(Cavan-Monaghan): When I reported progress I was pointing out that I disagreed very violently with the proposed resource tax. This tax seems to be contrary to the explicit intention in the budget which stated that the Minister proposed through the budget to introduce greater equity into the taxation system. This resource tax does exactly the opposite. It is based on an inaccurate and discriminating yardstick, the poor law valuation system. I do not have to argue that that system is unfair, out of date, and discriminatory as between one holding and another.
As an example I pointed out that County Monaghan is one of the most heavily valued counties notwithstanding that in modern times and for all State benefits it is included in the 12 western counties which are regarded as underprivileged counties. County Monaghan is valued more or less as equal to County Kildare. I hardly need say more. A 70-acre farm in County Monaghan has £100 valuation while a 70-acre farm in County Kildare has £95 valuation. It is unbelievable that any comparison could be made between the two counties.
This resource tax seeks to consolidate this unfair and inequitable system of rates by removing the agricultural relief grant and thereby increasing rates from £200 to £500 on a poor law valuation of £40 and at the same time introducing this resource tax, which is another form of rating. In my opinion this resource tax is a direct repudiation by Fianna Fáil of their solemn promise given through Deputy Lynch, the former Taoiseach, not to transfer rates removed from private houses to land or business premises. When the manifesto was published and when the promise was seen to be made by Fianna Fáil to deal with private houses, the Opposition and others said: "If they do that, they will transfer the rates foregone in this way to business premises or to land." Deputy Jack Lynch, then leader of Fianna Fáil, gave a solemn assurance that there would be no such transfer of rates. What is this other than a transfer of rates from private housing to land? In addition to abolishing the agricultural relief grant in three stages since they came to power down to £40 valuation, thereby saving the State £17 million, they now introduce what I call a two-tier rating system by imposing a rate of £3.50 per £ on valuations of £70 or over.
This resource tax has no regard to the capacity of a person to pay. I know and the Minister knows a farmer in County Monaghan with a valuation of £81 who has a very large family and who last year was in such poor circumstances that he had to be paid a disabled person's allowance by the North Eastern Health Board. That same farmer will now be called on to pay a resource tax this year of £280. Deputy Leonard also knows about this because the Minister wrote to Deputy Leonard saying that it was a hardship case but he could not do anything about it. That is the one hardship case that we may be able to point to in such clear terms but it is an example of the inequity and injustice of this tax. Of all years that the Minister might choose to impose a resource tax on farmers, an additional tax, surely this is not the year, because farmers' incomes this year, according to all the reports and studies that have been made, will be well down, down by at least 10 per cent. I am sure they will be down by more than that.
Time does not permit me to develop all these points, but another point is that this resource tax is a direct discouragement to agricultural production because if the farmer has to pay hundreds of pounds on top of additional rates he will have less money for artificial manure, for lime and for stock, and never in our history was an increase in agricultural production more necessary. Looking at the most recent report available, that of the Central Bank, we see that the most alarming aspect of our economy at present is our balance of payments. This year it will be over £700 million again. What will this tax do for our balance of payments? It will depress agriculture, reduce agricultural production, reduce agricultural exports and exacerbate the disastrous state of our balance of payments.
This is a reckless performance. The Minister has told us that the reason he is introducing this crazy system of taxation is to put an end to avoidance of taxation. He apparently looked back and saw that last year or the year before some farmers did not pay as much as they should have, but he has the income tax machinery to deal with that. He is simply saying that, regardless of income and regardless of their capacity to pay, farmers will have to pay £3.50 per each £1 poor law valuation.
We all know that evasion of tax goes on all over the country but I have not seen any Minister come in here with a proposal to put a flat rate of tax on professional men because it was thought some of them evade taxation. I have not seen any proposal from the Minister to put a flat rate resource tax on business people because some of them do not pay all the tax they should pay. Why has the Minister picked out the farming community this year in direct denial of the promise made to them by the former Taoiseach that this sort of tax would not be paid?
Several Ministers have said that farmers are prepared to pay the same tax as everybody else and the Minister for Finance tells us that this is what he is doing with this resource tax. The resource tax is a unique tax, a rate upon a rate, a method of taxation which has not been applied to anybody else. There are 82 Deputies in the Fianna Fáil Party who could come in here to give their views on this tax but I have not heard any of them coming in here to defend this tax.