the creation of jobs meant a reduction in unemployment. It does not mean that. If a job was created on 10 May and on the same day there was a redundancy either in the same firm or in another firm, unemployment would not have been reduced. If a job was created for somebody who was not previously employed, somebody who has just left school, there is no reduction in unemployment. One could not count people who are still at school as being unemployed and if a job is created for a school leaver there is no reduction in unemployment. The Minister for Finance seems to be claiming that if jobs are created there is a reduction in unemployment. Another possibility is that a new job could go to somebody who had not been previously seeking employment such as a married woman who up to the coming available of a job as a result of Government action had been happily at home not seeking employment but because a job becomes available she takes it. There is no way that it can be claimed that by simply creating 20,000 new jobs one reduces unemployment by 20,000.
We will hold the party opposite to the promises they made in relation to the reduction in unemployment of 5,000 in 1977, 20,000 in 1978 25,000 in 1979 and 30,000 in 1980. The people will remember these figures and between now and the next general election if the Government do not achieve what they promised people will know.
In relation to the section of the Finance Bill dealing with personal allowances, in principle all Members of this House will welcome the improvements in some of the personal allowances in the tax. There have been improvements in the allowances for a married man and for a single person; there has been improvement in the allowance for a widowed person but it would be useful to put these increases into perspective. In what I have to say now my criticism can be directed as much at the party of which I am a member in their period of office as at the present Government although they have held office for a much longer period cumulatively over the last 20 years. Let nobody believe that the position of the income tax payer has done anything but worsen in the past 20 years. He is paying proportionately more tax out of income than he was in 1960-61. It must have an effect on incentive to work, if a much larger share of income and of additions to income achieved through extra effort is being taken by income tax now than was the case in 1960-61.
I want to give some figures to illustrate this. I am using as base, the tax year 1960-61, compared with the allowances in the present Finance Bill. In 1960-61 the allowance for a married man was £394 and in this Finance Bill it is £1,730. On the face of it, it looks like a fairly generous increase. It is an increase of 339 per cent. It has not kept pace with the increase in industrial earnings. From June 1960 to June 1977 there has been an increase in industrial earnings, in the income out of which tax is paid, or 632 per cent or, if you take 1961 which is slightly more favourable, the increase from June 1961 to June 1977 has been 592.4 per cent. The increase in the allowance against income for a married man is approximately half the increase in income which has taken place. This means that a married man pays proportionately very much more of his income in tax now than he paid in 1960-61, assuming his income has moved on the same basis as the average.
In the case of a single man, remembering that there has been an increase of about 632 per cent in earnings since 1960, the increase in his allowance is from £234 in 1960-61 to £865 this year. This is an increase of only 270 per cent, significantly less than the increase in the married allowance. I shall not enter into relative needs of married and single persons but obviously the Minister for Finance in 1960-61 was more sympathetic to single people than the Minister for Finance now is, but only marginally, since the increase in the married allowance, as I said, is 339 per cent against 270 per cent for the single person. That 270 per cent is against an increase in the average earnings of single people of about 632 per cent.
The increase in the allowance for a widowed person—this reveals a genuine injustice both in regard to inflation and also in regard to the increase in allowance for both married and single people—has risen from £259 in 1960-61 to £935 in the current finance Bill, an increase of only 261 per cent in that allowance as against an increase of 339 per cent in the married person's allowance and 270 per cent in the single person's allowance. I do not believe that the financial needs of a widowed person have increased by almost 70 per cent less since 1960-61 than the financial needs of a married person. Indeed, many widowed people are far worse off because, as many of them are older people they have diminished physical ability to fend for themselves. It seems to be an injustice that the widowed person's allowance since 1960-61—that takes a sufficiently long period to avoid occasional fluctuations in individual budgets—should have increased by so much less than either the married allowance or the single allowance. All income tax payers are suffering considerably because of the fact that basic allowances for married, single or widowed persons which are between 260 per cent and 339 per cent are very much less than the increases in earnings which are between 590 per cent and 632 per cent since 1960-61.
That is not the worst aspect of it. Many people, because they are widowed, have special problems. I am thinking particularly of a widowed man with young children. He has to go out to earn a living and must arrange for somebody to look after the children while he is away. Under the tax code since 1949, under a Coalition budget, he is allowed a housekeeper allowance which was £100 then and now is £165. That has increased by only 65 per cent since 1949-50. These are people who really need help, whether man or woman. Yet their allowances have been increased by only 65 per cent. I do not know what inflation since 1949-50 has been but I think we can safely say it is about 600 per cent. Therefore, the increase in the housekeeper allowance is only approximately one-tenth of the increase in inflation since then. It is only one-sixth of the increase in the married person's allowance since 1961. Although the housekeeper allowance has been in existence since 1949 it has only increased since then by one-sixth of the amount by which married person's allowance has increasel since 1961, 20 years later.
The same applies to the dependent relative allowance which relates to the 1956-57 Coalition budget. Again it is a very well-merited, sensible and a good allowance and one that saves the Exchequer money. Many Members must know of cases in their constituency where a couple decide to look after one or other of their parents in their own homes, to look after people who would otherwise have to go to a county home or some old persons' establishment where they would be maintained at a very high cost to the State. Yet the tax allowance which such a married man or woman is given for looking after a dependent relative has increased by only 58 per cent since it was introduced in 1956-57. When it was introduced the allowance was £60 and stands now at £95, an increase of 58 per cent in 20 years. If that is not an injustice in the code I do not know what anybody could describe as an injustice. When one compares that with the increase in the allowance for married persons of 339 per cent and with the increase in earnings of 632 per cent since 1960-61, one can see the enormity of the injustice done to the people who are more in need than the ordinary married couple, both of whom are in good health.
I am sure everybody agrees that the person who is a widower and has to bring in a housekeeper or the person who must look after an elderly relative is more in need of help through the tax code than the ordinary regular married couple or the ordinary regular single person, like myself, whose expenses are not all that enormous. A single person like myself has got an increase in tax allowances since 1960-61 —I was not paying tax in that year— of the order of 270 per cent. It is unjust that single people should have been given such an increase and that a person who looks after an elderly relative or a relative not able to fend for himself should only get an increase of 58 per cent. That should be attended to by amendment to this Finance Bill.
I looked up these figures at the weekend and it was only as a result of doing some calculations that I discovered the difference in the rate of increase in the various allowances. I cannot imagine how a Minister or some of his officials —in this criticism, if it can be called a criticism, I must include my own colleague—did not discover the blatant injustice disclosed in the figures I quoted. I should like to refer briefly to some other allowances where the case is not as clear but where there is also an indication of a degree of injustice. According to my calculations children's allowances, which were first introduced in 1966-67, have only increased by 100 per cent for children under 11 and by 60 per cent for children over that age since they were introduced. I am sure I can safely say that inflation since that year has gone up by about 200 per cent. That is also unjust. We should encourage large families. It is not a good thing that the increases in children's allowances should be so small by comparison with the rate of inflation and with the increase in married or single person's tax allowances.
An allowance is given for an employed person taking care of an incapacitated individual. That was introduced in 1969-70 but it has only been increased by 65 per cent since even though inflation has gone up by 200 per cent in that period. That is also unjust. I suppose any Minister for Finance faces the problem that all political pressures are on him to look after the big number of votes that can be got by looking after those who are concerned about married and single allowances.
The number of people who are employed and taking care of an incapacitated individual, the number of people who must take in a housekeeper because they are widowed, the number of people with a dependent relative at home, while significant is not big enough to win an election. If one succeeds in getting them on one's side one does not win an election. I suppose successive Ministers for Finance, looking for a good cosmetic budget, for something that would appeal, have always tended to look at the basic allowances and forgotten about the other allowances. That is not the way the tax code should operate. It should not operate strictly on political considerations but on the basis of equity and justice. I do not believe that the categories of persons I have mentioned have been treated with equity or justice by successive Ministers for Finance. I hope that by bringing these figures to the notice of the House that it will encourage the Minister to make changes in the next Finance Bill. I accept that the Minister has made this calculation in relation to this Finance Bill and that it may not be possible to change it at this stage, but he should bring about dramatic increases in the various allowances in the next Finance Bill. None of the allowances I mentioned has kept pace with the rate of increases in industrial earnings since 1960-61. Therefore, proportionately more of the income of some people is being taken by tax.
I should like now to deal with the provisions in relation to farming taxation. Most of these are matters that can be teased out in the course of the debate on Committee Stage. There are certain matters which need to be clarified. There has been a suggestion made that, if a man at any stage in his career as a farming tax payer opts for the accounts system, he can never again go back to the notional system. I am aware that the Bill states clearly that a farmer who opts for the notional system must stay on it for three years but I heard it claimed by a reputable tax consultant who knows financial legislation better than I that this will be the case. It is very hard to understand such legislation and one would need to have the whole groups of Finance Acts in front of one to find out what is meant in any one of them. It is like the old missals with cross-references to different pages and eventually you are completely confused unless you are very good at retaining what is said in about four other different places when you are reading something said in one place. Apart from requiring people to stay on the notional system for three years, there is a suggestion that, if people opt for the accounts system, they must stay on it indefinitely and cannot go back onto the notional system. I would ask the Minister for State if he would ensure that the Minister for Finance will clarify this point when he is replying, because it could prevent problems arising on Committee Stage.
There is a serious, and to a large extent inexplicable, injustice in the farming tax proposal in so far as it provides that if you go onto the notional system you must stay on it for three years. Under the notional system, instead of assessing your actual income, your income is assessed on a multiplication of the poor law valuation of your farm. Under the present Finance Bill, your income is assessed at 90 times the valuation of your farm. If you have a farm valuation of £100, your income is assessed at £9,000. That is just the figure for this year.
A farmer is told that if he opts to go on the notional system this year on the figure of 90 he must stay on it for three years, but there is nothing to stop the Minister for Finance saying next year that 90 is no longer an appropriate multiplier and increasing it to 200. The farmer may have made his calculations and said "The notional system is a fair and simple system for me this year on the basis that the multiplier is 90, and I will go onto it". Next year he may find it has been increased to 200. All his calculations must be changed. He changes them but finds he cannot go off the notional system. He must stay on it at 200. The following year the Minister for Finance may increase the multiplier to 400. The farmer is still stuck on the notional system. He cannot get off it.
A farmer with a valuation of £100 who went on the notional system in 1978 with a multiplier of 90 would be considered to have an income of £9,000 and, with all the allowances. that might be reasonable. But if the multiplier was changed to 400 in two years' time, even though he might make a loss in that year, he would be told that for the purposes of income tax his income in 1980 was £40,000. There could be no argument. There would be no possibility of saying he made a loss. He would be told "It does not matter what loss you made. You went on to a notional system in 1978. You are on it now. The Minister increased the multiplier from 90 to 200 last year and 400 this year, and you must pay on the basis that you earn £40,000". That is unjust. I do not think there is any need for me to elaborate on it. Anybody can see it is unjust. I do not understand why it is necessary to have this requirement.
Under the previous Government. farmers paying income tax did not have to stay on the notional system for three years. They could go on to it for a year. That was possible when we were in office and the Revenue Commissioners were able to operate it. Why has it suddenly become impossible now that Fianna Fáil are in office? Why was this promised? Let us be honest about it. The farmers were not deceived in this respect. They were told in the election campaign that this three year provision would operate. I am not blaming the party opposite for deceiving the farmers on this point. Farmers voted for it. But the fact that the farmers voted for it does not make it any less unjust, and unjust it is.
There is another very important injustice in the tax code. I am not objecting to the principle of farmer taxation. It is fair that farmers should pay the same share of their income as others so long as there is a reasonable allowance for investment. This is accepted by the farming community. The other injustice relates to the rates. We were discussing this yesterday and we were told at certain stages in the discussions, not by the Chair so much as by the Minister, that it was a matter for the Finance Bill and not for him when we talked about the income tax concession.
The fact that farmers will have to pay very dramatically increased rates as a result of the abolition of the primary and supplementary allowances if their valuations are in excess of £75 this year and £60 next year was justified by the party opposite—not before the election but after it—by the provision that they can set off their increased rates against their income tax. In some cases their rates will be increased by 100 to 200 per cent as a result of the abolition of these allowances. We were told by Deputy Briscoe a few moments ago that the Fianna Fáil farmer taxation policy is far fairer than the farmer taxation policy of the Coalition.
This aspect is not fair and I tell the House why it is not fair. It will hit the farmer who makes no income in a particular year harder than the farmer who makes an income. The farmer who makes an income will be able to set off the increase against his income because he will have an income out of which he will be paying income tax. If his income exceeds the amount of his rates, he will get the full allowance for his rates. Let it not be thought in this House that farmers will always make big incomes. They may have had big incomes in some years, or some farmers may have made big incomes, but that will not necessarily always be the case. Indeed, there are indications to the contrary.
Next year and the year after there will be many farmers who will make little or no income, who will make a loss. They will still have to pay the increased rates regardless. If our proposal had been accepted and the rates had not been increased, they would not be paying any income tax. These men will now be paying very dramatically increased rates and there will be nothing to set them off against because there will be no income. That is unjust.
There is another unjust aspect. Members of the House, and particularly Members on this side, will remember ruefully the proposals introduced in the budget of 1977, I think, whereby farmers were asked to pay their income tax on 1 September. The tax year commenced in April and they were to pay tax on account on 1 September. If they paid more than they were entitled to pay they would get their money back with interest which, at the time. exceeded the market rate. If they paid more than they were entitled to pay, in terms of investing money in any security they would do better.
The uproar from all sides not only in this House but outside it against the injustice if this proposal had to be heard to be believed. What are we faced with under this combination of tax legislation, this rates proposal combined with the relief in income tax? The farmer will have to pay the first instalment of his increased rates in April 1978 and the second instalment in July 1978. That is when the tax man will get hold of the farmer's money.
When will the farmer get that money back? It is not a question of waiting a few months and getting it back with interest. Under the proposals of the previous Government, if you paid in September you would get it back with interest the following April. He will get his money back on 1 January 1980. The Revenue will have the use of the farmer's money, money which he is entitled to set off against his income tax, money which he should not have to pay if his income exceeds the amount of the rates. The Revenue will have the use of his money, interest free, for 18 to 20 months, and that is unjust. There are other causes that can be argued in relation to income tax but I will not go into them in detail at this stage.
The Coalition promised to revise the threshold for all capital taxes on a three-yearly basis to take account of inflation. In their 1978 budget they would have been revising all capital tax thresholds to take account of the inflation which has occurred since 1975 when these taxes came into effect. Since then inflation is about 100 per cent. I am directly concerned with land values and they have increased by at least 100 per cent since 1975. We promised to increase all the allowances to take account of increases in property values so that the burden of capital acquisitions tax would be the same as a result of the 1978 Budget as it was when the tax was originally introduced in 1975. That was fair because it meant that we were not going to allow inflation to erode the value of allowances.
When estate duty was introduced in 1894 it was only of concern to a minority. When we promised to abolish it in 1973 it had become a threat to the smallest of family farms in the event of the owner dying. Estate duty was a threat hanging over the head of every farmer who had more than 50 acres. If he died without making over the farm to his successor within five years of his death, the estate duty would be such a burden that his successor would be in debt for the remainder of his life, or part or all of the farm would have to be sold. We said we would not allow what had happened to estate duty to happen to the new taxes introduced to replace it. We said there would be a three-year revision of all the thresholds.
What has happened in the 1978 Budget? Has the Minister for Finance kept the promises that were made by his predecessor, Deputy Richie Ryan? Most assuredly he has not. Capital acquisitions tax applies both to transfers during the lifetime of the donor and to transfers on death, so there is no way of avoiding it. In the case of estate duty, if you lived long enough and could foresee the end of your life you could transfer the property to your successor five years beforehand, thereby avoiding estate duty. That cannot be done with capital acquisitions tax because it applies to gifts inter vivos and to gifts on death.
What has happened to allowances under the capital acquisitions tax? For a transfer either in life or on death to a man's wife, his child or the minor child of a deceased child, that would be a grandchild who was a minor, the Minister for Finance has not chosen to make any increase in the thresholds for those transfers. The most common transfers of property in rural and urban areas are transfers from a man to his son or daughter and from a man to his wife. The Minister for Finance has said there shall be no increase in the thresholds for the application of capital acquisitions tax despite the fact that the value of property has doubled since then. In some cases agricultural land has increased to £3,000 an acre. At the time the tax was introduced the going price was about £700 an acre. As a result of inflation more and more people will be involved in this form of tax.
What happened to the other allowances? In his budget speech the Minister said:
Again the Government has no quarrel in principle with the capital acquisitions tax. I do propose, however, to increase certain thresholds. In particular, I intend to double the threshold in Tables II, III and IV of the Second Schedule to the Act which, I believe, were fixed at too low a level in the first instance. These changes will, of course, involve readjustments to the various ranges within these Tables. The cost of all the adjustments is estimated at £1 million in 1978.
In a manner of speaking, the Minister did that. He doubled it in the case of transfers to one's father, to a lineal descendant other than a child or a minor child—that would presumably be an adult grand child. The minimum threshold was increased by 100 per cent, but it was very deceptive. The threshold had previously been £15,000 and now it is increased to £30,000. One would expect, if increased values justified doubling the threshold at the bottom, that there would have been an equivalent increase in the threshold along the line, whether one moved from the initial rate of 5 per cent up to the next rate or from 49 per cent to 50 per cent. If the increase in land values justified doubling the threshold at the bottom, one would expect the same rate of increase along the line if one were intent on retaining relativities. What has happened? In tables 2, 3 and 4 there are 41 thresholds and only three of these have been doubled, as the Minister for Finance sought to convey in his budget speech. The majority of the thresholds, 26 out of 41, have been increased by less than 30 per cent. For instance, the increase in the threshold whereby one would move from the 49 per cent rate of tax in table 2 has gone up from £208,000 to £223,000, an increase of only 7 per cent.
As far as agriculture is concerned, there has been an allowance in relation to capital acquisitions tax in regard to the valuation of agricultural land. It is accepted that agricultural land is unlike any other commodity because there is a limited amount of it on the market at any one time in comparison with the number of people demanding it. It is structurally liable to be persistently overvalued. The same market forces that apply to nuts and bolts do not apply to land; one can make more nuts and bolts if there is an increase in demand for them, thus bringing down the price. If one's wealth consists of nuts and bolts it is not likely to be overvalued for that reason. This does not apply to land because, as Mark Twain said, they have stopped making it. In recognising that, the then Minister for Finance, Deputy Richie Ryan, in introducing the capital acquisitions tax in 1975 said that the thresholds would be revised and that one could, in respect of agricultural land, have a reduction in its value for tax purposes of 50 per cent, up to a maximum of £100,000. This meant that if one had a farm worth £200,000 it would be valued for tax purposes at £100,000. If one had a farm worth £300,000 it would be valued for tax purposes at £200,000, while a farm worth £700,000 would be valued at £600,000. There was a threshold of £100,000 in the limit to which the 50 per cent reduction, taking account of over-valuation of agricultural land, could apply.
The Minister has not increased that threshold either, notwithstanding the fact that through no fault of farmers who may wish to transfer farms to their sons, the price of the land which they own has gone through the roof. Yet this allowance, which may allow people to have their taxes at less value for the purposes of capital acquisitions tax, has not changed since 1975. There should have been a comprehensive revision of thresholds right across the board and an increase of that limit from £100,000 to £200,000. That would be doing no more than taking account of the rate of inflation. By making those adjustments one would be doing no more than ensuring that the burden of capital acquisitions tax would be the same now as when the tax was introduced. It would not be a question of giving concessions in excess of what was given in 1975; it would simply be a question of making sure that the burden in 1978 is the same as it was in 1975.
Let us turn to the practical implications and the effect on agricultural policy. If a farmer is transferring to his son a holding in excess of 125 acres he is now in the net for capital acquisitions tax. If he is transferring it to his nephew he is in the net if his holding is in excess of about 20 acres. The result of this tax is that no farmer will transfer his farm to his son or his nephew. The Revenue Commissioners accept land values now as being £1,600 an acre, about half the going price. Assuming a farmer with a holding of 150 acres wanted to transfer it to his son, as a result of this Bill he would have to pay £10,750. He would have paid no tax whatever in 1975. Let us take the case of a farmer who has no children but has a nephew living with him and working on the farm. If the farmer had wanted to transfer his 150 acre farm to that nephew in 1975 he would have had to pay £14,150, but under the 1978 Budget he will now have to pay £67,000, assuming the land value to be £1,600 per acre. That is five times as much as he would have had to pay in 1975.
We must accept that farmers do not really want to hand over their land to their sons or their nephews. They want to hold on to it as long as they can because it is a sign that they are still active, a sign that they are still the masters of their own lives, and they do not want to transfer. We all recognise that it is desirable in the national interest that younger men should be brought into ownership of land so that the best returns may be obtained. The owner of land will be told that if he is transferring it to his nephew he will have to pay at least £67,000 and that is assuming the Revenue Commissioners accept a valuation of £1,600 per acre and in view of the way land prices are going at the moment they may not. If the man is transferring to his son he will have to pay at least £10,000. The owner may take the view that he will just hold the land and let his relatives pay when he dies. His view may be, why should he pay £67,000 to give something to his nephew or £10,750 to give something to his son. It is a good question.
Because of the failure of the Government to adjust the allowances every three years, as was promised by the National Coalition, this will put a stop to all the talk about farmers retiring in order to let younger men take over. The Government can produce as many schemes as they like and they can send out 60 inspectors into every county but it will do no good. Now we are going to have socioeconomic advisers in each county committee of agriculture. These people will have the job of telling farmers to transfer their holdings to younger people. What hope would a socioeconomic adviser have of persuading a man to give over his farm to his nephew if he has to pay £67,000 to do it? He would have very little hope —he would be nearly as well off to stay at home.
What will be the situation in three years' time? We promised to adjust the allowances this year but the Minister for Finance is breaking that promise. Previously we assured the people that the adjustment would be carried out every three years but by refusing to do this the Minister has broken the notion that had been fixed, somewhat fragilely, in people's minds that these taxes were not an immediate threat because they would be revised. By failing to make the change this year the Minister has shown clearly that he is not committed to the idea of making a three-yearly revision. The National Coalition promised that the thresholds would be revised in 1978, 1981, 1984 and 1987, but under Fianna Fáil that will not be done. They will give whatever allowances they can whenever it suits them. They are giving some paltry allowances now to transfers at the bottom of the threshold to people other than one's own immediate family but that is all. They are showing that they are not too concerned with the future. The idea of a revision every three years has gone down the drain. This tax progressively will bite larger chunks out of the hard-won property of the farmers. More and more will be taken because the tax will not be adjusted in line with inflation and many more holdings will be caught.
According to the National Coalition a revision should be carried out in 1981. Assuming land values are now £3,000 per acre, let us take a figure of £4,000 per acre in 1981. A farmer with 30 or 40 acres who wants to transfer it to his son will have to pay a substantial amount of capital acquisitions tax having regard to the rate of land values and because of the failure of the Minister to revise the allowance. A farmer with 150 acres will have to pay £150,000 assuming land values continue at the present rate. It is questionable whether there will be any transfers of land in such circumstances.
What has happened in the budget and in the Finance Bill is of great concern in 1978 but it is of even greater concern that the Government have thrown out the promise of the previous Government to have a three-yearly revision of the thresholds. Regardless of what is happening now, it is obvious that in future this tax will be allowed to run riot, that taxation will run riot and property owners will live in dread of transferring their land to their successors.
I cannot understand the mentality of the Minister and his colleagues in allowing this to happen. It has not sunk home to the farming community as yet. They do not realise the full significance of what is proposed in the Finance Bill or the failure of the Minister to honour the promise in relation to revising the thresholds which was made by his predecessor. The farmers or their organisations do not realise yet what this means. If they did they would be a lot more vocal. Up to now they have not been vocal but I think they will. I and my party intend to make sure that they fully realise what has happened. The Minister for Finance will hear a lot more about Tables I, II, III and IV of the Third Schedule.
I do not believe the farmers or anyone else will accept the reintroduction of estate duty. They fought hard and long enough to get rid of it. During the election campaign in 1973 when it was put to them Fianna Fáil refused to abolish estate duty and they were beaten. Now they are back in office and they want to reintroduce estate duty although they will not call it by that name. It was their policy in 1973 to retain that duty regardless of the fact that it was threatening holdings of 30 or 40 acres. They are reintroducing it now because they are not allowing the thresholds to be raised although inflation is rising. That means that small farmers will be involved.
In my contribution I pointed out clearly that the Government are committed to a reduction in unemployment of 5,000 in 1977, 20,000 in 1978, 25,000 in 1979 and 30,000 in 1980. That is a reduction in unemployment, not the creation of new jobs. Secondly, I pointed out that tax-free allowances have not kept pace with the increase in inflation. Since 1961 earnings have increased by 632 per cent, the married person's allowance has increased by only 339 per cent, the single person's allowance has increased by only 270 per cent and the widowed person's allowance has increased by only 270 cent. They have not kept pace with the increase in earnings and it means that proportionately people are paying much more tax now than then.
The housekeeper allowance for a widow or widower who has to employ a housekeeper to look after his children since 1949-50 has been increased by only 65 per cent. The dependent relative allowance since 1956-57 has been increased by only 58 per cent. That is against increases of around 300 per cent in the other allowances which is clearly unjust to the minority of people who are in the dependent relative category or the housekeeper allowance category.
I also pointed out that it is unjust that farmers have to opt for the notional system for three years regardless of the fact that the notional which is now 90 may be increased to 200, 300 or 400 next year. Farmers have been asked to buy a pig in a poke and may be faced with huge tax bills as a result of the decision taken now in the absence of knowledge of what the multiplier will be in two or three years. I pointed out that it is unjust that farmers should have to pay very substantially increased rates which they might not be able to set off against income if in a particular year they had not sufficient income which would put them in the tax net. That is a regressive taxation because it will hit the farmer with no income far harder than the farmer with an income.
I pointed out that this was unjust under this rates provision that the Exchequer should have the use of the farmers' money for 18 months tax free. I pointed out finally that the failure to revise the capital acquisitions tax threshold means that estate duty in its full force, as sustained and supported by Fianna Fáil in the 1973 election, is now being reintroduced by them in 1978.