Finance Bill, 1982: Committee Stage (Resumed).

Question again proposed: "That section 6 stand part of the Bill."

This section is concerned with the introduction of a concession in respect of income tax costing £45 million for people who are paying pay-related social insurance contributions. If £45 million is available, I consider this is the worst and most inequitable way of using it to aid people who have problems paying their pay-related social insurance contributions.

Before I deal with that issue I should like to condemn in the strongest possible terms the fact that the Government have failed consistently, despite repeated requests from this side of the House, to say how they will raise the £45 million. Throughout this debate they have criticised us for putting forward amendments, some of which would cost as little as £4 million — one-tenth of the amount involved in this concession. They have criticised us for irresponsibility in doing our duty as an Opposition and putting forward amendments of this kind. Yet, although they announced this concession well before the Dublin West by-election they have not yet told us how they will raise the money and I predict they will not tell us how they will raise it until after the Galway East by-election.

The Government are engaged in a campaign of concealment in regard to their true intentions in the matter of cuts in public services and increases in taxation. They will deliberately withhold from the people information that should be made available to them in regard to how the £45 million will be raised. I fear they will not make the announcement until this Dáil is safely in recess, thus depriving Members on this side of the House and perhaps some on the other side of the opportunity to express their views on whatever measures the Government enact.

In so far as expenditure cuts are to be made, I believe these will be made after the Estimates for Public Services have been passed and sanctioned by this House. In other words, the Government will seek to reverse the decision of this House in regard to Estimates for Public Services by cutting back on levels of expenditure that have been agreed by this House. If that should take place I believe it would be unconstitutional behaviour. If the Government intend to modify any expenditure programme contained in any Estimates this House will pass, they should announce at the time when the expenditure is being considered precisely what reductions they have in mind. If they allow the House to go ahead and pass Estimates, as it will do on Friday and as it has done on a number of days up to now, without telling the House that they intend to cut back on the public services as sanctioned in those Estimates, in my view they will be behaving against the spirit of the Constitution in not giving a true disclosure to the House of their intentions and, in fact, intending to frustrate the decision of the House in regard to Estimates.

In the event that they decide to raise some of the money other than by cuts in expenditure but rather by increases in taxation, I fear they may do so by means of the mechanism of an imposition of duties order. As we know, it is possible for the Government, without the Dáil meeting and without any resolution being introduced here, to introduce increases in taxation by means of such an order. Obviously if the Dáil were in session there would be an immediate opportunity for the Opposition to express a view, contrary or in favour of whatever increases in taxation were proposed by the Government. However, I fear the Government will wait until the Dáil is in recess to announce how they will raise this £45 million and that they will do so by means of expenditure cuts, which would be in defiance of the Estimates passed by the House, or, alternatively, by increases in taxation which will be introduced by means of imposition of duties orders, fiats announced by the Government which this House will have no opportunity of debating until perhaps three or four months after they come into effect, when the Dáil eventually meets again in October. I believe that is the Government's intention in regard to raising the £45 million and it is a most unworthy procedure. The Government must in this House today, be flushed out into the open as to how they propose to raise this £45 million. They will say, of course, that they are looking forward to the results of reviews of expenditure and staffing, one of which was initiated by me. I will come to that in a moment. Both of these reviews are available to the Government and both have been presented to the Minister for Finance. He has the material to make the decisions now but I fear he will not make decisions until after the by-election in Galway East and until this House has gone into recess.

The Minister referred to an inquiry into staffing in various Departments and he conceded that it was I, not he, who initiated this inquiry. It was my intention that this would be used as a long-term means of reducing staff costs and that the procedure in regard to an embargo on new posts in the public service and the decision of the Government to fill only one in three vacancies——

The Deputy should confine himself to what is in the section

This relates specifically to how this is going to be paid for and in referring to staffing survey I am referring to a statement made by the Minister who said that this was one of the ways whereby he would raise the £45 million. When I initiated this inquiry it was my intention that, in the event, the results of that survey would be used as a means of saving staff in a long-term way, so as not to necessitate the continuance indefinitely of the procedure which, we all agree, is crude and difficult to administer, of failing to fill two in three vacancies as they arise. If the Minister is going to use whatever resources are suggested to be saved by means of this staffing review for another purpose, namely, to cover the £45 million, he is departing from my intentions in this matter which were that it should be used, when available, to enable a relaxation to be made in regard to the non-filling of vacancies. If the Minister is going to use it to raise the £45 million necessary for the implementation of this section, it behoves him to state his intentions in regard to the non-filling of all but one in three vacancies in the public sector. Clearly, if he is using it for this purpose he is going to have to continue this embargo on the filling of vacancies in the public sector to raise the money that he is now using for another purpose. If he uses one penny of the money made available by the staffing reviews to raise the £45 million, it will be he who is continuing the embargo on filling vacancies in the public sector. He will no longer be able to blame the Government of which I was a member for the fact that vacancies, many of them important, for carrying out skilled tasks, cannot be filled. It will have been his deliberate decision to use the money available from the reviews that were supposed to release resources to stop the operation of this system of non-filling of vacancies for another purpose, and thereby require, through his decision, not mine, the continuance of this non-filling of vacancies.

There are many reasons, not just financial, but relating to staffing policy in the public sector which necessitate that the Minister come clean on where he is going to get the £45 million. He must come clean before the Galway by-election and before the Dáil goes into recess. Otherwise, he will be deliberately depriving this House of the opportunity of passing its verdict as a democratic Assembly on whatever decisions the Government take in our name.

I welcome this section which gives some relief to people who have carried the burden of taxation over the years. They have also borne the brunt of PRSI increases which, it must be said, were not in the budget proposals but were contained in the Social Welfare Bill, 1982. The decision to spend £45 million to give relief to employees who pay the higher rate of PRSI contributions is very welcome. Deputy Bruton has been asking for reliefs in taxation. It is surprising, therefore, to hear him continually asking today where the money is coming from. Deputy Bruton did not say he welcomed the granting of tax relief and if he were Minister for Finance I am sure he would not have granted that and he would also have increased the PRSI contributions to the 7.5 per cent. PRSI is not a social insurance scheme, it is clearly just another form of taxation and there has been very strong reaction from people who have to pay this very high rate. It is unjust, inequitable and unfair and bears heaviest on the working class, especially in the private sector. In the 1982-83 rates of PRSI, 7.5 per cent was added to wages and salaries in the private working class. Only 2.9 per cent was added to the wages and salaries of public sector workers. There was 2 per cent added to the profits of self-employed and farmers. Investments, dividend incomes and capital gains income from land rezoning are zero-rated. Company cars were also exempt. Thus, while the public sector workers pay half what the private sector workers pay, the farmers and the self-employed in practice pay only one-third of what the supposedly cossetted public sector workers pay. That is a situation that must end. The PRSI contributions must be spread to the private sector and the farming community because they are getting benefits for which even workers do not qualify. If workers paying PRSI qualified for full eligibility or health services one could say they were getting something from it, but they are getting nothing. For that reason one must welcome the spending of this £45 million.

I thank Deputy Sherlock for his welcome for this provision in the Bill which is confirming the action that was taken by me to alleviate the hardship caused by the increases in the pay-related social insurance contributions. Last evening Deputy Bruton tried to imply that the Bill had not been prepared by him. The fact is that it was, including the 1 per cent levy that was put through last December when he was still in Government. The Social Welfare Bill as prepared by Deputy Bruton when in Government was passed through this Dáil before the budget I introduced on 25 March.

Who introduced that Bill?

It was prepared by Deputy Bruton and his Government and supported by him.

Who introduced that Bill?

The new Minister, Deputy Woods.

Does the Minister agree with what Deputy Sherlock said?

The speech that we have heard from Deputy Bruton this morning would be more appropriate to the church gates somewhere in East Galway than it is to the business in hand here, bearing in mind that we have up to 100 sections in the Finance Bill. Yet Deputy Bruton proceeds to delay the passage of it for what might be described as political point-scoring.

As Deputy Sherlock said, it is hard to understand the approach of Fine Gael in their demands in relation to where the £45 million might be found, bearing in mind the various statements that I and other members of the Government have made. The totality of the amendments in the name of Fine Gael alone would cost £180 million. But there is no shouting from the roof tops by Deputy Bruton regarding the provision of that kind of money. The outburst that he has made is more appropriate to a by-election. But I have no intention of running the State finances on the basis of the pending by-election. I have said clearly on numerous occasions that the £45 million would be made good this year by expenditure savings or additional taxation. The staffing review committee which was introduced by Deputy Bruton reported to us as a new Government. In addition to that we undertook an expenditure review, the most extensive and exhaustive that has ever been undertaken, and those two reviews have been examined by the Government. The Government are not just going to make a decision because Deputy Bruton demands it or because there is a by-election pending. They are going to make decisions in the light of the information that has been obtained from these reviews. The Government will make up their minds in relation to any expenditure savings that can be effected and if further taxation is required it will be imposed. But, as I have said consistently, the £45 million will be made good.

I have no intention of getting involved in the political arguments raised by Deputy Bruton. Everybody accepted the necessity for some easement of the burden created by the increase in the PRSI contribution. With all the statements being made by Fine Gael as to where the money will come from, despite it being explained clearly what the Government intend, one must ask if they are opposing this concession. It appears that they are against it. But notwithstanding that, we spent hours yesterday debating an amendment to this section which would cost more than £45 million and that amendment was not in the name of Deputy Sherlock or of Deputy Desmond but in the name of Deputy Bruton. It is very hard to reconcile these contradictions. But that is a matter for Fine Gael and their own consciences. We have to deal with reality, and I intend to do that in relation to any decisions that I have to make.

I would like to deal with points that have been made by the Minister. First, he referred to a cost of £180 million if the Fine Gael amendments are passed. I would like to refute that statement. The position is that £170 million of the alleged costs relate to the amendments that Fine Gael have down to remove the proposals which are simply bringing forward corporation profits tax and VAT from next year to this year. They are not raising any additional revenue; they are just artificially changing the date from which revenue will be raised from January 1983 to December 1982 in order to fool the people. It will not fool the economic and financial community but it may fool the people about the true extent of the current budget deficit. That is what our amendments are concerned with. They are not items of cost. They are simply items designed to force the Government to do their bookkeeping in an honest and not a dishonest fashion.

I would like to deal with the concession here. I believe this method of using £45 million is about the worst possible way of using it because it will be of most benefit to people who are better off, people who are on a 60 per cent marginal tax rate and on high incomes. To them the tax allowance will be worth 60p in the £. To people who are so badly off that they cannot even use up their full tax allowances and pay no tax, the additional tax allowance will not be worth a single penny. To people who are moderately well off and who are not paying tax at the 60p in the £ rate but at 25p or 35p in the £ the concession will be worth only 25p or 35p in the £. In other words, this concession in regard to PRSI gives most to those who have most, and least to those who have least. I do not deny that there is room for concessions in regard to PRSI. If £45 million is available for that purpose it should be used to relieve low paid workers altogether from PRSI to the extent that that can be done with £45 million. This money should not be used, as it is being used by the Minister for Finance, to give disproportionately large benefits to people at the top end of the incomes scale. I am surprised to hear the representative of The Workers' Party, who concerns himself with the interests of low paid workers, welcoming this type of concession which will give the largest possible benefits to high paid workers and little or no benefit to low paid workers. Deputy Sherlock seems to have a remarkable capacity for inconsistency in this as in every other matter in this House.

(Interruptions.)

Furthermore, the Minister referred to the amendment that I introduced yesterday and which was very nearly passed by this House. That amendment was solely concerned with allowing people whose incomes are so low that they could not avail of the concession this year to avail of it in future years. It was not adding to the concession. It was simply allowing people on low incomes who could not get any benefit from it this year to benefit from it in subsequent years, and for the Minister to suggest that I was in some way trying to add to the concession is wrong. It is not true.

It is. I do not want to delay this debate but it is relevant and appropriate for me to point out that Deputy Bruton refers to costs of £180 million for the Fine Gael amendments and says that £170 million is for VAT on imports and bringing forward corporation profits tax payments. That is true, but that is the alternative that we as a party put before the people following the fall of Deputy Bruton's budget. If he is so concerned about those two items he must still be standing by his original proposals to raise that money by VAT on clothing and footwear and the abolition of food subsidies. This is the man who has spoken about 50 times in three weeks about the lower paid. How would they have been affected by the imposition of VAT on clothing and footwear and the abolition of food subsidies? Let the Deputy answer that question.

I defended those proposals of the January budget during the election campaign and I believe it was a just budget, under which people had the choice of adjusting their expenditure in accordance with the price of the items concerned. I do not believe that the approach of this Government is an honest one because they are simply piling up problems for next year. In our January budget we faced the issues squarely and proposed to raise money this year in the best way we could devise. It happened that the Dáil decided to reject it but I will not apologise to the Minister for Finance or anyone else for that budget. It was an honest and forthright attempt to face the problems of the country and many people will agree with this assessment when they see the zig-zag approach and the concessions which are typical of the policy of this Government.

(Dublin South-Central): I have listened for some time to Deputy Bruton and I find no sincerity in any of his arguments. Deputy Bruton framed a budget in January and if he was sincere about the concessions he is now seeking he could have included them in that budget. He claims that the January budget was a sincere effort to fix our finances but he had every opportunity to enshrine many of the proposals he now advocates. Why is he not trying to include by way of amendment the proposals contained in his January budget? I cannot see any sincerity in his amendments. If Deputy Bruton were still Minister for Finance I do not believe the concession of £312 would by included. I am surprised that any Deputy would try to create hardship for PAYE workers but that is what Deputy Bruton is doing. He would like the provision of £45 million to be deleted.

That is not what I said. I stated that I believed it should be used to help the lower paid, not the higher paid.

(Dublin South-Central): He has insinuated that it should be deleted. I am not convinced by the arguments put forward by Deputy Bruton because no Deputy could have such a change of heart in so short a time. There is no point in proposing amendments which cannot be implemented. The PRSI system needs to be examined because it weighs unfairly on the lower paid. The Minister stated last night that he would examine the question in an effort to alleviate hardship on the lower paid. This amendment certainly cannot be——

We are on the section now.

(Dublin South-Central): Deputy Bruton's amendment merits a certain amount of comment, even though we are on the section.

We discussed that last night.

(Dublin South-Central): Deputy Bruton supported other amendments which he had not the courage to propose himself at earlier stages. The Minister has stated his intention to review the PRSI system and we should not try to upset the whole balance of our finances by the insertion of any of Deputy Bruton's amendments.

We have an extremely bad precedent whereby under a section £45 million of relief is given with no indication whatsoever, many months after the budget, as to where the money will come from. People would know what the Government were talking about if the Taoiseach or the Minister for Finance said that £45 million of relief on PRSI was being given but that as a consequence petrol would by increased by 25p a gallon, or the pint of beer would be increased by 10p, or the 30 per cent VAT rate would be increased by about 7 per cent. These are the kinds of measures which would be necessary to raise £45 million this year. Such proposals have not been made and the Minister says he will save £45 million some way or another. Indirect taxation could be increased but the Minister knows how difficult it is to get financial resolutions passed by this House. The alternative is capital taxation but I do not believe that this Government in any circumstances will move in that direction. To raise £45 million in 1982 we would have to introduce a £90 million regime for the remainder of this year because six months have already passed. Anyone who would suggest that the Taoiseach or the Minister for Finance or the supporters of Fianna Fáil would countenance such a measure would be living in cloud cuckoo land. There are only three options, namely, direct taxation, capital taxation or cuts in public expenditure.

(Dublin South-Central): What about buoyancy?

I will tell the Deputy about buoyancy. When the House adjourned last night I went to a very middle range hotel and had an evening meal with my wife. Outside this 90-bedroom hotel there were two coaches, one German and one American. Had it not been for the 30 or 40 visitors and half a dozen Irish in the diningroom the hotel would have been empty.

(Dublin South-Central): The Deputy was at the wrong hotel. It was too expensive.

I can assure Deputy Fitzpatrick that whether it is excise duty or custom duty, post office receipts or any other segments of Exchequer revenue forecasting, they are all down. Post Office receipts are down by about £10 million, as we know. The buoyancy of £20 million which was supposed to exist in the budget is now gone out the door. There are no tourists in this country, for all practical purposes, for the summer of 1982. If one sees a British tourist, one almost stares. That is the reality of the buoyancy about which we are talking. We are back to indirect taxation, capital taxation or cuts in ordinary public expenditure. Any Deputy or Minister can say we should cut back in the health services but the health boards are screaming for money. They are crucified in 1982 because of a very tight financial situation.

My last point relates to cut-backs in local authority services or education services or, indeed, in the services related to agriculture. That is Deputy Bruton's fundamental objection, which I support, in relation to the £45 million. I have been belted over the head and criticised unmercifully at trade union conferences when I pointed out the reality of the situation and regarded almost as reactionary in saying if £45 million relief is to be obtained, it must be got from somewhere else. One had better find it in the context of the current budget, because next year's budget will be even worse as regards finding the money. I am quite certain that my view is shared widely by many Deputies on the Government benches and I make no apology for raising these issues here again this morning.

We will have to leave it in the Minister's hands, because we will not be back here after Friday week. It will be the longest summer recess in the history of the Dáil because I doubt if we will be back before 25 or 28 October. After that, it is a short run until Christmas and then the end of this financial year. In the interim period, since the Minister cannot pass any Financial Resolution between next Friday week and the end of October — and if he tried to do so we are in such a totally unstable situation that he would not get it through the House, although he might be surprised at who would vote for him again — in that situation, he is back to cuts in public expenditure. I do not see these coming, either. At the end of January 1983, I can see this House facing a budget which will be even more untenable than the one which is in such a tattered state this morning.

Could I ask the Minister what, in reality, is meant by subsection (3)?

Subsection (3) provides that any deduction made under the section will be given in priority to the PAYE allowance of £600. This will ensure that the allowance of £312 is given even if the emoluments are not sufficient to fully absorb the extra amount of £600 by way of PAYE allowance.

Does it make any difference which gets priority? Surely an allowance is an allowance.

It makes the difference that they are assured of getting £312.

I do not think it is worth while spending a long time arguing on it, but what is the point of ensuring that they can get this £312? If they can get £312 as part of £600, is it not just as easy that way as to give it separately and then say that they can only get £312 or the £600.

The point is that there will be other emoluments which can attract the £600 allowance but will not attract the £312 allowance. That is the information which I have received. That is why priority is given to the £312. An example is temporary employment and such like.

I do not understand that. It is rather important to understand what is involved here. I do not quite see what emoluments the £312 cannot be deducted from that the £600 can be.

Temporary employment is one example which I have given.

Could the Minister give us a little more than an example? Could he tell the House the situation?

I will see if the information is available in relation to the exact details.

It must be available.

The Deputy asked me what the subsection did and I told him that it gave priority to the £312 allowance over the £600 allowance. I will seek the information for the Deputy.

The Minister should know.

The purpose of the subsection which I have read out is that where the particular taxpayer cannot get the £600 allowance this is to ensure that he will get the £312 PRSI allowance. That is why it is given priority under this section.

What people could not get the £600 allowance that this would apply to? The £600 is available to all who are PAYE workers, as I understand the situation.

That is the information I have been given in relation to the subsection. I will get the information requested by the Deputy.

The Minister knows very well that, much as I would like to receive a personal letter from him and would be happy to get one every day, the information I am asking is in the public interest, so that people will know what is involved. It is not for my private use. If the Minister writes me a letter next week, it is of no great interest.

I do not mean it that way, at all. The Deputy is asking what type of individual is affected by this. That information is not available at the moment, but as soon as I receive it, I will give it to the Deputy, not by letter.

Here in the House?

Yes, here in the House. The Deputy asked me to explain the reason for subsection (3) and I did.

Question put and agreed to.
SECTION 7.
Question proposed: "That section 7 stand part of the Bill".

What are the changes in the subsection of section 152 of the Income Tax Act of 1967 which relate to health contributions and life assurance contributions?

The section modifies the restrictions of the amount of relief available in respect of life assurance policies so that any excess premium due to health considerations which an individual is required to pay on a policy of life assurance will not be subject to certain restrictions imposed by section 152. Only the normal premium on the policy will be subject to these restrictions. The current limits are set out in section 152 of the Income Tax Act of 1967 which imposes restrictions on the amount of relief available under sections 143 and 151 of the Act in respect of premiums payable on life assurance policies. The aggregate of the premiums on which relief may be granted is restricted to the lesser of either one-sixth of total income, or £2,000 in the case of a married person or £1,000 in the case of a single person. The qualifying premium on any particular policy is restricted to 7 per cent of the capital sum payable on death. This latter restriction is modified in cases where special terms apply on health grounds. In those areas the 7 per cent restriction is to be calculated not on the sum assured but on the capital sum that would be payable if these special terms did not apply. The present section continues this policy by enabling relief to be claimed on premiums in excess of the existing limits where the excess is attributable to the health record of the assured person. That is the information I have on that.

This section is welcome.

Is the section agreed?

What does the section cost?

It is an insignificant cost.

Question put and agreed to.
SECTION 8.

Amendment No. 44 in the name of Deputy John Bruton. Amendments Nos 45 and 46 are consequential. By agreement amendments Nos 45 and 46 may be discussed with No. 44.

I move amendment No. 44.

In page 22, subsection (2), line 2, after "1982-83" to insert "(but subject to subsection (9)* of this section)".

The purpose of this amendment is to avoid retrospection in regard to the application of the provisions of this section. It appears that the provisions of the section will come into operation from 5 April this year. As we know, the section is a new one not known to the public or the people involved until the date of publication of the Finance Bill. Therefore in effect this new form of taxation on benefits in kind in the form of preferential loans is, to the extent that it is to apply from a date prior to the publication of the Finance Bill, retrospective legislation.

The purpose of my amendment is to deem the provisions of the section not to come into operation until 2 June 1982, which was the first date of publication of the section in the Bill. The Minister might argue that one has got to take a year as a whole and that one cannot say that a restriction applies for part of a year only to what is deemed to be income. I do not believe that is so. The possibility exists — indeed it is provided for in section 5 in regard to allowances for rent — for the apportionment of rent as between different years. It should be possible also to apportion benefits in kind as to part of a year and therefore part of the benefit only would be taxed in that given year. In other words, if the provisions of the section do not come into effect until 2 June one could allow no taxation in respect of one-sixth of the year, that is in respect of the months of April and May, in regard to which no notice was given of the introduction of this new form of taxation. This would mean that one would be deemed to have received five-sixths only of the full benefit in 1982-83, the one-sixth being the benefit received during that portion of this year when this proposal had not been announced.

I shall be asking the Minister also, on the section, if he will take a look at the problem — quite apart from this question of the date of operation — of people who, for instance, last year entered into certain commitments in regard to purchasing a house, say, of a certain size on the assumption that they would get a loan at a particular interest rate and now find that the tax rules have changed and that the resultant effective interest rate will be higher. Could something not be done to relieve these people in some way in regard to the change that has been made in their conditions, given that they entered into commitments? I should like the Minister to deal with that. If people have made arrangements on the basis of certain assumptions they must be prepared always to accept the fact that those assumptions may change. I will not be pressing the Minister hard on that matter but I should like him at least to advert to it and explain how he sees this affecting people. I would feel strongly that the amendment I am now proposing, which is more clearly justifiable in that it provides that there shall not be retrospective legislation, should be considered by the Minister. Naturally, I would be happy if he and his advisers were to look at the drafting of it to ascertain whether it is the most appropriate method of drafting. I feel it is wrong that there should be any retrospective taxation involved in this or any other section of a Finance Bill.

It is not clear from these amendments whether the changes sought are in respect of loans made on or after 2 June 1982 or in respect of interest paid or payable after that date. It is assumed that the amendments refer to the interest paid or payable after 2 June 1982.

That is correct.

Acceptance of the amendments would give rise to an immediate technical problem as banks and other financial institutions normally issue interest certificates for a full year and not for part of a year. Furthermore, some loans carry interest accruing on a dayto-day basis while others have set payment dates of equal amounts. Therefore, it is not always possible, even for the lending agency concerned, to say in respect of any particular payment what is the interest content. As the Deputy has said, these amendments seek to postpone the implementation of the provisions of the section to 2 June instead of 6 April. I do not think there is any justification for making this change since it is the intention of the Government to look into this matter of preferential loans in the context of this Finance Bill, which was announced in my statement on 25 March last, and to which I think I referred earlier on the Financial Resolutions. It is normal for changes announced in the budget to come into effect on the following 6 April. For that reason I must reject the amendments.

On the second point the Deputy raised, the case of those people who took out loans last year and who find now because of taxation changes that their mortgage or interest repayments are higher. I do not think that is a particular issue. All I know is that on my house mortgage the interest keeps changing a couple of times a year. There is absolutely no way in which one can be compensated for that. One has to live with those kinds of situations.

I accept the points the Minister has just made in regard to the latter part of my question. The Minister will appreciate that this is a point that has been made to me by a number of organisations representing workers affected. Therefore I think it right that I should at least raise it with the Minister.

There is a point that has been raised with me by the Confederation of Irish Industry. If I may I should like to read their observation to the House. Sorry, I suppose we had better move to the section first. Therefore, I will withdraw that amendment and move on to the section.

All the amendments?

Yes, they are interlinked.

Amendment, by leave, withdrawn.
Amendments Nos. 45 and 46 not moved.
Question proposed: ‘That section 8 stand part of the Bill'.

I shall read the observation that has been made by the Confederation of Irish Industry, which states:

Section 8(4) states that the amount of notional interest on preferential loans which is to be treated as income is also to be treated as interest paid for certain purposes of relief from tax.

The Confederation believes that the restrictions on the relief on tax will include relief for investment in companies and the Confederation believes that this type of restriction is undesirable. The Confederation recommends that section 8 (4) should be amended so that an amount of interest equal to the notional amount assessed under section 8 (2) or 8 (3) is deemed to have been paid for all purposes of relief from tax. The Confederation is also concerned about the principle of applying onerous conditions to existing loans. An employee may, for example, have received a preferential loan many years ago.

The first point I want to make is in relation to the quotation I have given from a submission made to me and I believe also to the Minister from the Confederation of Irish Industry so that the Minister has notice of this observation. I would be grateful if he could let me have his views on it.

Is it the Construction Industry Federation?

It is the CIF, the Construction Industry Federation.

I will give the Deputy some information I have which may give some reply to the points he has raised. The section is intended to counter large-scale abuses, particularly in the case of those in the higher income group, whereby benefits by means of preferential loans are given instead of increases in salary. However, as I said in the course of the Second Stage:

ordinary employees with a preferential loan will be largely unaffected by these changes. For example, the new arrangements will not increase the income tax for a married with a preferential housing loan of up to £40,000.

It is one thing to give the relief to an individual who borrows for the purpose of purchasing his home or his motor car, but it would not make sense for the State to subsidise by means of tax relief the investment by an individual in let property from which he would receive rental income or to buy in to a company where that investment is affected by means of a preferential loan.

It is also not seen how the provisions of section 34 of the Finance Act, 1974, that is relief to individuals on loans applied in acquiring interest in companies, could apply to the use of a preferential loan obtained by an individual to provide capital for that company by the purchase of the company's shares. Section 34 was intended to facilitate the injection of fresh outside capital into an under-capitalised company and it is not clear how the individual in question could obtain a preferential loan for this purpose unless from the company in which he proposes to acquire the interest.

The situations outlined appear to be highly artificial and ordinary employees are unlikely to be involved. There would be little merit in providing a tax concession on a preferential loan used for the purpose of enabling a person to become a landlord. If any actual cases are brought to my attention we will consider them with a view to the introduction next year of any necessary amendments.

This is really an attack on the perks in society and to that extent it is welcome because in this day and age, when the pressure on the State's finances is so enormous and when the tensions in society are getting to a very dangerous stage, the tensions between people in the same employment with different perks and what some people perceive as undue perks which some employees have over others, we could not really continue for much longer allowing some people to have loans at 5 per cent while the rest of us have to pay 18 per cent or 19 per cent for our loans. Some people could argue that if you work for a particular institution you are entitled to get some benefit from working for that institution. I believe in times of tremendous growth that kind of incentive might be justified, but in the present atmosphere and tensions in employment and in relation to income and standards of living it would not be justifiable to continue any longer allowing preferential loans to people in employment.

We tend to think of banks and insurance companies only in relation to this and that those are only the people who after a few years in employment can get a preferential loan. But there are many private companies in the country, small family companies, partnerships and so on, where all those preferential loans have been obtained for a long time. We have become a sort of perk-laden society and this has to be tackled very courageously in the present climate. I would like to say to the people who feel they are hard done by this, who perhaps a few years ago took out loans at 5 per cent and suddenly find they have to pay an extra £15 or £16 a week, that even though the section is putting in the figure of 12 per cent it is still a very good bargain in relation to present day prices. There are some people who would argue that it should be brought right up to the commercial rate the rest of us have to pay. In fairness, I believe the suddeness of the jump will play havoc with the budgets of the people who got those preferential loans many years ago and it will throw their day to day budgets into turmoil. I suppose, therefore, a more reasonable figure had to be picked rather than going for the full commercial rate.

Many of my constituents have approached me on this and have pointed out how terribly aggrieved they are that they suddenly find they have this extra bill which they had not planned for. I want to say to them that 12 per cent is a fairly good deal. As time goes by and if the tensions in society increase because of the standard of living which we all find difficult to maintain, never mind improve, we will have to look at other areas. I believe there are many areas, such as the travel world, in which the provision of loans and all those other perks are tucked away. I am not advocating a large scale attack on them. When we consider the difficulty there is in running the State finances and the tensions in society, justice has to be seen to be done. If you are living next door to a person who has a loan at 5 per cent and you are put to the pin of your collar to meet an 18 per cent or a 19 per cent loan, it is not unreasonable that you would feel very aggrieved about that. I have to ask those people, admitting that it is an imposition on them, it is difficult for them and it is suddenly throwing into turmoil their domestic budgets, to understand that in the interest of trying to get some type of tax equity into society this has to be done. At 12 per cent it is still a very good bargain.

I have three questions to put to the Minister. Will the Minister give an indication of the number of persons involved who have benefited under this provision so far? Will the Minister tell the House the amount of revenue to accrue to the State in a full year as a result of the change and if I am correct in assuming that employees of certain State bodies, such as Irish Life, the Central Bank, ACC and ICC are in receipt of preferential loans in the course of their employment? It would be good if the Minister could tell the House the sectoral numbers involved.

The total number of people that we would gather on preferential loans of one kind or another is 7,000 and about 1,000 will be affected and have to pay more tax under this section. The amount that will be taken this year is £.3 million and in a full year £500,000. The answer to the third question put by the Deputy in regard to the various State or semi-State agencies is "yes", some of their employees do have preferential loans.

Is the Minister in a position to tell the House if the figure has reduced or increased in recent years?

It has tended to increase rather than reduce.

Before we pass from this section I should like to give Deputy Bruton some information on a matter he raised in regard to a previous section. It is mainly concerned with a person who has two employments. I will give the Deputy an example. In employment A he has £800 and he pays PRSI at the higher rate while in employment B he also has £800 but does not pay the higher rate of PRSI. That is the type of individual we are talking about. If the £600 was given first against employment A only £200 of the £312 PRSI deduction would be given and the balance would not be set against employment B because PRSI was not paid on those emoluments at the higher rate. What happens is that the £312 is first put against the emoluments of employment A and only £488 of the £600 PAYE allowance is required to cover the remainder of the emoluments and the balance of the £600 PAYE allowance, £112, can be set against employment B. The taxpayer does not lose any part of the £312 or the £600. It is to help the taxpayer. I apologise that I did not have the actual details earlier.

Question put and agreed to.
Section 9 agreed to.
SECTION 10.
Question proposed: "That section 10 stand part of the Bill".

The purpose of this section is to amend the amount specified in subsection (5) of section 485 of the Income Tax Act, 1967, which is concerned with recovery of tax by a sheriff or county registrar to bring them into conformity with the new limits of jurisdiction of the circuit and district courts which were established by the Courts Act. The same applies to the next section.

Question put and agreed to.
SECTION 11.
Question proposed: "That section 11 stand part of the Bill".

The reason for this change is similar to that which applies to the last section except for a different purpose, dealing with the Collector General.

Question put and agreed to.
SECTION 12.
Question proposed: "That section 12 stand part of the Bill".

This section continues for a further year the relief in respect of the labour cost element of expenditure by householders on the maintenance. repair or improvement of their residence. The scheme was introduced for 1979-80 on a temporary basis but was continued for 1980-81 and 1981-82. The limits on such expenditure for purposes of relief remains at £450 for single persons and £900 for a married couple. This is simply a question of extending the existing scheme that has been in operation since 1979.

Will the Minister indicate his long-term intentions in regard to this scheme? Does the Minister intend to continue with it indefinitely? Is the Minister aware of suggestions that if one has a choice of two contractors, one of whom is operating under the scheme and the other is not, the price of the contractor in the scheme is higher to the extent of the allowance than the contractor who is not in the scheme. That suggests many possibilities none of which is very reputable. Originally the section was justified, among other things, on the grounds that it would help to catch builders who were not declaring their income from small residential jobs for tax purposes. Any contractors who were to be brought into the net by that means have been brought in by now and I imagine that no other people will be brought in unless the Minister can indicate that in the last year or so there has been a significant number of new registrations for the purpose of the section. If that is the case then the section is still doing valuable work in the matter of detecting tax evasion. I would be glad if the Minister would comment on those points.

The number of registered contractors increased from 64 in mid-July 1979 to 2,921 up to mid-May 1982. Obviously, it is having some impact. With regard to the question about my long-term intentions I should like to tell the Deputy that I am not in a position to make them known at this stage. I agree with what the Deputy has said. I had experience of cases where two or three people sought prices for work on houses and the fully authorised certified contractor was higher than the others. It is obvious from the figures I have given that some progress has been made. It is possible that we could design a better system but because of the short space of time at my disposal I felt it would be better to roll it on for another year as is proposed in the section.

Question put and agreed to.
SECTION 13
Question proposed: "That section 13 stand part of the Bill".

I welcome this section. It is one of the items contained in the six-point plan for agriculture published by Fine Gael in December 1980. At that time agriculture was in a deep depression, a depression which has only slightly relieved in recent times. The problem then and now is in relation to stock numbers and the fact that less milk and beef was produced. One method we proposed to alleviate that situation was to give 110 per cent stock relief in respect of cattle numbers so that farmers would be encouraged to increase stock numbers. I am glad the Minister carried this proposal through, which we made in December 1980, and incorporated it in the March budget.

Question put and agreed to.
SECTION 14
Question proposed: "That section 14 stand part of the Bill."

This section continues for the year 1982-83 the special treatment which was also provided for 1980-81 and 1981-82 regarding dates of payment in the case of full-time farmers. As a result, these farmers will pay income tax on their farming profits in two instalments, on 1 October 1982 and 1 January 1983. Since 1980 all other schedule D taxpayers are required to pay tax in one instalment on 1 October in the year of assessment as provided by section 14 of the Finance Act, 1980. This is a concession to farmers because of the difficulties which were outlined by Deputy Bruton. Hopefully those difficulties are being overcome now.

Question put and agreed to.
SECTION 15.

Amendments Nos. 47, 48, 49, and 50 have been ruled out of order because they involve a potential charge on the people.

Question proposed: "That section 15 stand part of the Bill."

This section is consequential on reduction of the rates payable by farmers in 1982 to one-half of what otherwise would have been payable. The section reduces by one-half the rates credit which would otherwise be available against tax on farming profits for the year 1982 and 1983. They will be entitled to a credit for one-half of the rates paid in the year ended 31 December 1981 against income tax liability for the year 1982-83. The portion of rates which is not being allowed as a credit will be allowed in the normal way as a deduction in computing farming profits.

Regrettably, when one is in Opposition one can only make provision for tax relief. It is an anomalous situation. One cannot impose charges as such. Under the current budget proposals, rates credit under which farmers may credit rates paid in the previous year against current income tax liability will be reduced by 50 per cent in the year 1982-83 and abolished altogether the following year. I am of the view that even that provision should not have been granted by way of concession. The main point I am making is that in 1981 the PAYE sector paid 17.5 per cent tax as a percentage of income whereas the farming sector paid only 1.7 per cent. That is of considerable concern in a community where we do not have a balanced tax structure. Hopefully, the committee on taxation will highlight this. There is no doubt that of the 160,000 full-time farmers about 30,000 of them could well afford to pay substantial income tax. They should be obliged to pay the same form of measure as the PAYE wage and salary-earner. It is appropriate that we should see farming as a business enterprise and allow substantial deductions in the normal process of an enterprise; but, in the heel of the hunt, there must be some liability. The major political parties, largely because they are dependent on segments of farming support, are very reluctant, and have been subjected to a great deal of internal pressure, not to do what they in justice feel should be done.

I come from a farming background in North Cork and have no antagonism whatsoever towards farmers. Most of my relatives are small and medium-sized farmers. Some of them regard PAYE as a peculiar Dublin joke in which I am involved. It is often assumed that politicians who speak strongly about farmer taxation are some kind of peculiar concrete urban breed always travelling into the country on forays to capture individual farmers and make them pay tax. This is not so. There are some 30,000 farmers who should be paying substantial taxation on incomes earned from their enterprises. At present they pay very little. This relief will be abolished altogether in 1983-84. However, the 50 per cent concession should never have been introduced. We have a major change now which will have to be considered. I strongly wish to make that viewpoint known.

Deputy Bruton has already referred to the fact that these sections are the carry-over effects of implementing various decisions by successive Governments to assist the farming community when farming income declined, which nobody has ever denied. For two to three years farming income declined substantially and it is only now that it is beginning to turn around. These concessions are a carry-over as measures of assistance to help farmers. In relation to rates, the farming community have always said that they have no hesitation in admitting and accepting that they should pay their fair share of tax and they have always claimed that rates are a form of double taxation. Successive Governments through the years have in one way or another, depending on valuation, abolished rates and both sides of the House have agreed that next year rates will be abolished completely and then an income taxation system can become fully operational for farmers. These various sections are carry-over measures legislating for measures already introduced to assist farmers through a difficult time. We all hope, in the interests not only of the farming community but of the economy as a whole, that the corner has been turned and that we will continue to make progress in the agricultural sector, because we will be depending on them for increased exports and output and increased help for the balance of payments as well as for the economy generally.

On farm taxation, it is probably recognised by the farming community that unreasonable opposition to reasonable proposals for farm taxation in the end leads to disproportionate and unjust taxes being introduced when counter-pressures are put on the Government by other sectors. The best example of this is the resource tax which was an unjust tax introduced chiefly because of the farmers' objection to any other proposals brought forward previously by the Government was so comprehensive that in the end the Government acted in panic in an unjust fashion. It is in the interests of the farming community as a whole that there be a stable and fair system of farm taxation under which the farming community will be seen to be paying what they agree they should pay, their fair share, and that the tax code applying to them will not be subject to change every year as a result of pressure either from within agriculture for less taxation or without agriculture for more taxation on agriculture. If agriculture is to develop it needs a stable system of farm taxation which is accepted as reasonable by everyone, including the farmer, and which does not change every year, thereby inhibiting development. I hope that we are moving towards such a system. We will have to await the Government's decisions on the Commission of Taxation to see what such a system will be, but the aim should be having what is fair, seen to be fair and stable, in other words that it does not change every year from one system to another under political pressure. Otherwise it will not provide a framework for investment.

One is very well aware of the problems encountered by the farming community and at present it is very depressing to see young people who have invested and borrowed money to improve their holdings going to the wall every other day. Also a greater number of small farmers are applying for unemployment assistance.

However, a number of farmers could and should be paying tax under the system and the reason they are not perhaps is that the Government and former Governments have not been able to introduce a taxation system which would be fair and equitable for farming because there has been no policy for agriculture. Many farmers who have in excess of 100 acres of land have not been paying tax over the past years. They have been lodging all their income in the bank while agricultural workers on the same land have paid tax because their earnings were known to the Revenue Commissioners. This year farm income will rise by 25 per cent and this when the total amount of rates paid by a farmer is to be allowed only as a deduction in computing taxable profits and not as a credit or instalment of the total tax bill payable. Nobody accepts for one moment that people who cannot afford to pay should be paying tax, but when people with 400, 500, 600 acres of land refuse to pay rates and are not paying their proper share of tax, that is wrong and must be rejected.

I support some of Deputy Sherlock's observations in this area. I understand that the Minister cannot adopt a certain attitude to any one sector of society and he must endeavour to be fair and broadminded in his attitude and approach and to encourage and stimulate all sectors of our economy to be productive and to create as much employment as possible. The farmers have had the best of all worlds for too long and they see themselves as being somewhat apart from society and having a right to do as they wish with their land. The Constitution enshrines the right to private property and so on, but the day is gone when the farmers can have the best of both worlds. They come to the Minister in lobbies with submissions looking for help, and if the Minister is as responsive to them as he is in this Bill before the House, they have an obligation to have some public accountability. The farm as a unit cannot be seen in isolation.

It is important that the farm be seen as not just land to sit on and have and acquire. Deputy Bruton yesterday used the term in the House, "a man of straw". Where I come from in Limerick the farmers consider a man of straw to be a man of no property. One day I heard two farmers speaking in a public house and one of them praised another man. However, the second farmer had not much time for the man referred to who was a neighbour of theirs. "Ah, well," he said, "I do not like him. He is only a man of straw, he has no land." It is wrong to draw that type of distinction. One man is as good as another. The attitude of tuppence-ha'penny looking down on tuppence is rife in the farming community, but the Minister here cannot subscribe to that philosophy. If farming can be productive in countries like Holland with a population of 14 million, or in Denmark, there is no reason why farming cannot be efficient here. There is no point in molly-coddling farmers as we have done in the past. In modern society they must pull their weight and help in finding the solutions that the Minister is seeking to such problems as employment in food processing and production. There is no reason why farming here cannot be productive and efficient, but our farming must surely be the most inefficient in Europe. We have ladled out money to farmers for decades and they must show some return for it. Deputy Sherlock is right in saying that the greatest opposition the ordinary PAYE workers have to farmers is the farmers' point-blank refusal to pay any form of taxation whatsoever when the going was good, and the going was very good and lucrative for the farming community up to about two years ago, and they were rolling in wealth then. In my part of the country, the Golden Vale of Limerick and Tipperary, they have the most lush and fertile pastures in Europe and probably as good as any in the world, and the people there refuse in a steadfast way to countenance even the idea of paying taxation. That got people's backs up. It got into the noses of most working people. The farmers who were rolling in wealth then had more wealth than culture. They did not know what to do with their money. They bought second and third cars and more land, but the land they bought was not all used for productive purposes. There was an element of speculation in the buying of farming land. A Leas-Cheann Comhairle, if you or I become involved in buying land we must take the consequences for that. Nobody will bail you or me out if we get into financial difficulties. Some of the speculation by farmers was not wise and it was done for greedy and selfish motives. Now they come crying crocodile tears depending on the Minister and the people to bail them out of the difficulties they are in.

Accountability and responsibility must exist in farming. If the farmers produce efficiently they will help all sectors of society. The day has gone forever when farmers can be seen in isolation from the problems of society. I do not come here to be a dog in the manger. I prefaced my remarks by saying that I understand the Minister has a global responsibility for all sectors, including farmers, but let the farmers wake up. They must realise that the day is gone when they can exploit people, when they can avoid paying their fair share of taxation. They must respond, like everybody else, to the problems and needs of society. They cannot divorce themselves from these problems as they did all too often in the past. Above all, they have responsibility to be productive and efficient in order to meet some of the problems we are faced with today.

Question put and agreed to.
SECTION 16.
Question proposed: "That section 16 stand part of the Bill".

The purpose of this section is to revise the scheme of capital allowances on farm buildings so as to exclude from the scope of those allowances capital expenditure which is incurred on or after 6 April 1982 on the construction of farm dwelling houses. At present up to one-third of capital expenditure on farmhouses qualifies for capital allowances. No other section of the community enjoys such an advantage and in the interest of general equity as between taxpayers it has been decided that this exceptional treatment should be terminated.

Question put and agreed to.
SECTION 17.

Amendment No. 51 is out of order. I have indications from Deputy B. Desmond, Deputy Kemmy and Deputy Gregory-Independent that they oppose the section.

Question proposed: "That section 17 stand part of the Bill".

This section provides for the abolition of resource tax, which was discontinued in 1981-82, with effect from the year of its inception, 1980-81. It also authorises the repayment of resource tax already paid.

We are opposed to the section.

I indicated that the Deputies had so indicated by tabling an amendment which, as I have said, was out of order.

This section implements another one of the six points for the revival of agriculture which was put forward by my party in December 1980. This was a six-point plan which was supported by a signature campaign throughout the country. We believe that the resource tax which was introduced by a previous Fianna Fáil Government——

And is now being abolished by them.

—— was unjust. It is now being abolished by them. I do not wish to take away from that. I merely indicate that I believe the resource tax was ill-conceived. It was not a resource tax as recommended by the National Economic and Social Council which would have been related to genuine productive capacity. It was a discriminatory tax based on the archaic Griffith valuation system drawn up in the 1850s when farmers were to be asked to pay this tax if their valuation — in some cases quite artificially — was above £70 regardless of whether they were making any income on the farm. This taxation would have been payable whether an income was being made or not. We do not, as I said in regard to an earlier section, believe that there should be resistance by the farming community, as I must say there has been in the late seventies to an unreasonable extent to reasonable proposals for the taxation of the farming community. Unfortunately, if resistance is carried to an unreasonable extent it often leads to pressure on the Government from other sources which are equally unreasonable and it leads to unreasonable proposals such as the resource tax.

I believe that this tax which we undertook to abolish should be abolished. I look forward to a time when agricultural conditions will have improved, as I hope they will in the next two or three years, when farming will, through a fair system of taxation, be able to pay a much more substantial sum towards the overall running of the State. It is not acceptable that farming should not pay a reasonable and proportionate contribution. I hope such a system will come into being and that agriculture will be of sufficient strength as to be able to pay such an amount of taxation. I am confident that taxes such as this particular type of resource tax, which was a Griffith valuation tax and not a resource tax, will have no place in a fair system of farm taxation.

Our party proposed the abolition of this resource tax and I am pleased to find this provision in the Bill now before us. This resource tax and the other unfair tax, the 2 per cent levy, have caused considerable fear in the farming community. The Government are correct in abolishing this particular resource tax. I think it is accepted on all sides of the House that the farming community are experiencing great difficulty at present. They have not experienced such difficulty for many years. This small gesture, on the part of the Government prompted I hope by our party, while small is a very welcome step. I heard Deputy Sherlock say that he is opposing the section but I think anybody representing a rural constituency at present must understand and appreciate how bad the farming situation is. In my view it is unprecedented.

Many farmers find themselves with huge commitments to banks and financial institutions. This must be appreciated. A resource tax of this nature is an added burden on the farming community which, with the rampant inflation from which the country is suffering they are unable to meet. The whole concept of the tax was totally unfair and unjust. There was no question of whether a person was able to pay it or not; he was just told to pay and had to pay. Some farmers are in a desperate financial situation which they will never get out of in their lifetime. I hope the Minister will arrange for the refund of this resource tax to many of these farmers who need the money and I urge that the refunds be made as soon as possible.

We oppose the handing back of this tax to farmers. We believe it is unprecedented that the Dáil should agree to hand back tax levied by this House and agreed to by the House. The majority of farmers refused to pay it. The miserly amount collected is now to be handed back and in my view that is a disgrace.

We had a lot of whingeing and crying here over the past few months from the Fine Gael benches about the relief given to people paying very high rates of PRSI. There is no way in which PAYE workers can escape when a tax is levied by this House. Nobody will come back next year and say: "We feel it was a bit too rough on them and we will give back half or all of what we got from them last year." While the resource tax may have leaned somewhat heavily on some farmers, they can recoup that tax by utilising the land they have. The amount of land not being utilised is a disgrace. The resource tax could be used as an incentive to ensure that the land is utilised.

The whole concept of giving back tax to a sector of society that pay something in the region of 1 per cent of all income tax collected in the State is to be deplored especially when one realises that the people who proposed this in the first place, though Fianna Fáil are equally to blame, proposed taxing shoes and clothing as well as social welfare payments. These were the people who at the same time decided to hand back money to farmers who were legally and properly liable to pay the tax concerned but who refused to do so and because they refused to pay it was decided to scrap the tax. That was a ridiculous decision.

I am opposed to this section. In 1978 within a year of coming to power, the Jack Lynch-led Fianna Fáil Government had concluded that the most suitable form of agricultural taxation should take the form of a resource tax. This was clearly indicated in their Green Paper of June 1978 entitled, "Development for Full Employment. This argument was developed further in the January 1979 Government White Paper entitled, "Programme for National Development 1978-1981." It was stated in that programme that, and I quote:

The Government see taxation in the agricultural sector, as in other sectors, not only as a means of raising Exchequer revenue but as a positive instrument for the development of the sector. It was in this context that the Green Paper put forward the option of a resource tax, an instrument which has many development advantages. However, farmers' representatives, in their submissions on the Green Paper, stated their opposition to such a tax. ...

The Fianna Fáil programme went on to state:

Much Irish land is under-used. A resource tax acts as an incentive either to use available land effectively or to release it to those willing to use it; furthermore, such a tax, since its marginal rate on additional income is zero, does not constitute a disincentive to higher output. These advantages have been recognised by the NESC in their Report on Policies for Agricultural and Rural Development (No. 42). The introduction of a resource tax was also recommended by the Inter-Departmental Committee on Land Structure Reform which reported in May 1978. The Government are in favour of a resource tax in principle. They recognise that local authority rates on land are to a large degree a resource tax but that the present reliefs from rates provided through the Agricultural Grant weakened the effectiveness of rates as one of the means of ensuring proper use of our land resources...

In line with this and in response to the trade union campaign for a fair taxation system, the then Minister for Finance, Deputy Colley, issued a statement on April 24, 1979 detailing the Government's farm tax package for 1980-81. The resource tax part of this package could only be regarded as a first step. Of about 120,000 full-time farmers only 14,000 were expected to pay this resource tax — those on holdings of £70 rateable valuation or more or, in other words, on holdings roughly exceeding 140 acres. The tax was to be levied at a rate of £3.50 per pound rateable valuation and was to bring in about £7 million per year or an average of £500 per year per farm in respect of the minority of 14,000 big farmers who would be liable to pay it.

Before the year was out Deputy Haughey had become Taoiseach and subsequently there was a Cabinet reshuffle. On budget day 27 February 1980, the new Minister for Finance, Deputy O'Kennedy, did indeed introduce a resource tax along those lines for 1980-81. A week later, however, the Taoiseach made it clear that he intended disowning the Government's commitments in this regard. On 5 March 1980 he told the Dáil that his Government looked on resource tax as a short-term expedient, adding that it was not the Government's intention that this should be a permanent feature of the system. This was tantamount to tearing up the previous year's Government White Paper. On budget day one year later, January 28 1981, another Fianna Fáil Minister for Finance, Deputy Fitzgerald, confirmed this Fianna Fáil somersault when he told the Dáil that the Government decided earlier that the resource tax would be discontinued after one year and that he was confirming that decision. He went on to say that the consequent saving to the farming community would be more than £6 million a year on the basis of the tax provisions introduced in the previous year. He added that resource tax due in the previous year but not paid remained due and would have to be collected during the course of the year. The 1981 Fianna Fáil election Manifesto boasted of the abolition of resource tax and by implication the tearing up of the Lynch Green and White Papers of 1978-79. Obviously, Fine Gael acquiesced in this abolition by virtue of their complete silence of the issue in their 1981 election Manifesto. But this silence meant also that so far as the electorate as a whole were concerned there was no Fine Gael attempt to outbid Fianna Fáil on this issue by promising that the resource tax due in 1980 would not be collected or that the amount which had been collected so far would be returned to the farmers. Accordingly, when the Irish Farmers' Journal on May 30, 1981, ran a feature on Fine Gael's farming manifesto, they did not find it possible to hold out any promises regarding the 1980 resource tax. Within a week, however, Fine Gael campaigners for the farming vote held out a promise which had no place in the manifesto that they had seen fit to put before the people as a whole. On June 6, the Irish Farmers' Journal reported:

On the farming taxation issue, Garret FitzGerald has now made very clear commitments which he repeated for the Farmers' Journal....

They went on to say that:

Fine Gael has also pledged to pay back resource tax already paid and cancel existing bills for it.

Nevertheless, Fine Gael did not win the election outright. While promises to the farmers which had been written into their election manifesto did find their way into the Coalition Government programme, this extra nod-and-wink understanding did not. The Coalition document, "Programme for Government 1981-1986", accordingly allowed no scope for any behind-the-scenes understanding between Fine Gael and farmers that the resource tax due for 1980 would be given back to the farmers. When the Labour Party conference endorsed the Coalition arrangement, they certainly did not endorse what remained excluded from the Government programme. Still less did the Dáil when it endorsed Deputy FitzGerald for Taoiseach on June 30 last year. Therefore, it is not surprising that when the Irish Farmers' Journal on July 4 1981 ran its first feature on the new Minister for Agriculture, Deputy Dukes, and quoted from what he had to say on Government policy regarding farm taxation, not a single word was said about handing back the 1980 resource tax. More significantly still, when the new Minister spoke during the budget debate on July 22 last year he did not make any mention of any such intention. However, three weeks after the Dáil had risen for the summer recess the behind-the-scenes deal came out into the open.

In its issue of August 14 1981 the Irish Independent carried a front page report which revealed, and I quote:

The Government is to take the unprecedented step of returning about £700,000 to farmers, collected under the controversial Resource Tax which operated for 1980 only. And rates on agricultural land are to be finally abolished from next year's budget — a move which will cost the Government £35 million in 1982 in compensation to local authorities. The original target for revenue for Resource Tax introduced in January 1980, by the Fianna Fáil Government, was £7 million in the first year.... Most refused point-blank to pay it...

The Irish Independent incorrectly stated that the refund had formed part of the Fine Gael election manifesto as did the Irish Farmer's Journal in its report on August 22, 1981, ignoring the fact that they could find no such promise in reporting on the manifesto on May 30. In the issue of August 22, that paper reported:

The Government is to refund farmers the £700,000 collected under the controversial Resource Tax. This announcement was made by the Minister for Agriculture last week... Alan Dukes described the refund as a significant step, as the tax had been legally collected... It was payable by about 14,000 farmers, but was fully resisted ... It was implemented for the year 1980 but was discontinued by the farmer Taoiseach...

That is a misprint in the Irish Farmer's Journal; perhaps a Freudian slip—

... Charles Haughey, when he came to power. It will probably be late in 1981 before the refunds are made.

Deputy Dukes had no mandate for such a retrograde step. The Fine Gael Party did not include such a promise in the manifesto which they saw fit to place before the electorate as a whole. Fine Gael and Labour included no such promise in the Coalition programme which they placed before the Special Conference of the Labour Party. The Coalition Government never even gave a hint of any such promise in Dáil Éireann.

It is important to stress that only a small minority of the richer farmers were liable for the resource tax in the first place. It is true that the majority of farmers had a bad year in 1980. The average family income per full-time farmer was £3,685. There are about 120,000 full-time farmers in this State. Many did better than average. For example, 31,000 had an income in excess of £5,000 in that year. More significantly still, 15,000 full-time farmers had a family income per farm in excess of £8,000 for 1980. These figures are given in the Farm Management Survey, 1980, and are available to every Deputy. It is this category of better-off farmer for whom the resource tax was intended. The minority of 14,000 farmers liable for resource tax were expected to contribute only £7 million under it — in other words, an average of £500 each per year, or £10 per week. In the event, only £700,000 was collected, or an average of £50 each for the whole year. This shabby move contained in the Finance Bill is designed to hand back this miserable amount, £700,000, to the better-off or tight-fisted farmers, while workers continue to carry an even heavier burden of taxation measures.

I have no hesitation in opposing this section. To do otherwise would be dishonest, and wrong, and flying in the face of reality. The reality is that while workers in the PAYE and PRSI sectors are carrying a bigger burden of taxation than ever before in the history of the State, we are now proposing to hand back this miserable sum of £700,000 to people who have creamed off the profits of farming down through the decades. They paid it for one year at the miserable sum of £10 per week. Surely that is one of the most ludicrous proposals ever to come before this House in its 60 years history — to hand them back this money at a time when workers cannot get legitimate refunds or rebates of money which has been stopped incorrectly. It is very wrong at this time. The Minister says every amendment will cost more and therefore he is resisting it. In many cases I suppose he is right. It is his duty and his job to resist any attempt to add to public expenditure. On the other hand, he is now handing back quietly £700,000. He cannot defend that. Nor can Fine Gael defend their policy in this regard. Therefore, I oppose it.

If Deputy Kemmy had gone into the circumstances he outlined very briefly in his remarks, he would have found a rather different picture from the one he has given. He gave us a fairly complete outline history of the measure in question, the consideration which led to it in the first place, and the time at which it was adopted. I would ask him to bear that in mind when we come to finalise our consideration of this measure.

The point Deputy Kemmy appears to be making, without actually saying it, is that this resource tax is one of the few forms of taxation paid by our farming community. I would ask him to reflect a little further on what he has been saying. This is not by any means the only form of taxation paid by the farming community. It is not by any means the only form of taxation to which they are subject. We have an income tax system in operation. This year for a segment of our farming community, we still have the rates system in operation, and I hope we will see the end of it next year. Contrary to what Deputy Kemmy seems to think, the farming community are like everybody else. They buy all the goods which are subject to indirect taxation. They are just as much subject to VAT on their family expenditure as anybody else in the community. They pay their share, if you can call it a share, of indirect taxes, excise duties of all kinds, and so on. There is no way in which it can be said realistically that the farming community escape from the tax net in any way. That is the first point I want to make, and it should be very clearly understood.

The next point I want to make is that the rationale of this resource tax, as indicated by Deputy Kemmy, is a fairly curious one. The principle underlining it is very simple, and it seems to have a certain air of respectability about it in many quarters. It says: "Here we have people with a productive asset. In order to make them use that asset productively, we will impose a tax which has no bearing on and no connection with the use they are making of it, or can make of it, or will make of it, on the principle that the more tax you have to pay the harder you will have to work in order to make enough money to pay the tax and have an income afterwards".

I do not know whether there is any other form of taxation which operates on that principle. It would be like saying to a PAYE worker: "Before you start, we will decide that you will pay £X of income tax. That will make you work harder, because you will know you will have to meet that bill before you get any income out of the activity you are involved in." I am not sure that there are many people in this House who, if they thought about it very deeply, would be very keen on having in our tax system a range of what you might call coercive taxes to make people be a bit more diligent in their profession, or to hobble people with a tax bill in respect of their profession before they start doing any work. That is principle contained in this resource tax.

I know it was enshrined in a Green Paper and further enshrined in a White Paper. With all due respect to the people who produce Green and White Papers, I am not too sure it is a principle we should be keen to bring into our tax system. I do not see why we should say to somebody who is the owner of a resource which he has to use in order to live; "We think we have found a means to ensure that you will work and use this resource economically, and to do that, we will saddle you with tax which you will have to pay whether or not you are able to use that resource."

Reference was made to the fact that a good deal of our land is under-utilised. I do not think there is any disagreement about that. Land is not peculiar in that respect. Many resources are under-utilised. Physical resources in terms of land, machinery, factories, and so on, are under-utilised. A great many other resources are under-utilised. Grey matter is one of them. Many people have a greater capacity for work, for ingenuity, for innovation, than they bring to bear on their economic activities.

Does Deputy Kemmy seriously suggest that we should try to find some form of brain tax which would involve us saying to people "We think your IQ is a bit higher than the results of your work would indicate and to make sure you use your resources fully and intensively, we are going to tax you"? I do not know what the feeling of the House would be if we were to do that, but I would not expect to see a great deal of enthusiasm for it. I do not see any reason why we should single out land as a resource particularly suitable for the application of this form of tax. A possible reason could be that a great many people feel, justifiably, that we could make a lot more income out of land and that we could produce a lot more from the land than we do. I would not dispute that. My dispute would be with people who think the application of a tax completely unrelated to earning capacity is the way to do it. Let us look at what is involved in applying a tax of this kind. There are wider ramifications than just the resource tax.

A farmer has a given amount of land which was valued at £X under the Griffith Valuation when farming conditions were very different. The farmer could be a young man in the full bloom of his vigour and health, educated in the skills of farming, involved in farming for a number of years. He could have built up a stock of capital and could reasonably be expected to use his land intensively. He could be a man who reads the farming papers, listens to the agricultural advisers, reads the reports of the Agricultural Institute and makes the maximum use of his land. Equally, he could be a person who had a certain amount of land but might not be as intellectually gifted as the first farmer; he might not be physically gifted in the same way, or he might be unable to carry out the amount of work required to fully exploit that land. He might be one of the many people who are living and working on farms, where in the mid-nineteenth century there was a brisk trade of growing flax which was a remunerative crop but which is no longer.

For that reason, he could find himself saddled with a high valuation on his land which has no bearing on his income earning capacity today, and if he worked all the hours God gave him, he still would not be able to make a substantial living out of that farm. There are many people like that all over this country, not just in the west or south-west but in the midlands and the south-east as well. Regardless of the valuation of his land, for one reason or another, he may not be in a position to apply all the latest agricultural techniques and get a high level of production out of land, but because his land has a valuation over the fixed threshold we will tell him he could make a lot more money out of his farm and if an extra tax is imposed he will have another incentive to work harder and increase his income. I am not sure whether Deputy Kemmy really understands the full implications of the measure he is proposing. We had the same problem in relation to the rating system which was supposed to be the kind of measure which would bring——

All your comments are relevant but I want to remind the House that you have a vast area to cultivate by 7 o'clock and unless there is greater brevity there will be a lot left fallow at 7 o'clock.

I appreciate the spirit in which the Chair handed out that reminder. Sometimes I tend to get carried away. Deputy Kemmy said I had no mandate for what I said last August. That is not true. A decision was taken by the Government at that time that we would follow that course of action, and we stick to that decision now.

I am not entering this debate in a spirit of acrimony because I look to people like the Minister for Finance, the Minister for Agriculture and Deputy Dukes to find some way forward. It is not good enough for Deputy Dukes to come here and defend the farmers saying I might not understand this question of taxing big farmers. I do not see how a tax of £10 a week for one year could be a wrong form of taxation, and it is wrong that this money should be given back to them. To take £10 a week from them for a year may be a crude tax mechanism, but these people could afford to pay this tax because they are the upper crust of Irish farming. They deny anybody the right to tax them. After a great deal of huffing and puffing the Government got £700,000 from them, but to give them back the money is a backward step.

I appreciate Deputy Duke's position representing a constituency in County Kildare, a farming community, and his position as Shadow Minister for Agriculture. It is not good enough that he comes here defending farmers while at the same time ignoring the problems of agriculture and the refusal of our farmers to be efficient. Saying that farmers pay taxes every time they buy shoes and clothing is not good enough. That logic is flawed. On the question of taxing intellect in this House, from what I have seen in the short time since I came here and judging by the contributions made, some people would have very little tax to pay. I would not push that analogy too hard because the least said about some Deputies the better.

I find it extraordinary that some Deputies—some of them large farmers themselves — come here crying about what large farmers have to pay in taxes.

I do not own an acre of land.

No, but the Deputy's colleague sitting beside him owns a fair amount of land.

That is not relevant.

It is relevant, very much so. The resource tax was charged on farmland in excess of £70 valuation. According to my information to qualify for a £70 rateable valuation you have to have at least 100 acres of good land.

That is not correct.

There is no way a farmer with 100 acres of good land cannot pay the resource tax, particularly in view of the fact that farmers have consistently refused to and campaigned against paying tax. The resource tax, while only being charged on the largest farmers, was the first effort to introduce a land tax to make agriculture a little more progressive and effective.

We are told night and day that the farming industry is the largest in the country but it is the least effective and efficient. Until farmers decide to pay their fair share of tax and utilise their resources to create the jobs needed for the 150,000 people unemployed — a number of the jobs required to take those people off the dole queues could be created if our land was properly utilised — we will support a resource tax.

It will be interesting to know if those people who are opposing the section are proposing also, in respect of those farmers who have not paid the resource tax because they could not afford to do so, that we should proceed to collect it from them. That should be made clear. If we are not going to collect the money from those who have not paid the tax, it would be unjust to retain the amount paid by those who met their liability.

I would point out to those Members who have expressed opposition that farmers pay income tax. If they make an income they pay tax on it and they have to keep accounts to show that. If the income tax code does not work properly, if there is a need to restrict the allowances that farmers get, that is the way it should be done. However, there have been no proposals on that point made by the Deputies who spoke. I believe that farmers should be taxed on income, just the same as everyone else. The resource tax principle, based in this instance on the Griffith Valuation, is quite unjust. As Deputy Dukes clearly pointed out, it has no relationship to actual earning capacity. It should never have been introduced and it was a major mistake to introduce it.

Deputy Kemmy referred to the NESC proposals. There is a marked difference between their proposals and the actual proposals for the resource tax. The tax that was introduced was related to the 19th century Griffith Valuation and, as such, it was quite unjust and archaic. There was no connection, except in name, between the resource tax suggested by the NESC in their Report No. 42 and the proposals of the then Government. To defend the proposal of the then Government by referring to Report No. 42 of the NESC is not to make a correct allusion.

I find it extraordinary that Deputies are arguing that because someone cannot pay tax it should not be levied. The PAYE people are not asked if they can afford to pay taxes that are taken out of their wages each week. As far as I am concerned it is not an argument. A sum of £7 million should have been obtained by way of resource tax in the year 1980-81 but less than £500,000 of that was collected due mainly to pressure from the IFA. The people who want the abolition of the resource tax not only want to write off the fact that farmers did not pay their due share of tax but they want to give back the few pounds that was collected, and legally collected.

I represent a constituency where 50 per cent of the people live in villages and towns and the other half live in rural areas. I regret the whole tone of this argument. Discussion on this section has broken down completely into a rural versus urban argument, the PAYE sector as opposed to the farmers.

There are workers in rural areas who pay PAYE.

We represent them.

I would remind Deputy Enright that he does not have to respond to any interjection.

There is far too much of this kind of argument and it does not help anyone. The build up of rivalries and divisions between the community is not good and it is a pity that debate on this section has gone along those lines. The House should consider the introduction of this tax. Originally there was a 2 per cent levy proposed on agricultural produce but everyone will agree this led to an enormous amount of confrontation between the farming community and the then Government. There was a watering down of the levy, there was further discussions and eventually it was accepted that it was unwise to introduce the levy. There was then the suggestion of a resource tax but there was a strong farmer opposition to it. Some people have paid the tax but others have not done so.

It is not generally recognised that the agricultural community is going through the most difficult period they have ever experienced and there should be no mistake about that. I an very concerned at what has happened. Years ago people talked about raffling calves and playing games of cards for calves. The situation in rural Ireland at the moment is that farmers are putting their farms up for raffle. They cannot afford to purchase land. They are afraid to go near a bank, the ACC or any other financial institution because they will be asked to pay interest rates of 20 per cent on any money they borrow. People do not realise the seriousness of the situation. A farmer will not put his farm up for raffle if he thinks he can sell it on the market but this is happening in my constituency. It is a sad situation for Irishmen that this should happen in our country.

The introduction of the resource tax was a monumental blunder. Personally I have reservations about the refunding of tax but because of the initial blunder in introducing the tax and the serious situation of Irish agriculture I am in favour of repaying the resource tax to farmers who have paid it. Farmers have been hit by our inflation rate which has been running at 18 per cent to 21 per cent for the past few years. Farmers were granted increases by Brussels after long delays but the rate of inflation was much higher and they were not able to bridge the gap.

Deputy De Rossa mentioned that a £70 valuation means a farm of 100 acres. I accept that valuations vary and perhaps that is the case in some areas, but there are other areas in which a £70 valuation means that one could have a 65-acre farm. There has been a lot of talk about farmers speculating in land purchases. I do not doubt that some farmers did speculate, but let it be fully understood that so many farmers invested in the building of livestock units, slatted sheds, silage pits and so on, at 10 or 12 per cent and are now paying 20 per cent, that they will never get out of the debts they have incurred because of the ever spiralling interest rates. It was a monumental blunder to bring in resource tax. At this stage it should be repaid and the memory forgotten.

These arguments are useless.

If Deputies who are for or against continue to address each other in quasi-challenging, sometimes provocative, other times coaxing terms, we are going to have arguments for a longer time than we would wish. I ask Deputies to address the Chair.

These arguments contribute nothing to getting tax equity. We are told by Deputy Bruton, Deputy Enright and Deputy Dukes that this is not a suitable form of taxation. I never heard farmers say that any kind of taxation was suitable for them. They claim that income tax, notional taxation or resource tax is suitable for PAYE workers but not for them. To say that the resource tax was a mixture of taxes, one envisaged by the NESC and the other one based on Griffith valuations made over 100 years ago, is not helpful. For better or worse both Governments agreed with resource taxation and hundreds of thousands of pounds were collected. Now they say this was a mistake and they want to hand the money back to wealthy farmers who merely paid £10 per week in taxation for one year. That is typical Irish logic. In any other country they would go after tax evaders and make them pay the same as everybody else. The £700,000 is merely a drop in the ocean in terms of the whole financial bill but it will have a very bad psychological effect on the PAYE sector. Giving back this money is like bringing coals to Newcastle or throwing apples into an orchard.

The arguments I heard today have reinforced my determination to oppose the section. People outside the House will despair of parliamentary democracy when they hear that £700,000 is going to be handed back to wealthy farmers. The people who are putting that idea forward should be ashamed of themselves. The dire consequences of selling farms has also been mentioned. What happened to the millions of people who left this country in the past 50 or 60 years who had no farms to sell? The worst that can happen to a farmer who sells his farm is that he will pocket £200,000 or £300,000. Very few working people have that sort of money and it would represent E1 Dorado to them. Farmers cannot be cushioned for ever more. They must work in a productive, efficient way and help to solve the problems we all face.

I regret that Deputy Kemmy has felt obliged to make the kind of remarks he has just made. I am not convinced that he sees the situation in such black and white terms. His last few remarks were nonsensical. Any farmer today who is raffling or selling his farm in order to get £200,000 is doing so because he has a bank manager on his back looking for something close to that amount. Otherwise he would not be interested in disposing of his farm.

In 1979 the then Fianna Fáil Government were looking at means which could be applied in order to increase taxation from the farming community. I would be extremely happy if I thought that this year, next year or in three or four years' time we could have a situation where we could take in much more income tax from farmers. That would make me very happy because to do that we would have to be making a lot more money than we are today. As Deputy Bruton has pointed out, we take the view that the most appropriate form of taxation is income tax. If you make an income you pay tax and if you do not make an income you do not pay tax. I am sure Deputy Kemmy would agree with that——

The Deputy is not saying that too loudly.

I am saying it now and I do not have to say it any louder for Deputy Kemmy to hear me. This is not the only place I have said it. In 1979 we had what I would call an almost desperate effort by the Government to find ways of extracting money from the farming community. They came up with several stratagems, one of which was a 2 per cent tax on farm output. That was supposed to extract, I forget how many millions of pounds, from the farming community, but was subsequently found to be illegal because it infringed EEC rules and therefore could not be applied. We then had a resource tax and disease eradication levies. These were all new taxes designed to extract money from the farming community when, in fact, we had started by then on the biggest decline in farm incomes for decades. In 1979 we had a very substantial drop in real farm incomes. In 1980 we had a further drop, in 1981 a further small drop, and here we are with a series of measures designed to extract income tax as a matter of principle from farmers when not alone are real money incomes going down but are falling very fast.

It all brings us back to the original point of Deputy Kemmy: it is time we had a proper rational system for dealing with the taxation of incomes of people who make their living from farming lands. We have not found such a system, although there are numerous ways to do it. There are large numbers of farmers paying income tax who are assessed on the basis of accounts they send to the Revenue Commissioners. The sooner we devise a system which will make that apply to everybody the better it will be for everybody, because then we will know the basis of the tax and the rules.

A large number of small enterprises in industry have problems. There are people today who pay accountants £300 or £400 a year to demonstrate to the Revenue Commissioners that their level of income does not give rise to taxation liability. I do not see much sense in that but when you go to the trouble of paying accountants to demonstrate you are not liable to tax, you must be critical. PAYE workers have the firms by whom they are employed to pay accountants to do that job and accordingly we know the incomes they are earning. If there are some people who have incomes which do not render them liable to tax, so be it.

This is one of a series of totally inappropriate measures designed to get more taxation revenue from farmers whose incomes at the moment are dropping faster all the time.

The Chair would like the Deputies to appreciate that notwithstanding their expressed concern and resolve, consideration of this section is now assuming proportions which are making an inordinate demand on a Committee Stage debate. We are now on section 17 of a Bill which has 96 sections, all of which must be passed by 7 p.m.

I will not keep you until 7 o'clock. However, there are a few things that need to be said regarding the refund of this £700,000 that we in Fine Gael agreed to refund if elected last June. In fairness, we must say that this resource tax was imposed in 1979 to be collected from farmers who were in that year suffering a 25 per cent fall in incomes. We in the farming community at that time objected totally to that tax, for two reasons.

Neither I nor any other farmer objects to paying a fair share of taxation provided it leaves us a little in order to survive and to rear our families. In 1979 the Minister for Finance was not the present Minister, who became Minister for Agriculture a short time afterwards and who took steps to ensure that farmers would pay this tax, and the refund of that tax is only a token of the damage done by that Government to the largest industry in the state. I can assure the House that if that measure had been continued, if the farming community were to be assaulted with taxes such as that at a time when incomes dropped in three years by 52 per cent in real terms, farmers would not now be on the slippery slopes but would have reached rock bottom. Not later than yesterday we heard that 600 companies are looking for help. What about all the farmers who are looking for help? Every two miles of roadside in the country has "for sale" signs because farmers are selling bits of land to keep their heads above water in the coming few months. For these reasons I am delighted that the Minister has agreed to this concession. It was a mistake in the first place to have proposed such a tax on farmers at a time when there was a serious drop in their real incomes.

Will the Deputy benefit from the adoption of the section?

I do not think that is relevant to the amendment.

It is a mere question.

I would not benefit to the extent of the money that was put into the sugar factory where Deputy Sherlock worked.

The Deputy would be making a lot of money if he benefited to that extent.

If Members are in earnest they will get off the farmers' backs. Unless the farming community are allowed to prosper in the years to come we will be here saying good bye to many more companies and many more jobs. It is a pity that more people do not realise the seriousness of the situation. I am delighted that it is a Minister of the Government who proposed this tax in the first place who has decided to return it to the farmers.

As the Chair has said, we have nearly 100 sections in the Bill and, although all Deputies have the right to pursue amendments and make cases for them for them, I must maintain my stand on the section.

This is one section which I must oppose. The basic issue is one of relativity in terms of actual payments. According to figures, only one in every three farmers pays tax anyway. I am not sure what the remaining two-thirds are up to paying accountants to show that they are not liable. Only one third were liable last year, no matter what their incomes were.

Progress reported; Committee to sit again.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.