Dáil Éireann debate -
Tuesday, 22 Apr 1980

Vol. 319 No. 9

Rates on Agricultural Land (Relief) Bill, 1980: Second Stage.

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

Minister of State at the Department of the Environment (Mr. Fahey)

The purpose of this Bill is to continue the existing scheme of rates relief on agricultural land with certain modifications for 1980 and the two subsequent years. Rates reliefs on agricultural land have been provided by way of agricultural grant under a series of temporary Acts, the latest of which—the 1978 Act—expired at the end of 1979. This Bill is necessary to provide the statutory basis for the reliefs in the present year and in 1981 and 1982.

Under the Bill the rated occupiers of land holdings with a valuation of £20 or less will continue to be in effect fully derated. For rated occupiers with land valuations between £20 and £33, no rates will be payable on the first £20 of such valuation. Rated occupiers with valuations of £33, and over but less than £40, will be required to pay only two-tenths of the rates on the first £20 valuation and seven-tenths of the rates on the valuation over £20. The cost of the reliefs, which are recouped to local authorities from the Exchequer through the agricultural grant, will amount to an estimated £37.725 millions in 1980.

The change from the reliefs which applied in 1979 is that the ceiling on the valuation of holdings to which the reliefs apply is fixed at £40 in the Bill instead of being linked to whatever valuation threshold might apply to whole time farmers for income tax purposes on 1 January of each year.

The Bill sets out the basis on which the valuation of separate holdings in the occupation of the same person is to be aggregated for the purpose of determining whether the aggregated valuation is within the £40 upper limit. This provision which is contained in subsection (2) of section 1 replaces a corresponding provision in the 1978 Act. It indicates more precisely than the earlier provision how valuation aggregation is to apply. The 1978 Act also provided for the waiving by ministerial order of national aggregation in relation to any year. Such orders were made in respect of 1978 and 1979 mainly because of administrative difficulties in implementing the aggregation provisions. The need for such waivers no longer exists and the relevant subsections of the 1978 Act are accordingly being repealed by section 5 of the Bill.

Sections 2, 3 and 4 contain a number of purely technical amendments designed to remove doubts and facilitate the application of the agricultural grant reliefs under the Rates on Agricultural Land (Relief) Act, 1976, to land removed from county health districts and added to county borough, boroughs or urban districts by boundary extensions.

I commend this short Bill to the House.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): The net effect of this Bill is to abolish rates relief on agricultural land having a valuation between £60 and £40. This is the major effect of the Bill, although the Minister reverses the position and says it is a Bill to enable the continuation of agricultural relief grants. It is no such thing.

For as long as anybody in this House can remember relief was granted by the Exchequer in respect of rates on agricultural land. In 1978 this Government abolished for the first time that relief in respect of holdings with a poor law valuation of £75 or over. In 1979 that withdrawal of relief in respect of rates on agricultural land was extended by taking away relief on all holdings with a valuation of £60 or over. By their first Bill the Government in 1978 saved the sum of £7 million and in 1979 they saved a further £2 million, a total of approximately £9 million per year.

This year they propose to take away relief in respect of rates on agricultural land on all holdings with a valuation between £60 and £40 and perhaps the Minister will tell us how much money will be saved this year as a result of that operation. Regarding farmers with valuations between £40 and £60 the following will be the effect: based on a rate of £12.35 in the £ a farmer with a valuation of £40 will have his rates increased this year as a result of this Bill to the extent of £271.60 and the farmer with a poor law valuation of £60, based on a rate of £12.35 in the £, will have his rates increased to the extent of £345.60. That is a summary of how this Bill will affect the agricultural community.

In plain language, this Bill represents another chapter in the move away from the Fianna Fáil manifesto published in 1977 in that it represents a transfer of the rates on private dwellings to the agricultural sector. Under the heading "Local Government" the manifesto states that rates will be abolished from January 1978 on all private houses and local authority houses will have the rate element eliminated in the rent, as will tenants of privately rented accommodation. Rates will also be abolished on the residential portion of business premises, all secondary schools, bona fide community halls and farm outbuildings.

Immediately this precious document saw the light of day a great number of people said that the rates would be shifted from the private house sector to the agricultural sector and to the industrial and commercial sector. No sooner was that argument put forward than the then leader of Fianna Fáil, Deputy Lynch, was sent out to give a solemn assurance that this would not happen. Just as he undertook that petrol would not be taxed in lieu of a tax on motor cars, he gave a solemn assurance that the rates taken off private houses would not be shifted to the industrial and commercial or the agricultural sectors. No sooner had they got into office on foot of this manifesto than they proceeded to do the thing which they had undertaken not to do. What is this Bill other than a transfer of rates from private houses to agricultural land? The Government saved £7 million in 1978 and a further £2 million the following year, making a total of £9 million, which represents a substantial portion of the rates removed from private houses.

Rates were attacked and condemned by all sections of the community on the basis that they represented a form of taxation which did not have regard to the income of the ratepayer and his capacity to pay. On that basis a good argument could be, and was, made against rates. What do we find now? We find rates being perpetuated, being continued in a more aggressive form than previously because here farmers with valuations from £40 to £60 are being called upon to bear the full brunt of the rates. It is a wonder that the Minister did not say, in his opening statement, as the Minister for the Environment did on the last occasion, that these rates can be deducted from income tax for which the ratepayer may be liable. He would not have the neck to say that on this occasion. When he was dealing, on the first occasion, with valuations from the maximum down to £75 and on the second occasion from £75 down to £60, he made that statement but here he is dealing with valuations from £40 up to £60.

The Minister, who represents a rural constituency and who, is, I think, a farmer—certainly he has farming experience—must know that the great bulk of farmers who fall within the category of valuations covered by this Bill will not be liable for income tax. Their incomes will not be sufficiently high, with a £40 valuation, to attract imcome tax. Many of them, being married people with families, will have allowances sufficient to wipe out any income tax that may be assessed upon them.

This is simply a transfer of rates from private houses to agricultural holdings. It can be nothing else. It is a shameful and disgraceful reneging by the Government on their promise to de-rate private houses, and the promise given on every Fianna Fáil platform in the country and by the man who was then being held out as their leader, whose word could be accepted and trusted, that there would be no shift from one category to another. The Government seem to be hell bent on taxing farmers without regard to the size of their income. We have reached the stage now when farmers say that they are agreeable to pay income tax the same as anybody else, provided the same rules are applied to them, provided they get the same allowances for capital investment as their brothers in industry and commerce.

Since this Government came to power they have introduced for the farming communities one system of taxation after another, none of which had regard to the capacity of the farmer to pay. They introduced the notorious 2 per cent levy which split this country and sectionalised it, drove townsman against countryman. This levy was clamped down on agricultural takings—that is the best way that I can put it—irrespective of whether there was a profit or a loss. In addition, in 1978, the Government increased by 33? per cent, and much more in some cases, the rates that were paid, again without regard to the capacity of the farmer to pay. They repeated that dose in 1979 in respect of another category of farmers with valuations between £75 and £60. This year they thought up another one which had not been thought of before—the resource tax, which is another additional form of rates.

If the Government believe that the local authorities or the rating authorities are not doing a good enough job in taxing farmers without regard to their capacity to pay through the rating system, in addition to what the local authorities are obliged to take from the farmers, the Government come along this year with what they are pleased to call the resource tax, a tax of £3.50 in the £ on all farmers with a valuation of £70 or over, on top of the rates and certainly on top of income tax and levies. The principle there is very wrong. That is another system of taxation which has no regard whatever to the capacity of the farmer to pay. Hell has broken loose in the Fianna Fáil Party over this resource tax. Indeed, I should like to be a fly on the wall at the Fianna Fáil Party's meetings this weather, and particularly those which are to be held this week. I know for a fact that from a former Minister for Agriculture, Deputy Gibbons, in the higher farmer bracket, down to Deputy Callanan, representing the west of Ireland, they are dead against this form of taxation, so much so that the present Taoiseach is driven, just a Deputy Jack Lynch was driven in 1977, to say that there would be no transfer from the private house sector to the agricultural sector, to say that the resource tax is a temporary measure, that it is not going to be permanent. The records show that income tax, which was introduced about the time of the First World War and amounted to only a few pence in the £, was introduced as a temporary wartime measure which would disappear when the battles were over and the war was won.

Mr. Quinn

We have had continuous war since then.

Mr. T.J. Fitzpatrick

(Cavan-Monaghn): There are wars now, as Deputy Quinn says. Wars came and went but the war has gone on between the taxpayer and the inspector of taxes year after year, year in year out. There is no doubt about it, this resource tax will continue and can very easily be increased in amount and extended in operation downwards as regards valuations.

This Bill proposes to fix the relief in respect of rates on agricultural land for 1980, 1981 and 1982. Fianna Fáil are nothing if not optimists. They are doing everything in an effort to win the next general election. It is obvious there will be another Bill and the figure of £40 in respect of relief of rates on agricultural land will be reduced to £20. Instead of introducing a Bill to extend rates on agricultural land they should abolish such rates, just as they should abolish the resource tax on agricultural land. They should tax people on their capacity to pay instead of extending the rates system. It is accepted that the rates are not a fair system of taxation. They should be abolished completely. In Northern Ireland, and I presume in England, rates on agricultural land were abolished many years ago and farmers are taxed on income.

I realise the Government are in a financial mess but it is their own fault. It did not just happen suddenly. They are paying for the promises they made in the manifesto. This Bill is a step away from what they promised in the manifesto. Fianna Fáil gave grants of £1,000 in respect of new houses but now grants are not available to instal toilets, to obtain water supply, to repair roofs or to add additional accommodation to houses.

An Ceann Comhairle

The House is dealing with an agricultural Bill.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): It is part of a package.

Mr. Fahey

I thought it was the budget debate. I was wondering what I was doing here.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): It is all part of a package. It is very difficult to avoid mentioning such matters.

An Ceann Comhairle

The Chair must insist that the House deals with the Bill.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): I do not envy the Chair the job. Obviously people get somewhat mixed up when they see a measure like this before the House and realise it is part and parcel of the now infamous package. This Bill is being introduced at a time that is very bad for the farming community. Whatever about any other time, certainly there should be no effort made now to introduce a measure providing for taxation without regard to income or earning capacity. All sectors of the farming community are going through a very lean time. This morning on radio I heard a farming report which stated that if the state of the agricultural community is to be judged by purchases of agricultural machinery and appliances as well as household appliances, this is a very bad year because such purchases have fallen dramatically. Farmers are not spending money because they are not making it. Yet the Minister has been sent here by the Department of Finance—that is where the orders are coming from—to apply this form of taxation. It is an increase in taxation of between £271 and £345 on agricultural holdings regardless of the capacity of the people concerned to pay. It is being done when it is generally accepted that the incomes of farmers are declining rather than increasing.

Fianna Fáil think that certain sections of the farming community will continue to stand by them. That remains to be seen. There is no doubt that this Bill is a shameful reneging on the promises made to the farmers before the last election. I appeal to rural Deputies in Fianna Fáil to stand up and fight. Deputy Gibbons said he fought last year. He is on record as having said that the resource tax is an unjust and unfair tax and that he successfully fought it last year. I appeal to the other Deputies representing agricultural areas to fight for justice and fight against discrimination because what we want is a system of taxation that will have regard to the capacity of the taxpayers to pay.

Could the Minister tell us when this agricultural grant was first introduced? I think I would not be far wrong in saying that nobody here would remember when. If the Minister has the information he might tell me now but he need not do so if he does not wish to: what figure will be saved in respect of the drop in the grant this year from £60 to £40? In my opinion, it must be much more than the saving in previous years because there is a far bigger band, a far greater number of holdings involved than was the case in previous operations. In my county of Cavan I think there are only about 100 holdings over £100 valuation but I am sure there are several hundred over £40, although it is a county of small valuations.

We shall have another session on Committee Stage and probably on Report Stage. One could continue to talk at considerable length on this matter but it all boils down to spelling out as clearly as possible that this Bill is not a Bill to grant relief in respect of rates on agricultural land. Of course that can be said, but everybody knows that it is a Bill to take away relief in respect of rates on agricultural land, that it is a Bill to impose further taxation without regard to the capacity of the farmer to pay, further taxation on top of the infamous 2 per cent levy and all the other levies, on top of the resource tax of £3.50 which we are told is a temporary measure. It is a Bill to do all this at a time when agricultural incomes are dropping and when the vast majority of those affected—certainly if they are married—will not be liable for income tax and will not be able to take credit for rates against income tax. They are being called upon by the Minister and obliged to pay this additional tax, varying from £271 for a £40 valuation to £345 for a £60 valuation based on a rate of £12.35 in the £. They will be asked to pay that additional taxation entirely disregarding their capacity to pay, whether they are making or losing money. They are being asked to do this to make up for the manifesto present given by the Government to owners of private houses some of whom are in the millionaire class and some having very large incomes. The agricultural community are being called on to make up for the relief granted in respect of mansions all over the country.

Mr. Quinn

In a way it is an anachronism that this Bill is before the House in its present form and that the Minister of State, Deputy Fahey, is here carrying the can in effect for a Cabinet decision in relation to the budget on which we must vote tomorrow at 7 p.m., I understand, because the Minister is asking us in effect because of the historical nature of the Department of Local Government—now the Department of the Environment—to give effect to a financial measure which fits into the Government's overall financial programme.

One effect of the Bill will be to increase the amount of revenue that local authorities with large agricultural sections within their administrative area will get directly from the rates, because the Bill lowers the threshold of those required to pay rates now and those who will be forfeiting the relief and to whom Deputy Fitzpatrick referred. While it is quite clear that one could have a budget debate on this measure, within the context of local government finance generally, we had the announcement in today's newspapers that 200 workers will have to lose their jobs because of a shortage of funds in one sector of the Minister's area of responsibility. Here we have the announcement that people who previously had been exempt from rates will now have to pay them because the Minister for Finance is seeking to extract funds from the agricultural community and is not prepared to do it openly by means of a direct tax on farmers. This is because of the way in which the Fianna Fáil party in opposition—and Deputy Gibbons was no saint in this respect—went out and pledged themselves prior to the last election that they would not tax the farmers, that the small measures introduced by the previous Government would be vigorously resisted by Fianna Fáil if they were returned to office.

Fianna Fáil bought their way back into office through the ballot box and through a manifesto of which they are not now prepared to give out copies—if we believe what we are told in the newspapers. What the Minister of State is now being asked to do is to tax farmers through the back door. This is one of the ways in which it is being done. If Fianna Fáil were in favour of abolishing rates in toto on residential houses, on the basis that it was an inequitable tax, they should be in favour of abolishing rates altogether on agricultural land on the same principle. Instead they are increasing the take from the agricultural community, on the basis of its land-holding, by means of a system of rateable valuations which everybody agrees is hopelessly out of date. The basis of that valuation no longer bears any accurate relation to the potential or even resource value of any of the holdings. So, not for the first time, we have a Fianna Fáil Government contradicting themselves in regard to their financial policy generally.

As the Minister correctly said, this is a short piece of enabling legislation and the principle involved is quite clear: we are reducing the level of rates relief, going against a tradition going back to the thirties and twenties when smallholders in particular were exempted from this tax because of inability to pay. That was the historical basis for it. Given the nature of accountancy system at the time and of communications within the country then, it was the only effective way in which relief of this kind, which was necessary, could be given to this substantial section of the community. But this is 1980, not 1925. Many if not all smallholders affected by this measure are members of co-ops or deal with co-ops and co-operatives are adequately equipped to enable any Department of Agriculture, acting in conjunction with the Revenue Commissioners and the Department of Finance, to begin to move towards a system of personal income tax for the farming community which would be based on their ability to pay.

Regrettably there are two contradictory streams running through this Bill. One could argue that the reduction in relief of rates is an equitable measure, because many people with a holding whose valuation is up to £40 are in theory well capable of paying income tax and rates. Many small businesses could be equated, in terms of volume and turnover, with a farm holding of £40 valuation and should therefore be treated in a similar fashion. To that extent there is no reason or justification for granting rates relief on that basis. It could be argued that there are people who will still retain the benefit of rates relief under this Act but who if they were on a proper accounts system and were running their agricultural business in a business-like fashion as far as accounts and the Revenue Commissioners are concerned would be capable of paying rates in addition to all the other taxes which would be payable by them. But we have not got that kind of system yet, and the Minister in his opening speech made no suggestion that the Government were attempting to move towards it.

The Minister made no reference to the possibility that in time the nonsense of a Minister for the Environment coming in here on agricultural rates relief Bills would disappear and that the whole basis of taxation for the agricultural community would be put on a sound footing that would take into account, having regard to the technology of 1980, the revenue that each farmer receives and his or her ability to pay, after due allowance has been made for depreciation and other allowances which all agricultural enterprises would be entitled to on a comparable basis to that of a small trader or manufacturer. There is no reference to any of that and to that extent the Minister and the Government have lost an opportunity to reassure sections of the farming community who can reasonably infer that with a drop of from £75 to £60 in the first year of Fianna Fáil Government and a drop of from £60 to £40 now in this year it is reasonable to assume that that downward trend will continue so that people with valuations of £30 and £25 can now expect to have a rates bill slapped on them next year.

Agricultural production is subject to price variation in a way that even manufacturing industry is not. It is essential if we are to attempt to move towards a planned economy that those sections of the economy over which we have some degree of control are set out and signalled with a certain degree of clarity that will enable people to plan. We cannot expect the agricultural community or the manufacturing community to try to make decisions about investment, about opting for one form of production as against another and evaluate the potential returns from those investments if they are not given some indication in advance over a period of two to three years of the likely balance of tax that would be due on the holdings they possess.

The short Bill to which the Minister referred was matched by the shortness of his opening remarks. While I appreciate that the Minister is not the Minister of State at the Department of Agriculture or at the Department of Finance because he is doing the work of the Minister for Finance in implementing, ahead of the budget vote, the Second Stage of this Bill it behoves him to indicate the Government thinking in this area and how for long this kind of measure will come before the House. The Committee Stage will enable us to get into some of the mechanics of the Bill but in fact the Bill is, largely speaking, a straightforward enabling measure. Taken with the previous and most recent Act which was passed it is clear that it is simply enabling the Minister for Finance to pay less money to the Department of the Environment because more money will be coming to local authorities.

By definition those local authorities who will now potentially be in receipt of extra money because of the lowering of the threshold of rates relief will, largely speaking, be local authorities of counties where there is a static or declining population or a population which is not growing in urban terms. Counties which are not experiencing a growth in their overall populations or a growth in the demand for different kinds of local authority services will, on the basis of this Bill, be in receipt of extra finance because the tax base upon which they are operating will be enlarged. The valuation base for the agricultural holdings which will now be liable to rates will be dropped from £60 to £40 if my understanding of the Bill is correct. The Minister for the Environment, each year since the abolition of domestic rates, set a national figure for increases in the actual rate for every local authority. Local authorities can only increase by 10 per cent generally. If that figure is taken on a national basis, it will compound the distortions that already exist in local authorities where some local authorities can survive within the guidelines set by the Minister because of the nature of their tax base and because of the nature of the demand for services within their area. Predominantly rural local authorities with a smaller demand for services than growing urban areas, because of the backdoor method of taxing farmers will have increased revenue. This proposal will enable the distortion of local authority finance to continue because the aggregate need for local authority finance taken nationally will appear to decrease because of this measure.

Dublin City Council cannot benefit from this measure. No ratepayer in Dublin city, the corporation's functional area, will come into the tax net as a result of this measure, but 200 Dublin city workers will lose their jobs next week because they are unable to get any additional money from the Minister for the Environment because of the way in which the finances are being run.

I am trying to illustrate the contradictions implicit in having a system of taxation for the farming community part of which comes under the umbrella of the Department of the Environment. If the Fianna Fáil Party had the political courage to tell the farming community that they would be taxed as part of the productive sector in the same way as manufacturing industry we would not be discussing this kind of nonsense and we would not be involved in compounding distortions in the local authority financing system.

I raised that second point because I believe—and I said so when the Local Government (Financial Provisions) Bill was going through this House—that the change away from the rates as they were then to the provisions which the Minister was taking upon himself at that time would have effects which would in time be compounded, with disastrous results for the autonomy of local authorities. I also feel that this measure will, ironically, begin to have an effect on people in some parts of the country who would not recognise an agricultural holding if they saw it. This is not just about taking some small farmers into the taxation net through the back door because Fianna Fáil have not got the courage to do so publicly by means of a budget or to say so locally in the various provincial, rural constituencies where Fianna Fáil Deputies went around in the last election claiming that the farmers would not be taxed. It does not just affect that sector of the community. It will distort the total amount of revenue coming directly to the Department of the Environment and will consequently affect the way in which overall funds are made available to the Minister when he comes to allocate an average percentage increase for every local rating authority throughout the country in the coming year. To that extent not only is this a bad Bill from the point of view of the agricultural community, because of the fact that it takes no account of the ability of agricultural rate holders to pay the tax, but it is a bad Bill from the point of view of the urban community as well because it further distorts the system of financial allocation in the Department of Finance and in the Department of the Environment.

This is enabling legislation. It is an anachronism that we are here discussing it at all. It is because of that anachronism that the distortions will get worse. Perhaps the Minister would be able to indicate if the Government propose to abolish the whole system of agricultural rates since they have abolished rates on residential property and since it has been argued successfully in the past that rates are an unjust tax based on an out of date valuation which does not take into account the ability of individuals to pay.

Mr. W. O'Brien

It can be said that the Government have been consistent in their approach to the farming and agricultural community. They have not lost one opportunity to extract the last penny from the farmers here. This approach may have short term advantages. It might satisfy some of the urban people who believe that the farming section are literally digging up money. It may pacify those people for some time. It might help them to forget how they are being taxed. It might also help them to forget the way they are being priced out of existence with present price increases. But it must never be forgotten that the agricultural sector plays a major role in our economy. It is not said often enough. The amount of employment that is being provided as a result of the purchasing power of the agricultural community when that section is doing well is not emphasised. When they are doing well they can buy goods such as machinery, cars and hardware and the producers of all these things gain as a result of the farming section doing well. This increase in rates is a severe blow. It is a bad joke for somebody to come in here and say that this increase can be set off against income tax because very few people affected by it pay income tax. In my own community 875 people will be affected by this reduction in the agricultural grant. Not many of those people are liable for income tax. I am convinced that it is an insult to the farming community to tell them that they can set off this increase against their income tax because it does not arise, and that is something that should be said here today.

There is another thing I want to make clear. Some public representatives are of the opinion that local authorities will derive benefits from the change. That is not so. Only the Exchequer will benefit; it is only a matter of the Exchequer not paying and the farmer paying extra. But not one penny extra will be provided for mine or any other county to halt the dangerous pattern that exists here at the moment. I would be prepared to accept an increase if I thought that the roads would be made passable for the people who are paying very dearly. But as things stand the Government are just trying to get any extra money they can in the hope of getting some kind of a nest egg together at a later stage so that they can have a good year before an election. That is the only way we can look at it. That is accepted by the vast majority of people around the country. But how can one expect the ordinary farmer to forget what he was told two years ago by the Government. Members of Fianna Fáil went around at that stage and met the farmers. They represented themselves as a kind of social conscience of the nation, the advocates of the farmers, the people who had a deep interest in agriculture. They spoke about our entering the EEC, about how important it was that the farmer would develop. Many a farmer is now sorry. They were led astray. The people who were canvassing then convinced the farmers that they must be protected from a socialist Government who would continue income tax and take the last penny from them. I wonder how the people who said all that are going to go to the country and say to the people that it did not work out as they thought, that they probably told a lie, that they are sorry that they could not do better. The people are not going to accept that.

I have a few interesting figures which I compiled. In my own county in 1977 the rate account was £2,739,688 and the agricultural grant in that year was £1,943,586, at 24.11 per cent. In 1980 the rates paid by ratepayers will amount to £4,117,400 or 31.9 per cent while the agricultural grant this year will amount to £1,330,000 or 10.4 per cent. That is a reduction of almost 14 per cent since 1977. Yet, we are being told that this is a relief Bill. Any person over £40 valuation will not derive one penny in benefit. When similar Bills were introduced in the last three years we were told that they were relief Bills. How can one explain to a constituent who has a valuation of £40 that this is a relief Bill when he will be faced with a demand of £494 for rates? A person with a £50 valuation must now pay £617 compared with £310.

It is time the Department came clean and told the people that they do not have any money. The people should be told that because the Government cannot go back on their word in relation to domestic rates they must take advantage of the farming community and take all they can from them. There would be some excuse for increasing rates if farmers were getting a proper service. The people who are being fleeced by the Government are those who were led astray for many years. Agricultural instructors advised them to develop and bank managers called them in to encourage them to borrow. Those people borrowed large sums of money but now they are contacting public representatives in an effort to have grants which are overdue for up to two years paid to them. Sums of between £2,000 and £10,000 are involved and those people can present four or five letters from bank managers seeking repayment of loans.

We must tell those people that nothing can be done for them at present. There is no incentive for any section of the community to develop. How can our agricultural instructors encourage farmers to borrow for development purposes? If that suggestion is made farmers will either release an alsatian or go for a shotgun.

I hope the Government will take note of what is happening in the Department. I am anxious to place on record my disapproval of Government policies. They are guilty of the greatest con-job ever perpetrated on Irish people or introduced in an Irish Parliament. Before the Government pursue such policies they should consider resigning because otherwise they will do untold damage to the agricultural sector. I hope the Minister, when replying, will be able to accuse me of telling lies in relation to what I said about the repayments from Agriculture House but if he attempts to do so I will present him with a list of names and give details of when the applications were approved and sent from Limerick.

An Leas-Cheann Comhairle

We are not dealing with grants in this Bill. The Minister will not be entitled to reply to any question relating to grants.

Mr. W. O'Brien

What I have stated is relevant because it deals with the way our people are being fleeced by the Government. We were doing well until the Leas-Ceann Comhairle took the Chair.

An Leas-Ceann Comhairle

The Deputy must be relevant.

Mr. W. O'Brien

I am sure democracy will prevail and that the Government backbenchers will not support this measure.

Mr. L'Estrange

This Bill refers to relief but that is a misnomer. It should be called a crucifixion Bill because it will crucify many small farmers, the backbone of the country and people whom Fianna Fáil have always claimed to represent. They misrepresented those people more often than they represented them. The Bill also flies in the face of the statements made by the Minister for Finance when he introduced his budget. The Minister told us that one of his objectives was to introduce greater equity in the taxation system. Where is there equity in crucifying small farmers with a PLV of £40? Where is there equity in a system where a single farmer with a PLV of £39.99 gets full rates relief while a small farmer with a PLV of £40.01 and 16 or 21 children does not get any relief? There is no equity there. The Minister for Finance told us that he was anxious to protect and improve the position of those on low incomes. Surely a farmer with a PLV of £40 is on a low income. Last year it was estimated that the family income of a farmer with a PLV of £40 was £3,000. That is less than the income of roadworkers or county council workers. This Bill seeks to pounce on such unfortunate people. The Minister for Finance also told us that he hoped to reduce Government borrowing while at the same time protect the source of economic growth. Surely he is aware that small farmers have been in the front line of every war here, national, social and economic. In the last war they saved our people from starvation. They went out and worked without tractors to feed the people, They got little thanks from the Government. The dead hand of Fianna Fáil is descending on the farmers since they took office in 1977. It is not a coincidence that farmers got no increase in prices since 1977. When we left office we had an inflation rate of 9 per cent and a growth rate of 6½ per cent, the highest in Europe. Today inflation has more than doubled at 20 per cent and the growth rate is zero.

We cannot expect the Government to do much for farmers because they are the Government who jailed them when they marched peacefully to demand their rights and a fair income for themselves and their families. Rates are an unfair, unjust and iniquitous form of taxation that does not take into consideration the ability of the farmer to pay. Millionaires with castles and islands or people with 12 houses let in Dublin city do not have to pay any rates. I am old enough to remember President de Valera promising to derate all agricultural land. He promised that when the rates were 3s 6d in the £. The average rate today is about £13 in the £. That is how Fianna Fáil kept their promise to the farmers. We know that the Government need money and must get it from somewhere. I do not see why they should try to get it from the hardest worked and worst paid section of the community. Farmers between £40 and £60 poor law valuations come under that description.

The Government are in a mess and it is one of their own making. The Taoiseach is trying to distance himself from everything that happened in the past two years, and it is our duty to make sure that he does not. If the Government cannot subsidise small farmers it is because they squandered the ratepayers and taxpayers money for the past two years. They issued a manifesto and people were never to have it so good. They gave the impression that everything was up for grabs and all one had to do was go out and get it. They abolished wealth tax for the well off. The same Government who did that now expect that a small farmer in the £40 poor law valuation bracket will pay anything from £250 a year to £450 a year depending on the county he is in.

The Government seem to have a mania in regard to subsidies. They reduced food subsidies—lime subsidies, cheese subsidies and various other subsidies. We should not be so surprised that they have reduced the subsidy on rates. We introduced income tax because, under Deputy Clinton, farmers' incomes had increased from £350 million to over £900 million. The PAYE payers were carrying too large a burden. We believe in justice and equity and that all sections of the community should pay their fair share of taxation. The majority of farmers, irrespective of what Gay Byrne or others may say, are ready, willing and at all times want to pay their share. We had taxation for farmers with £100 poor law valuation and also the notional system. I remember the speeches made by Fianna Fáil at that time which criticised us and said that farmers would not be in a position to pay. I know what happened in my county in the last election. They went around in the dead of night and told the people that if they were returned to power they would do away with income tax. Unfortunately they were believed and now, what has happened? They did not at any time tell the small farmer with £40 poor law valuation, whose income last year was around £50 per week, that he would be mulcted by them and that the subsidy on his rates would be taken away.

We know that this is the worst possible year to expect farmers to pay any increases in taxation. Their overheads have increased from 25 per cent to 30 per cent. The price of fertilisers increased by almost 40 per cent while the price of cattle has remained stable. The small farmer in tillage is being asked to pay £250 extra in rates while the millers have already said they will pay from £12 to £15 per ton less for his barley. Is that equity? Is that treating all the children of the nation equally? If it is, words have lost their meaning.

This taxation is unfair and unjust because it does not take into consideration the ability of the farmer to pay. I will give some figures from my own county. If this subsidy was still being paid the rate for a farmer with a poor law valuation of £60 this year would be £304.96, but he is losing a subsidy of £266.84. His rates are increased by that amount and he is paying £571.80. This Bill is called the Rates on Agricultural Land (Relief) Bill. Have words really lost their meaning? I should like to bring the Oxford Dictionary into the House, as another man did on another occasion, and see what the meaning of the word "relief" is. Does the Minister call a Bill that increases a man's rates and payments by £266.84 relief?

Debate adjourned.