The interesting thing about the Minister's contribution on the motion to impose the levy, which is contained in substance in his Bill, was his complete failure to make an attempt to defend the principle of this levy. At no time did he seek to justify the idea that a levy of this sort should be imposed. He made a number of what, to use his own words, were totally irrelevant contributions in relation to the urgency of disease eradication, which is not affected in the least by whether or not this levy is imposed. The imposition of this levy neither accelerates nor decelerates disease eradication in itself. The Minister is seeking to pretend that it does, and is not putting forward an argument in favour of the levy.
He referred to what he described completely inaccurately as the total abandonment of disease eradication when the Coalition were in office. He knows as well as anybody else in this House that during that period disease eradication did not proceed as fast as it would otherwise have done because of an industrial dispute on a genuine issue of principle between the then Minister and the veterinary surgeons. It is no more sensible for the present Minister to say that the problems that arose in relation to disease eradication at that time constituted an abandonment by the Government of disease eradication than it would be for him to say now that because we did not have a postal service for the past few months it was an abandonment by the present Government of the postal service. I do not think he or his colleagues would claim that nor that he would claim the Minister for Posts and Telegraphs abandoned the postal service for the past few months. Does the Minister believe the postal service has been abandoned by his Government? I do not think he will say that, but if he uses those words to describe his predecessor he must use them to describe his colleague. He referred to the decline in the cattle herd, the fatal decision to admit cows to intervention and so on, but he did not attempt to defend the levy.
I would like to make a few points. First of all, this levy will be paid, regardless of ability to pay, by every farmer on every animal slaughtered regardless of whether that farmer has a taxable income and regardless of the size of the farm. It will be paid at the same rate, £3 per animal, regardless of the value of the animal. An animal worth £1,000 will pay £3 and an animal worth £10 will pay £3. The levy is one of a number of levies. It is accompanied by a 2 per cent levy which is being imposed across the board on all products. A dairy inspection levy is to follow in a Bill which is before the House. It is accompanied by what is tantamount to a levy in the form of increased veterinary fees, and by a fifth levy to finance the CBF, which is not a controversial matter but is now one of five levies being imposed by the present Government. Yet that Government, who so seem to favour levies as a means of raising revenue, go out to Brussels and try to argue that we should not have a co-responsibility levy for milk. If ever a Government weakened their own bargaining position in the EEC by means of their own policy, this is the best example of it. It is going to be very difficult for them to resist the idea of a co-responsibility levy on the grounds that it is unfair, that it discriminates and does not take account of needs. All these arguments will be put forward for not having a co-responsibility levy on this country because we are a special case and we need to be allowed to encourage milk production without a levy. All those arguments which the Minister will be putting forward against a co-responsibility levy on milk in Brussels can be and are being put forward against the levies which this Minister is imposing in this country. These are exactly the same arguments about not having reference to need, not taking account of special circumstances, not allowing people who have only one means of expanding, namely milk production, to expand. All of those arguments which the Minister is putting forward in Brussels on behalf of Ireland can be put forward on behalf of the farmers here against the levies which the Minister is introducing here.
We are told by the Minister that this levy is to be used for assisting the eradication of disease. We are not told specifically what disease, although the inference is brucellosis and tuberculosis, but no concrete assurance is given that even after brucellosis and tuberculosis have been eradicated this levy will not continue long beyond that date. There is nothing to prevent this levy becoming a permanent levy on all cattle slaughtered and all milk sent into creameries and dairies. From starting out as a form of levy for a particular purpose, after the purpose for which it was set up has been achieved it could become just another part of the general taxation system.
In section 2 of the Bill it is stated that the levy is to be 0.5 new pence per gallon as regards milk and £3 per animal in the case of beef. Under section 2 (5) the Minister may, by regulation, increase the rate of this levy. It could be increased to £9, £10 or £20 per animal simply by the introduction of an order. The Minister would have to get approval of that order from the House under the terms of the Bill, but it would be a simple matter of introducing that order and having it approved by the House, on a short debate with no requirement on the Minister to introduce new legislation if he wished to increase this levy to any amount that he chose. He has the power to increase this levy from its present amount to any amount he chooses by order. In agreeing to this legislation we are giving the Minister power to introduce further taxation at a much higher level by order. We do not give the Minister for Finance power to do that in respect of general taxation. We should not be giving to the Minister for Agriculture power to do this in respect of this form of taxation.
We were told by the Minister that the levy was to be used as a means of paying for disease eradication. If that were the case one would have expected that the proceeds of the levy would have been paid into a separate fund which would be available and usable only for disease eradication, but that is not to happen. There is no provision whatever in the Bill for the creation of a separate fund for this purpose. There is no guarantee anywhere in the Bill that the proceeds of the levy need necessarily be used solely for disease eradication. I will be introducing an amendment on Committee Stage to ensure that such a special fund is set up so that if this levy goes ahead—naturally, one hopes that it will not but that hope is unrealistic in view of the fact that the Government have circulated this legislation—it will be put into a special fund earmarked solely for disease eradication and that the people paying the levy will have an important say in the way in which it is used. I will be proposing that a committee or a group of trustees be set up, including a majority representative of the farming community, to administer this fund, so that those who are paying the levy will have a say in the way in which it is spent. At the moment the Minister is saying to the farmers "you pay the levy and I will decide how the money is spent". That is not acceptable to the farming community if this is really a disease eradication levy.
If this is nothing more than another taxation measure, then it is acceptable for the Minister to say "I will decide it because this is taxation", but he has pretended and sought to portray that this is not a taxation measure but a special disease eradication levy. If it is a special disease eradication levy, why is it not being earmarked for a special fund in disease eradication? Why are the people directly involved in disease eradication not being given a say in the way in which it is spent? The evidence is that this is just another means of taxation under another guise and that the Minister for Finance, who does not like introducing taxation himself, has come up with the very good idea of getting other Ministers to introduce taxation measures by making them impose levies for their individual purposes and thereby himself avoiding the odium of having to come into the House and impose taxation. He gets other Ministers to introduce levies which are not supposed to be taxation but which are nothing but taxation, because there is no guarantee that they will be used for the purposes for which ostensibly they are being introduced.
The Minister seemed to pretend that this levy would not be paid by small farmers in respect of cattle because the majority of small farmers do not at the moment produce cattle directly for slaughter, although that is not to say that they should not do so if the opportunity were given to them. They usually produce them for further fattening by other farmers who finally send them into slaughter-houses. The Minister was seeking to pretend that in that situation the levy would be paid only by the fattener and not by the small farmer producing the store beast. This is not necessarily the case.
In the situation which can easily occur where the supply of cattle for fattening exceeds demand the buyer will have greater strength than the seller, namely the small store producer from the West. There is no way in which the Minister can stop the fattener passing on the levy in full and, perhaps, on the double in the form of a reduced price to the smaller farmer. When supply exceeds demand the buyer has the greater bargaining strength. That is a simple axiom of economics which I am sure the Minister understands. In those circumstances the levy will be passed back to the producer, whose need to dispose of the animal is greater than the need of the buyer to acquire it. I am not contending that this situation will arise at all times; it will arise at those times of the year when demand for store animals is less than supply.
Equally this levy will be paid by the consumer and not by the fattener of cattle when the demand for beef exceeds supply. The butcher will need beef so badly to keep his customers happy and his own employees in work that he will have to pay whatever price is demanded. He will not be able to pass back the levy to the fattener but will have to pass it on to the consumer. It is a simple matter of understanding the economics of supply and demand. In certain circumstances the levy will be paid by the consumer and in other circumstances by the small store producer. The Minister says it is not intended that the levy should be paid by either of these, but this legislation does not contain any provisions which would protect them from paying the levy. It is perfectly impossible to prevent the levy being paid by the consumer in the circumstances I have described in the absence of any retail price control of meat. Because of the varieties of cuts and qualities of meat it would be impossible to administer such a system of retail price control. Where demand for meat exceeds supply I state categorically that this levy will be paid not by the farmer or the butcher but by the consumer, and the Minister has no means at his disposal to prevent this.
The essential objection to a levy as a means of taxation is that there is no control in a free market situation as to where the levy will fall. This is a fundamental canon of public finance. The levy will not necessarily fall on the person who is supposed to pay it. Depending on circumstances in the market, it will fall either on him, on people to whom he is selling or from whom he is buying. The Government have no control over this levy or any of the other four levies which they have introduced. There is injustice as between farmers big and small and in its potential incidence as a tax on consumers and on small farmers. This is a fundamentally wrong way of paying for disease eradication.
The Minister for Agriculture said there was no mention on this side of the House of other means of paying the expenses which arise in respect of disease eradication. It is for the Minister and his colleagues in Government to find means of paying for the programmes they are implementing. The Opposition should not have to tell them how to raise taxation. The argument put forward by the Minister to justify his levy that the Opposition have not come up with anything better is certainly the argument of someone who has failed utterly to find any self-sustaining justification for what he is doing and has to find justification in the absence of arguments from other people who are far less well placed and have far less access than the Government to sources of information. It is no argument for any Government to say that their course of action must be right because the Opposition have not come up with anything better.
My personal opinion on this matter has been put on record on a number of occasions. I believe that the farming community should pay taxation on accounts on what they actually earn. Farmers who have a net income which exceeds their tax-free allowances should ultimately pay taxation on accounts just as everyone else. This is the system which obtains in Northern Ireland. I suggest that the Minister for Agriculture, the farming organisations and the Revenue Commissioners should examine that system with a view to its implementation here. This is a personal suggestion made on my own behalf.