Deputy Dowling was in possession but he is not here.
Farm Tax Bill, 1985: Committee Stage (Resumed)
Question again proposed: "That section 2, as amended, stand part of the Bill".
May I say a word?
If there is nobody offering on my right, the Deputy may. Deputy Seán Byrne.
I bow to the senior Member of the House.
I might explain to Deputy Flanagan that I went over there because is was a Deputy on those benches who reported progress.
I fully understand. I shall not detain the House very long. I have been most anxious to say a word with specific reference to this section dealing with the adjusted acreage. I want the Minister to accept what I have to say in the most cordial and friendly spirit. I want to place on record what I think of the adjusted acreage having regard to my long connection with the farming community as a valuer and as somebody who has been closely involved in the letting of land and the drawing up of conacre contracts etc. As a Fellow of the Institute of Valuers, I have often expressed an opinion on the quality of land, be that good land, medium type land, bogland, commonage, whether it be the subject of collop grazing or whatever. I have given evidence in the Circuit Court on numerous occasions in relation to the quality of land. The whole question of farm tax is pivotal on section 2 dealing with the adjusted acreage. That is why I am extremely perturbed about this. In relation to land acreage there is no such thing as a permanent acre of good land, a permanent acre of poor quality land, or of medium type land, because from year to year it is dependent, first, on locality and, second, on weather. There may be a year in which there will be a very heavy rainfall from January right through to the middle of April resulting in land, which the year before, a dry year, was of reasonably good quality, being completely watelogged. Will there be a further adjustment on land in every bad year, in every wet year? If the Minister would recall the disastrous year we had in 1947——
I do not recall it. I was not taking much notice at that stage.
The last three years were disastrous, too.
The Minister has very limited experience.
You do not remember much about 1947, either.
I know the Minister is extremely youthful and may he preserve his youth and vigour in the same vigour and glory in which he now possesses it.
(Interruptions.)
During the bad year of 1947 I raised matters in this House in relation to deplorable land conditions, acreage and so on. My association with farmers, both big and small, has been close. My knowledge of land is reasonable. Having read section 2, I am at a loss to know how the tax will be based on adjusted acreages. Where will we find an acre of land with the highest productive capacity in the country on which to base all other acreages? I have spent a great part of my life dealing with farmers, setting their land, surveying their land, valuing their land, making representations to the Valuation Office on their behalf and appearing for them in a variety of courts. Nobody in the House has a closer connection with the farming community or a greater knowledge of the difficulties that will arise on this section. Yesterday, when we were dealing with the Valuation Bill, I referred to appeals being decided by the Circuit Court when relating to certain valuations. I have always admired the knowledge of Circuit Court judges and the helpfulness of senior and junior counsel in relation to matters of this kind. They sometimes astonish valuers with the extent of their knowledge. Knowledge gained from theory is good, but knowledge gained from experience is better. Is this Land Tax Bill the product of theory rather than of practice? If it is the product of theory it will run into serious difficulties.
What will be the position in relation to the adjustment of common grazing and the adjustment of other forms of land subject to conacre agreements? What will be the adjustment in relation to certain meadowing and lands which are used for grazing and for hay? Is the Minister serious in thinking that the vast majority of farmers will be satisfied with an adjustment other than an adjustment upon which they decide? The best judge of the quality of land is the owner, the local valuer or the local estate agent. There will be a great conflict of opinion between the owner of the land who knows its productive capacity and the commissioner in charge of appeals. To base a tax on adjusted acreages is unrealistic. I am giving the House the benefit of my experience as a valuer who has served a great percentage of farmers in the midlands. Every same person will agree that farmers must be taxed but that that tax should be based on their income.
Hear, hear.
I am seriously worried because there is a close relationship between the adjusted acre and the property tax already in operation. When the property tax was imposed it was supposed to yield £13 million, and £1 million was collected at a cost of £500,000. How much will this tax cost in administration? Very little will be collected by the time all the concessions are granted and allowances are made. Placing the yield based on adjusted acreages on one side and the cost of administration, appeals and dissatisfaction resulting from what the farmer will think is an unfavourable decision in relation to his appeal on the other, where are we going to go in relation to this whole problem?
Is all this exercise worth what it is likely to yield when there is no goodwill from a large section of the farmers? When it comes to imposing tax on farmers I would prefer that everyone would sit around a table and agree on a form of taxation based on the income of the farmer rather than on his property that may be yielding a smaller financial return to him based on atmospheric conditions from year to year.
I have made prophesies which have come to pass although I do not style myself as a prophet of accuracy. Nevertheless, I have not always been wrong. I am convinced that some years from now the exercise we are going through here in relation to this farm tax will be forgotten. First and foremost, I cannot see the farmers paying. Secondly, I cannot see the adjusted acreage working. Thirdly, I cannot see the landowners being satisfied with any result from the appeals tribunal or the commissioner in charge of appeals. In the light of all this, when we are not taking the ability of the farmer to pay into consideration, we are on a very lame and limping exercise. We must consider other aspects of the farmer's income apart entirely from the financial return and profit.
The Minister for Finance will agree with me on this. No farmer in Ireland ever aspired to being a millionaire. He never had that ambition. He could not have it because the ways and means were never in his way, but every farmer had one ambition which was to leave the land at the harvest better off than when he entered the land in the spring. That is what I have been preaching in this House for the greater part of 40 years. In relation to farm production, income and taxes unless a farmer can leave the land in the autumn a better off man and somehow richer than when he entered the land in the spring, his whole year's work is useless and wasteful.
That is why I am sorry that there has not been a greater degree of co-operation between all farmer's organisations, all farmers big and small, the Revenue Commissioners and the Department of Finance in this matter. No system of farm tax will work unless everybody is in step. You must have willing farmers, willing payers, particularly those who are going to pay based on the adjusted acreage because the adjusted acreage is the kernel of the matter. Unless the willing farmer feels that by the adjusting of his acreage he will be able to contribute as generously as his financial means and income will permit, this is a useless exercise. These are important considerations. As well as the adjusted acreage you must take into consideration what profit the farmer has made. There is no point in adjusting a man's acreage if he has lost money during that year. Whether his acreage is adjusted or not, unless he can pay and has made some profit the whole exercise is useless.
I do not know where the idea of this adjusted acreage came from. I had farmers with me years ago, particularly when I was representing them in their business, and they would describe various parts of farms which looked well, which looked good and in the opinion of representatives of the Commissioner of Valuation was good land, but when a crop was planted on it even when it was manured and fertilised to the highest possible degree the farmer would not get a justifiable return from it. Therefore, the best qualified officer of the Commissioners of Valuation or the Department of Finance may judge an acre of land and he can be as far out in his judgement as could be possible. You will not judge the yield or return from an acre of land by looking at it in the spring or in the summer. The way to judge an acre of land to see what profit that acre made is not by appearance but by pounds and pence. Farmers are extremely commonsense people. I have yet to meet a foolish farmer when it comes to the quality of his land. He is walking it, he is manuring it, he is judging it, he is asking his neighbours about it. He is having a second opinion, and after all this he has the opinion of his valuer.
I am very worried about this section. The whole principle of this farm tax has been a cause of very great worry to me because I am afraid that there is what I can only describe even at the root of the adjusted acreage as a socialist element in which people who have no property, who own nothing and have never aspired to own anything, are anxious to put the political gun, so to speak, to the heads of those who have something, those who work hard and who own property or have property handed down from their fathers, grandfathers and greatgrandfathers. There is a certain degree of jealousy and that is rather grave when it comes to people who never had property or aspired to have property——
I do not think that jealousy of the farmers on the part of other people is in section 2.
You make take it that nothing will raise greater jealousy than the adjustment of the acreage because if one farmer sees certain adjustments carried out to his neighbour's farm that have not been carried out to his farm this will cause a certain amount of disagreement.
Hear, hear. It will be adjusted jealously.
I regret very much that this legislation is coming before the House. I am also satisfied that there will be keen disappointment at the financial yield from this measure.
The Deputy should move over to this side.
There is commonsense on this side of the House too. The abundance of intelligence does not always rest with Fianna Fáil. It rests with people who have been closely connected with the financial circumstances of those who will be asked to pay. My worry is in relation to the adjustment of acreage, on which basis all payments will be made. There is much anxiety among my farming constituents with whom I have discussed this matter and whose opinion I value, particularly the younger farmers connected with Macra na Feirme, the IFA and the ICMSA. My views are based on their opinions backed up by my long experience as a member of the Institute of Valuers. I can see endless difficulties arising.
Before we get down to the whole question of the adjustment of acreages let us examine what the difficulties are likely to be before we cause serious problems for many farmers. I wish the Minister for Finance well in his efforts to have a taxation system which will appear to be fair, in which those on the land, in the factory, on the shop floor or in business will all contribute to the provision of services. Any intelligent Minister for Finance — and our Minister certainly possesses an abundance of intelligence — has the support of all the people in his efforts to raise funds.
That is too much.
I stand by the Minister in any effort he makes to bring in the necessary funds to administer the affairs of the country but I would like to see commonsense and intelligent methods used in the raising of funds. I am putting forward my views today as one who has devoted the greatest years of his life to working in a professional capacity with the farming community, advising them as a valuer. I am sorry this whole question has arisen because I am of the opinion that when all is said and done and this Bill is passed, the yield will not be worth the amount of money spent on administering it. I am judging that by the record of the property tax. I spoke against that measure and was never in favour of it. I am not in favour of taxing people for no other reason than that they own property. I am not a socialist and have never subscribed to socialist ideologies. I am a believer in private enterprise and the right of ownership. I believe in the right of the people of Ireland to hold the land of Ireland from God alone who gave it.
For that reason I would urge the Minister to consider very carefully the question of adjusted acreage and to enter into close consultation with valuers and farmers.
Whatever system is adopted in relation to the adjustment of acreage, every aspect should be taken into consideration, including reports of agriculture advisers and valuers but above all the opinion of the farmer himself. There is no better judge of land than the farmer. A farmer may complete a form and tell the Minister that the acreage must be adjusted in one way or another. It must be remembered that no farmer wants to do the State out of any money. My experience is that every farmer wants to keep his head above water and pay his way. There is no better spender than the farmer if he has the money. There is nobody quicker to pay. The farmer loves to pay if he has the money to do so. The success of this tax depends on the satisfactory adjustment of acreage. Speaking not as a politician but as an experienced valuer, I believe this adjustment of acreage will not work. I do not think it is feasible. For the Minister's sake I hope it will work. Every farmer is anxious to co-operate. We would all like to see this measure working but it will be very difficult because of the vast difference in the quality of land. There are mountainous areas and areas which have drainage problems, while gravel and sand form a substratum in other areas. We are dependent on atmospheric conditions which affect the yield from the land and the return at the end of the year.
I offer those views to the Minister as one who has valued nearly every area of land in the midlands and dealt professionally with the majority of farmers there. I wish the Minister well in this measure and hope that the machinery which will be set up to deal with the adjustment of acreage will be such as to leave no doubt in the minds of farmers that they are getting justice and fair play. If this is not the case there will be a lack of co-operation by farmers. The goodwill of the owner is necessary to adjust the acreage in a satisfactory manner, otherwise it is a wasteful exercise. If he gets a square deal nobody will be quicker to pay than the farmer, bearing in mind that his land must be yielding him a profit.
I agree with Deputy Flanagan that the task of the adjusters will be difficult. I hope that the Government will not send out the same team which carried out the review for the new disadvantaged areas scheme as some of them got lost in the mountains and the scheme degenerated into a sorry mess. I advise the Minister to leave those people at home or to send them to an eye specialist. In my constituency, the team were stuck in the mist on the top of the Galtee mountains on the Waterford and Cork sides. They did not come to Tipperary which has similar type land. I hope the Minister will not send these adjusters around rural areas with suede shoes to carry out this type of review. This is a very serious matter, our land was fought for dearly and Irish people love their land. The Minister should forget the Civil Service gobbledegook regarding adjusted acres.
Over the next two years a lot of money will be spent on civil servants running around the country drawing fat salaries. There will probably also be millions spent in taking cases to the Supreme Court. After all that, we will probably have to debate the matter here again unless there is a change of Government. The Government have availed of the grants available for farmers from the EC which would have helped to give them a decent living. Everybody knows that over the last two years the farming community have taken a steep reduction in their income——
The Deputy supported a measure to take a sum of £100 million from farmers——
We pay tax the same as any other section of the community and the Minister will have an opportunity to speak.
(Interruptions.)
The Deputy is a fraud.
I do not know if you heard what the Minister said. Is it in order for him to allege that a Member who was speaking is a fraud?
I did not hear the remark.
People have been asked to withdraw allegations regarding lies or whatever and this is more serious.
I did not hear him.
Your hearing must be defective. Ask the Minister if he made the remark.
I said to the Deputy that his party was a fraud. To the extent that it is a personal reflection on the Deputy I withdraw it but to the extent that it expresses my amazement that the party which looked in 1979 for the equivalent today of £200 million in taxation, to oppose this Bill is a fraudulent presentation——
(Interruptions.)
That is a measure of the Minister's standing.
The farmers have been treated disgracefully over the last few years——
The Deputy must stay on section 2.
I see that at least one Member of the Labour Party had the courage to come in here today.
(Interruptions.)
There is a scheme to encourage farmers to transfer land. If a farmer with 100 acres transfers 50 acres to his son will they be treated separately in regard to land tax? Sometimes land is fragmented, there may be 30 acres at the farm holding and perhaps 60 acres down the road. Will the adjusters value the 60 acres in the same way as the 30 acres? Although the land in both areas may be of the same quality, the same use cannot be made of both areas. I hope commonsense will prevail and that the adjusters will realise that the land away from the farm holding cannot be utilised as well as that on the holding. Land has been fragmented down through the years and it is not the fault of the farmer if it is spread around the parish.
The section does not refer to the age of a farmer and whether he can afford to develop his farm. Does the Minister realise that one-third of our farmers are over 55 years of age and that one-third of them are single? The recession has prevented quite a large proportion of farmers from developing their holdings and they have also had to contend with the uncertainty regarding the super-levy. How could any farmer develop in these circumstances? The Government should have helped farmers to develop their own industry. They are now supposed to pay a flat tax, irrespective of whether they can afford it. In the 1983 budget the Minister for Finance dropped the farm grants without warning and the type of carry on during the last two and a half years did not give farmers a chance to develop their holdings. Regardless of their age or the quality of land, they had no hope. The milk, beef, beet and grain businesses are all in trouble. The Government are also in trouble because they do not know what they are doing from day-to-day on farm policy.
Please keep to section 2.
I appeal to the Minister to consider the points I made because we pay taxes like everybody else and we will not have two types of tax imposed on the farming community.
I agree with the speakers who said that the nub of this issue is the adjustment of acres. How many adjusters — for want of a better word — will be employed? I understand that 100 adjusters will be transferred from the Land Commission and, if a further 100 are to be taken on under what scheme will they be employed? What are the necessary qualifications for adjusters? This is of particular importance and it should be spelt out clearly. Will they have a degree in soil analysis or in engineering? What will be the nature of the training that will qualify them to carry out this massive undertaking? How long is it envisaged that a national adjustment of acreage will take? When will it commence and finish? Is it the Minister's intention to carry out a partial adjustment and impose a tax on those people while those whose land has not been adjusted will escape for some period? Can that be regarded as equity?
Will the national adjustment be carried out, as I believe it should, on an acre by acre basis? Will the publication by An Foras Talúntais, Soil Associations of Ireland, 1980, be used as a guide? Will the officials in An Foras Talúntais who carried out a square inch by square inch survey of the soils of Ireland be consulted and their results taken into account? Is it intended, following a national adjustment, that a period be set aside after which a review will be carried out of the national adjustment?
We have spent some time on this section and I will say a word or two about that before I finish. However, I intend to deal with the issues that have been raised. It has been suggested by Deputy Noonan that the provision is unconstitutional. It is not.
(Limerick West): I said that it will be proved to be unconstitutional.
I can tell the Deputy for free that he is wrong in thinking that it will be proved that these provisions are unconstitutional.
(Limerick West): So the Minister is now acting as a Supreme Court judge.
Does the Minister control the Judiciary?
My advice is to the effect that there is no constitutional difficulty with the section. The Deputy, therefore, is going a bit far, to say the least of it, in alleging to know that the provisions will be proved unconstitutional.
I will not take any more time than I need to reply to these points but I am not going to take any less time than is required to do so. Deputies opposite have been howling since this morning about how little time we have to debate the Bill although we have had a lot of Second Stage speeches that would more properly have been made last week.
(Limerick West): On a point of order——
If this is a real point of order I am a monkey's uncle.
(Limerick West): I should like to bring to the notice of the Chair the fact that the amount of time for Second Stage was restricted. A number of Deputies from both sides of the House were unable to contribute.
The arrangements for this business, Second Stage, Committee and remaining Stages, were agreed with the Whips.
(Limerick West): Bulldozed by the Government.
If Deputies opposite do not like the arrangements, the person they can make their complaint to is the Whip of their party. Deputy O'Kennedy asked if it would be the case that adjustment of acres would be carried out only on the basis of visits to farms by the people involved in making the adjustments. The answer to that is "yes" except in cases where those persons are obstructed in carrying out their duties. That is dealt with later in the Bill.
That is not so.
The intention of the Bill is that all these adjustments will be carried out on the basis of information——
By inspection.
——gathered by adjusters visiting the farms and examining them in the light of the criteria and the various considerations set out in section 2.
The Minister will not have that finished by the year 3000 if that is the case.
I will come to that later but if Deputy O'Kennedy continues to make such remarks I will not be finished in the House by the year 2000. We will not discuss a lot more of the Bill — although I am anxious to do so — if he continues in this manner. I intend to reply to the points made but I do not guarantee that, if Deputy O'Kennedy makes the odd provocative remark during the course of my remarks, I will not answer him maybe equally provocatively.
Deputy McCreevy asked if this concept of the adjustment of acres was not something like a spot the ball competition. He wondered about the concept of the most productive acre and where this is to be found. We have a fairly clear idea of the most productive acre, the standard against which other acres will be assessed. It is not just one specific acre, it is a judgment of the most productive acres in the country. I intend to return to that matter in a few moments. Deputies opposite amazed me today because they acted as if they had not talked to a farmer although a couple of them are farmers. They spoke as if we had no knowledge whatever of soil types.
We talked to farmers today and they are in the House.
The Opposition spoke as if we had no knowledge of soil types here, of fertility levels of the soil or of its productive capacity although they know well that we have a substantial though inadequate, body of information — Deputy Byrne referred to some of it a moment ago — about soil types and classifications here. We are not starting from scratch.
Soil testing has been carried out in only six or seven counties.
It is absolutely naive to say that. Deputies, agricultural advisers, the Land Commission, farmers, An Foras Talúntais and ACOT have a wide body of knowledge about soil types, soil conditions and climate.
There are only six or seven official documents on soil tests.
We are not starting from scratch; we are not working in the dark. It will take some time to carry out a complete assessment and adjust the acreages. That, and the phased introduction of the tax, is provided for in other sections. We have set out clearly how we are going to go about this because it is clear that the job cannot be done overnight. However, it will be done evenly and by category. In later sections the Bill provides for the gradual adjustment of the thresholds until we get to the full system.
How long will it take?
It is reasonable to ask the Minister how long it will take?
We have provided that we will use 100 Land Commission inspectors and hire for a five year period about 100 further persons for this work. That period of five years will see the great bulk of the work carried out, if not it all.
What about the qualifications of those people?
Deputies opposite, if they think for a moment, will agree that it is the nature of the work that the more that is done the faster it is likely to go.
That is very vague.
A number of references were made to common sense during the debate and I am bound to say that some Members did not show a lot. Many Deputies seemed to have ignored their experience as farmers and dealings with them. Commonsense will be brought into play in the process of adjusting the acreages. It is a very commonsense type of thing to do. How do farmers intending to acquire a piece of land assess it? How do auctioneers and valuers base the information they give to their clients?
They certainly would not leave it to the Minister.
I will outline this and then the Deputies opposite will begin to see the commonsense behind it.
They use their own commonsense.
Deputy Flanagan had many positive things to say about the commonsense of the farming community.
(Limerick West): He always has.
They would normally base their assessment of how much they should pay for the land on the productive capacity of the land. Nobody will pay a high price for land if he knows it will not be very productive. Equally, nobody expects to be able to buy highly productive land for a very low price — unless he has an awful lot of luck on his side.
Is the Minister saying the farmer is going to adjust his own land?
What points do the farming community take into consideration? One of the things any sensible farmer would take into account in deciding whether to bid for a piece of land would be the range of uses to which it could be put for the purposes of agricultural production. If he sees a piece of land which could be used for a variety of enterprises he will tend to be more favourably disposed towards it than he would towards a piece of land which had a very restricted range of uses, unless he has a very restricted interest. Deputy O'Kennedy knows that in his constituency of North Tipperary and in my constituency of Kildare, where we tend to have a mix of enterprises on farms, the wider the potential range of uses of that land the more it will be appreciated by the farmer. Farmers are expert at taking into account or having regard to the range of uses to which the land can be put for the purposes of agricultural production.
They do not have to go around with the list of things mentioned in this Bill in their pockets.
I will go through all those items and relate them to every day experience so that the Deputies opposite can be brought to the view, which seems to be self-evident, that these are precisely——
Do not forget to answer our questions.
I will get around to the Deputies' questions. And if Deputy Byrne has a punnet of strawberries I will gladly take them from him. I will provide the cream when he agrees that he should vote for this Bill.
I will give the Minister the strawberries but——
The range of uses to which land can be put for the purpose of agricultural production is a concept which is immediately self-evident to any ordinary sensible farmer. I imagine there are a few of them in the Gallery who must be appalled at the meal the Deputies opposite are making of concepts farmers are used to living with day in and day out.
On a point of order——
That is not a point of order.
How do you know what he is trying to say?
I know by the set of his head.
It would be no harm if we brought those people in the House down here and asked their views because the Minister is misrepresenting them.
That is not a point of order.
If there is anybody up there who wants to come here he will have an opportunity to do so in September or October 1987.
We are on section 2.
The next thing many farmers would look at is the adequacy of means of access. Is there a road into it? Has it road frontage with access? What is the road like? Is it a boreen, a decent lane or a roadway?
If he does not get lost in the potholes.
This is a matter to which most farmers will pay a good deal of attention. We often hear farmers talk about a bit of land which comes on the market but they say it is not very covenient because a person has to go across another farmer's land to get to it or maybe there is a problem about a right of way from the nearest road. Means of access is something farmers would bear in mind when assessing the potential value to them of a specific piece of land. Deputy O'Kennedy mentioned a radio interview this morning with a spokeman from the IFA. He was quite rightly complaining——
Is this relevant?
Yes it is relevant to section 2. He was complaining about the difficulties and dangers arising from the fact that many people negligently leave old coke cans and things of that nature in fields. I am afraid I have not been able, offhand, to think of a way to take that factor into account in this Bill.
He said land contiguous to the main road and motorways: do not misrepresent him.
To extend that there is a difficulty of that kind in relation to any piece of land, it seems that that would be a factor which would potentially affect the range of uses to which it could be put. I cannot think of too many places in the country where that kind of location would unduly restrict the range of uses to which land can be put.
There are other matters which farmers will take into account. One of the first things they would want to know in assessing the potential value of land would be the nature and quality of the soil. Some Deputies opposite seem to have some difficulty in conceiving of a distinction between the nature and quality of soil. I am no agronomist, although I spent many years working for farmers, but in my view it is not all that difficult to distinguish between the nature of soil and the quality of soil.
The Minister is making up for it; he is not working for them now.
It is perfectly easy to conceive of the areas of peaty soil, which is one of the broad categories laymen like myself think of where there might be a difference of quality, and one of them might produce a better crop than the other. Nobody is going to tell me that the whole area of the King's Bog to the south of my house in Kildare is of homogeneous quality. It is all peaty land but nobody can convince me it is all of the same quality. Far from it. There is no new departure in distinguishing between the nature and the quality of soil.
I hate interrupting the Minister, but may I ask him a question?
The Deputy does not hate interrupting me.
Would the Minister deal with this matter not in terms of what his opinion would be but what the law would require? His opinion is not the issue on which the court will decide. We are getting the Minister's opinion which is of no consequence.
I am not going to bandy words with Deputy O'Kennedy as to what the consequence of my opinion is as against his opinion. What I am setting out to do is to demonstrate that the criteria in this Bill for the adjustment of acreages are not the new mysterious innovations Fianna Fáil Deputies allege, but that they are matters the ordinary sensible farmer will take into account when judging the potential value of a piece of land and saying that it is a proper and adequate basis on which to base legislation which sets out to compare one acre with another.
It is not the farmers who will be doing the adjusting.
Deputy O'Kennedy, please.
Now we come to the location and climate of the farm. Again, the Deputies opposite seem to feel that this is something that one could not very easily seize. I do not know why they should have a great deal of difficulty with that. Location is self-evident, as is climate. We have an abundance of information from the meteorological service about the climate in different parts of the country. We have an abundance of information about levels of rainfall and about sunshine, and that is all climate. Above all, we have an abundance of information about location. They are two factors which any farmer will tell you can have a substantial effect on the potential value of land. It ranges across a whole spectrum of considerations. There are some pieces of land which are near the coast and are particularly good for, let us say, potato growing because they have sandy soil. They have a particular advantage there. If they are near the coast in the south west corner where on average — and this has been the case for many generations — there is more sunshine and rather less rainfall than we have in the rest of the country——
That is the south-east that the Minister is talking about.
In the sunny south-east you get better crops of strawberries.
We have agreement at last.
——than you will in the south of my county, but the differences are not all that large.
Would the Deputies let the Minister continue?
Let the Minister do all the adjusting. He could do a tour of the nation and adjust every acre.
Those are questions of soil and climate. What I am demonstrating is that all of these things — and I am going to go through them one by one — are relevant to an assessment of the productive potential of land which is the basis for this tax.
The Minister is getting further away from the punnet of strawberries.
I am not going to respond to that. The Deputy knows very well what I have in mind.
There is no response.
I was nearer to the Queen that evening than the Deputy was. I think he might be a little jealous about that.
I was jealous, but I got over it since.
I come to section 2 (2) (iii) on the question of whether land is flat or sloping and if it is sloping, the direction and the degree of the slope. You do not have to measure every inch of the land that is sloping. What we must take account of is that the topography of the land is a factor that can have a fairly substantial bearing on the productive capacity of the land. Nobody in this House or outside it could dispute the fact that for a given quality of land you will get a better crop on a south facing slope than on a north facing one. There is no doubt about that. That is a perfectly valid criterion, consideration or factor to put into one's judgment of the productive capacity of the land.
The Minister is on the slippery slope.
If the Deputy is reduced to that kind of remark for an argument on the Bill, he has given up. I am not going to sit down, a Leas-Cheann Comhairle, because I intend to pursue the rest of section 2.
What if the Minister were on the northern slopes?
Whether the land is sheltered and whether the land is overlooked.
The Minister did not deal with the degree of the slope.
I have said that we do not have to measure every inch and the degree of slope of every square yard of the land. It is obviously going to be a factor as to whether the slope, in general, on the land is one in 20 against one in ten.
Will it have to be measured?
That, as Deputy O'Kennedy well knows, has a very substantial effect on the degree to which you can use machinery to till the land or harvest the crops.
Would it have to be measured?
It would not have to be measured inch by inch.
Just throw an eye over it? That is interesting.
Whether the land is sheltered and whether the land is overlooked by hills or mountains, Deputy O'Kennedy particularly should know that. There is quite a lot of hilly country in his constituency. I shall leave the Leas-Cheann Comhairle out of it because I know he needs no instruction on this matter. Deputy O'Kennedy may. The Deputy knows perfectly well——
(Interruptions.)
——that there are some parts of his own constituency, just to focus on that for the moment, and particular valleys there which are regarded as being, on the whole, very cold. There are others that are regarded as being fairly sheltered and others that are regarded as being what people down in north Tiperary call fairly snug, that is, well sheltered valleys facing south where you get, on the whole, a better microclimate than you will in a valley surrounded by mountains facing north or west.
That is what the Minister had in mind?
That is the kind of thing that we have in mind here. That is something which again enters into account in deciding on the potential productivity of the land. There is more to it than that.
How far from a mountain would you to be overlooked by it?
The Minister is trying to answer.
There is more to it than that, a good deal more to it. The degree to which land is sheltered or overlooked by mountains, as any half-way developed climatologist will tell you at the drop of a hat, has a substantial bearing on the degree of productivity. The nearness of land to mountain will also have a substantial bearing on the exposure of the land to sunshine.
But at what distance to the mountain do you stop being overlooked?
If you are on an east facing slope you are in a different position for a given quality of land than you are on a west facing slope, particularly in this country.
Would the Minister tell us what "overlooked" means? It is the Minister's legislation. No one knows what this means.
We then come to No. (v).
The Minister is skipping.
I am not skipping at all. I am pointing out, and I cannot be gainsaid on this, that all the factors mentioned here are ones that the ordinary, down to earth, commonsense farmer will take into account in assessing the value of land to him.
As regards the structure of the agricultural holdings of which the land forms part, Deputies Treacy and Byrne raised the question of what happens if a farmer has very good land bordering on a main road and more of his land is down a boreen some distance away. That is clearly a factor that affects the way in which he can use the land and the return that he will get from it. That is why we make it a consideration in the adjustment to take account of the structure of the land holding of which the land forms part. It is clear that if you have 60 acres in one block it is far more conveniently farmed than if you have 60 acres in two, or indeed, three blocks. You do not have to go very far, even in this country, to find that kind of situation.
Wonder of wonders, we are learning.
On the question of the natural drainage of the land and any arterial local or other drainage affecting the land and provided by a State authority or a local authority, again, natural drainage is a factor that is very much in the forefront of farmers' minds in many parts of the country in assessing the value of land. We heard Deputy Enright speaking about the problems encountered in Laois-Offaly and Deputy Treacy mentioned the problems encountered along the banks of the Dunkellin river. The same applies to the Owenmore river and the same in the Mulcaire catchment area. The same applies over wide areas of the country. In my own constituency, the Barrow causes problems over some of its length. The fact that land is subject to that kind of flooding from time to time during the year is obviously a factor that affects the assessment of the potential value of the land. That is why it is included here as one of the criteria. I was rather surprised that the Deputies who raised these points did not refer at all to the criteria mentioned here.
We went down through them, one after the other.
The adequacy of the water supply.
On a point of order, we went down through them, one after the other.
Deputies on the other side of the House have not got their heads together at all on this issue, nor have they even tried to look at these criteria. It seems to me that the discussion that we should be having is this — are these criteria sufficient to take account of all the concerns that the Deputies on the other side of the House have raised in relation to assessing the potential capacity of land? I believe that they are, but I am open to persuasion. I notice that none of the Deputies on the far side has raised anything so far that is not covered in the criteria that we have set out here in section 2.
The adequacy of water supply to the land is obviously a factor that will count and I do not think that needs any discussion whatever. I have an amendment in to delete the word "natural". The accessibility of the land to, and its capacity to support, farm machinery and farm stock is a matter that is of considerable concern to a farmer who is assessing the potential of land. We know of the difficulties of farmers in many parts of the country who cannot take their stock off the land during winter. We have seen the damage that can be done to land by using machinery in excessively wet conditions and we have seen the damage that can be done by using machinery on it at the wrong time of the year. The susceptibility of land to that kind of damage is something farmers take into account when looking at land and coming to a conclusion about its value to them.
Reference was made by a number of Deputies to the question of variations in climatic conditions during the year and from year to year. Of course one cannot forecast or take specific account for each acre of land of every drop of rain that will fall on it in any one year. Where we can take account — and there is provision elsewhere in the Bill for doing this — of any differing effects from one year to another of climatic conditions is by allowing the differential effect of those changes from one year to another to be brought to bear on the rate at which the tax is charged. In section 9 we have provided that changes in farm income will be the base on which we assess changes in the rate of farm tax. That does not take away from the fact that once the adjustment is done on the basis of the criteria we have here we will have built up on the basis of commonsense a picture of the productive potential of land.
Deputy O'Dea seemed to take issue with the notion that we are bringing assumptions into the legislation. I refer him to section 2 (2) (b) and (c). Section 2(2) (b) states:
It shall be assumed that the land has been, is being and will continue to be, farmed, and that the land and the business of farming the land has been, is being, and will continue to be, managed reasonably and reasonably efficiently.
That means that in assessing land we are looking at an average level of management expertise in deciding what way to adjust the acres. We are not going to each farm to look in detail at each farmer's personal capacity for managing the land in order to decide on the adjustment. Adopting that approach which takes some concept of the average as a base gives an advantage to those who are better than average and it will provide a spur to those who are less good than average in relation to the management of their land. Section 2(2) (c) deals with the question of investment in the land. Deputy Dowling asked if the provision in relation to improvements was fair. I suggest it is fair because we are working on the basis that the level of investment on the land will be reasonable for land generally. In other words, if a high level of investment has been put into the land that will not in itself be a factor that will raise the assessment of the number of adjusted acres. We set out in this section the factors taken into account under the heading of investment.
Much play was made of the time of year at which the assessment would be done. A number of colleagues said that in the springtime a piece of land might look very well but later in the year it could be subject to flooding. One could have land that looked well when at the beginning of the growth season but that would look less well, comparatively speaking, as the year went on. Of course that is a consideration that would have to be taken into account and it is one that would be picked up by the application of all of the criteria set out here.
I have to insist that in any case we are not doing a visual assessment of land. The people doing the assessment will be trained people. They will not be on a summer tour but will look at all the various characteristics and criteria and will judge the land on that basis. They will not just look over the ditch and say a field looks lovely——
They will walk the land?
——oblivious of the fact that in a few months the land might be under six inches of water, while taking no account of that fact. That is why we have built in all the references to natural drainage, climate, topography and so on.
Will they do a soil analysis?
They will take soil samples everywhere they go.
Acre by acre?
They will take soil samples on every farm to the extent required to be sure that they can judge the land on the basis of criteria set out here.
Will it be acre by acre?
It does not mean it will have to be done acre by acre. Most farmers are able to say where the variations in soil types occur on their own farms.
According to the Minister the farmers will have a major role to play.
We know that in some areas the soil quality and type in a 20-acre field will not vary from one end of the field to the next but in other localities one could find three different soil types in a field. That fact will have to be taken into account by the assessors as they do their job.
Who will take the decision?
That is why it is very important that the farmers co-operate. They can save a lot of trouble and argument just by telling the assessors of these factors.
Why not ask the farmers to do the work for the Minister?
The Minister is dodging the issue.
I am not dodging the issue.
I am asking if it will be done acre by acre.
The Deputy is trying to hide behind an issue. I will not raise it but I can assure him that if he wants to raise it I will take him on and we can have the argument.
I am asking if it will be done acre by acre.
It does not have to be acre by acre. That is the thrust of my response. There are areas where it will not be necessary to do every acre and there are other areas where it will be no necessary to do the work on a more concentrated basis. Given the criteria we have here, I expect that virtually every acre — I am not saying all of them — will come out at less than one adjusted acre. Obviously it will depend on the circumstances just how far one goes down the scale. However, it is almost a matter of definition that the vast majority of acres assessed will come out at less than one acre. It would be agreed generally that the best land in the country is in the south, in the Golden Vale and the Midleton area, and, for example, around Fota. It is not only a matter of the basic productive quality of the land. There is good land, too, in County Kildare but we are only trotting after some of the people in the south in that regard. There is the question also of climate in the south. It is a matter of observation that there is much less frost in that area than is the case elsewhere. Generally there is a longer growing season in the south than is the case in most of the rest of the country. Where there is that combination of climatic conditions and soil type one can extract the maximum from the land in terms of production. It is against that kind of criteria that we will be judging other land.
There will be cases in which the land will look extremely good in June or July but will not look so good at other times of the year. That factor, too, will be taken into account by the operation of the various factors enumerated in section 2.
So far as the question of subjectivity or objectivity is concerned in relation to these assessments, in what I admit was a somewhat disorderly interjection before lunch I asked Deputy Byrne if he had ever seen a subjective drain. Any drain I have ever seen has been very objective.
The Minister's problem is that he has not seen any drain.
The factors we are taking account of are very objective but inevitably an element of judgment must enter into this just as there is an element of judgment in many areas of our taxation system. That is the case, too, in assessing the value of assets for different purposes. It does not seem to me that there is anything especially wrong with applying an element of judgment so long as the judgments arrived at are informed judgments and so long as they take proper account of the criteria that this Parliament decides to set out.
What has changed the Minister's mind? Two years ago he rejected the judgment factor.
I will not be deflected by these kinds of interruptions. I am not contradicting what I said at any other stage. These are all matters that are capable of objective determination. Deputy O'Dea asked what weight would be given to each of these elements of judgment. That question is somewhat beside the point. Even from his experience of farmland in the East Limerick constituency, Deputy O'Dea will find that some of the factors listed would be of very little relevance to some pieces of land while there are others that would be of very considerable importance. Therefore, any judgment made would be on the basis of a combination of those of the criteria set out that are relevant in the case of any piece of land. It is not possible, then, to provide that in the event of slope, for instance, one allocates a minimum of five marks or ten marks or whatever the Deputy had in mind.
I was asking whether that was what the Minister had in mind.
It is not what I had in mind because some of these factors would not be relevant. It is not a question of scoring a piece of land against a board of ten drawn on the basis of these criteria.
That is the Minister's opinion.
It is a question of making a judgment against these criteria of the whole complex of factors that make up the productive capacity of land.
Deputy Flanagan reminded us that there is no such thing as a permanent acre of good land or of bad land or of indifferent land and that the condition of land can change from time to time depending on climatic conditions and on management. We are assuming an average level of management, so that factor need not concern us unduly, and we are taking account of climatic conditions in making the first assessment to the extent that variations from one year to another in climatic conditions affect farm incomes, so under section 9, the rate of farm tax will change also.
Therefore, there would not be a reevaluation or a re-assessment of land after a wet year, for instance. I should hope that in the vast majority of cases, once the first assessment on the basis of this section had been completed, it would not be necessary to return to it except in cases where the farmer in question either acquired more land or disposed of some of his land and consequently there was a change in the number of adjusted acres and in which case he would be liable for farm tax.
Deputy Flanagan claimed also that the adjusted acre notion is similar to the residential property tax. That is not the case. The residential property tax is based on a combination of both a value criterion and an income criterion. It has no relevance to the kinds of factors to be taken into account in adjusting acres. A number of factors which Deputy Flanagan perceives as difficulties in the process of adjusting acres are the very factors we have set out in section 2 as being the ones to be taken into account. In the context of this Bill, therefore, they are not difficulties but are part of the base on which we would assess the number of adjusted acres in any case.
Regarding the number of adjustors, Deputy Byrne seems to be very well informed because he pointed out that we will be using about 100 Land Commission inspectors and taking on about 100 other people to carry out the job. These people will be employed on a five year contract basis.
Will they be provided with State cars or motor bikes?
They will not be provided with State cars nor with Deputies cars and neither will they be provided with suede wellingtons. The Deputy was nodding very much in agreement earlier when a colleague of his was talking about jealousy. It will behoves Deputy Byrne to make the kind of remark he has just made about a group of people who will be young graduates in agriculture seeking jobs for the first time. That kind of remark does not do much either for the Deputy's standing in the House or in the community.
This is the first time we have heard that the additional people will have degrees in agriculture.
These will be the first 100 jobs to be created since the Minister came to office.
The Deputy might as well make the same kind of comment about those people who work for ACOT and who assist farmers fairly substantially or indeed about people who are employed by co-operatives and I am glad that a number of the co-ops employ agricultural graduates in order to assist their members in improving their farming operations. I do not hear Deputies making snide remarks about the incomes paid to such people. Such remarks have no relevance to this debate.
I come now to the last matter raised by Deputy H. Byrne. He wanted to know if the work carried out by An Foras Talúntais in soil mapping will be used as a basis for the work of these people. It will not be used as a basis but certainly it will constitute a body of information which they will use in defining their approach to their work. It will certainly be used in the training these people will receive. Obviously, it will be very valuable information for them to have if it is available, when they go out on the ground to carry out the assessments and the adjustments.
So it will not be used as a basis?
It will not be used as a basis but it will form part of the information they will use to guide them in the work they will be carrying out. The point is fairly obvious. The more information they have before they begin the job of assessing, the better they will be able to do the job. I am quite sure that, in both their training and in laying out the programme of work to be carried out, the maximum use will be made of such information as is available — and there is quite a lot of soil types and conditions around the country. I now come to the conclusion of all of this——
I did ask about the training that these adjustors will have and I would like some information on that.
The 100 people who are being taken on in addition to the Land Commission inspectors — and I think Deputy O'Dea was listening — will be required to be graduates in agricultural science, B.Ags. That is the first qualification they must have. In addition to that we are providing specific training, once they are taken on, before they go out to do the job. I cannot give the House the detailed content of the training programme. They will be on the job during the course of this summer. They will be given a number of weeks training. I cannot say exactly how many weeks or what will be the content of that training, but they will be trained by the Land Commission inspectorate staff. As the House well knows, those inspectors have been at the business of adjusting acres one way or another for a great many years.
I asked one other question of the Minister, which was: would there be a national review of the adjustment after a period?
No, we have not provided for that in the Bill. In the vast majority of cases I would hope the only reason there would be to re-examine a determination of the number of adjusted acres would be in the case where a farm is either being enlarged or where a piece of it is being disposed of or apportioned to some other person. I would hope that that would be the case in the vast majority of farms. If I may be permitted to make a passing reference, as Deputies know, we have provided for an appeals procedure in the event of a farmer feeling that the number of adjusted acres as assessed do not accurately reflect his view ——
——or the local authority.
——or the local authority, particularly in the case of a local authority where a holding has been omitted from the classification list.
What happens in the event of a farmer improving his land?
If he improves his land I do not expect that he will be rushing forward to ask that it be reassessed, nor indeed would the local authority necesarily be in a position, first, to know that he had improved his land or, second, to believe that that would be a basis for re-assessment. Even if there appeared to be a basis for reassessment, the provisions of section 2 already operate on the assumption that the level of investment in the land is reasonable. Unless somebody is going mad altogether with a huge programme of very intensive investment, in most cases I would expect that that would not make any difference to the number of adjusted acres on which he would be assessed.
Let us get it clear. Will he be reassessed or will his acreage be readjusted if he improves his land?
On the whole, no.
What about not on the whole?
It is conceivable that somebody who felt that he had expanded considerably the number of adjusted acres he had could ask to be reassessed. That is possible.
Deputies
Ah, Ah.
I do not think it would be likely that a local authority would ask to do that because the main concern we have in allowing authorities ——
Can the Minister guarantee us that there will not be ——
Just a moment. No, there will not be. In fact, if anything this system will provide an incentive to people to manage their land more intensively and to develop it further.
I asked one question about the 100 acre farmer. If he gives 50 acres to his son, can he avoid paying income tax on accounts, seeing that both holdings will be under 80 acres?
First, that is not a matter for this Bill. This Bill does not deal with income tax. Second, we already had a discussion on that point on section 1 when we dealt with the definitions and in particular the definition of "occupier". If the two units created by the kind of division about which the Deputy talks are separately managed, then they would be separately assessed. If they are not being separately managed, then they would be treated as one unit for the purpose of farm tax. I come to my conclusion on this.
I was going to ask ——
Deputy O'Kennedy has been giving out to me about the amount of time that is being taken up.
In reply to Deputy Seán Byrne on the question of management and ownership, the Minister said that if the holding was divided, that where there is seen to be two distinct units——
For example?
—for management or for ownership purposes?
Management, separate management. Where it can be shown that the two units so created are separately managed they will be separately assessed. If it appears that they are being run as one unit they will be treated as one unit and there will be one occupier who will be liable to the farm tax.
Having listened to the debate and the concerns Deputies have expressed about different ways of assessing the productive potential of land, I have come to the conclusion — and I have paid a lot of attention to what Deputies have been saying — that the factors we have set out here are indeed factors that are properly taken into account in assessing the productive value of land. I believe these are the kinds of factors that the average, sensible, down to earth farmer will take into account himself when he is approaching the matter. They are ones that are capable of assessment, of being put together in order to form a clear picture of the productive capacity of land. Therefore, they are entirely suitable as a basis for this tax, as a basis for a tax which, as I have said on many occasions, is simple, easy to administer both by the taxpayer and the tax gatherer, predictable as to the revenue it will produce and, all other things being equal, one which will provide an incentive to people subject to this farm tax to expand their production and make better use of their land.
A Minister who can say in the House now that this basis of taxation is simple, easy to administer and fair is capable of saying anything, when what he said two years ago was exactly the opposite. He said then that farmers should be taxed on the income they get from their farms and any subsequent profit should be taxed on the same basis as manufacturing industry. I could quote the Minister at great length when he pointed out that capital taxation on farmers to replace agricultural rates is unsuitable and unfair. Two years later he can come into this House, flatly contradict himself and give us a long drawn out explanation of how reasonable and fair it is.
The Deputy should ask Deputy Noonan what it feels like.
That is a measure of the Minister's credibility. Having come to that, I do not think we have to rely——
The Deputy is not even quoting me fully.
——on the Minister's credibility in dealing with the effects of this tax. The Minister's reply has been on the basis of his opinion of what sensible farmers — and there are a fair few of them here — would take into account.
Is the Deputy telling me that farmers would not take these things into account?
Perhaps the Minister will allow me to talk now. I am saying that what the Minister has put in this Bill is in no way related to what sensible farmers might or might not take into account. What the Minister has put into this Bill is what this new breed of adjusters shall take into account. Each and every element entered here has to be taken into account as a matter of law.
And each one of them is one that any sensible farmer would take into account.
Every element of all of those nine or ten things — slopes, proximity to mountains — nature and quality etc., must all be taken into account by obligation under this law. Therefore, these adjusters and the decisions at which they will arrive with regard to adjusted acres will all be very different from the sensible farmers to whom the Minister has been appealing all day and the kind of things they would take into account. Certainly farmers would take some of these matters into account but the Minister is providing that every one should be taken into account. I will give some examples.
(Interruptions.)
The proximity of mountains would not be a factor in assessing land.
There are some things which the sensible farmer would take into account which are not included here. The first thing a farmer would think about is the type of farming which was going on before he bought the land and what kind of a farmer was farming before he bought it and what use the land had been put to for the previous five years. Those are the sensible criteria which a sensible farmer would take into account but they are not in the Minister's list.
The range of uses to which land can be put——
Can be put? If the Minister would let me finish — what I am talking about is the use to which the land has been put.
(Interruptions.)
Acting Chairman (Mr. J. Fahey)
Deputy O'Kennedy, please.
What the Minister has put in is an exhaustive list of what each new adjuster must consider by obligation, in law.
The Deputy has not proposed a single amendment to it.
Acting Chairman
Deputy O'Kennedy.
(Interruptions.)
(Limerick West): The legislation is not amending.
(Interruptions.)
I am just pointing out how nonsensical it is.
Are you withdrawing your amendment, so?
(Limerick West): Yes.
I am giving notice that Deputy Noonan has said he is withdrawing the only amendment.
He did not say that.
He said exactly that.
(Limerick West): I did not say that.
I said "Are you withdrawing your amendment" and Deputy Noonan said "yes".
(Limerick West): We did not put in an amendment, we put in a new section.
Acting Chairman
Deputy O'kennedy, without interruption.
We are going to bring this to a head.
(Interruptions.)
It is quite clear from what the Minister said——
(Interruptions.)
Will Deputy Farrelly go home for a while or else get up and talk sense.
(Interruptions.)
Allow Deputy O'Kennedy to proceed.
Come in and talk like a man if you have something to say.
Acting Chairman
Allow Deputy O'Kennedy to proceed.
Deputy O'Kennedy came in here on Second Stage and he allowed nobody else in.
(Interruptions.)
The Deputy can come in and talk now if he wants to.
If Deputy O'Kennedy is talking he should talk sense.
(Interruptions.)
Acting Chairman
Allow Deputy O'Kennedy to proceed.
(Interruptions.)
Because of the obligation which has been imposed under this law this new breed of adjusters shall do all of these things as distinct from what a prudent farmer would take into account. This job will not be completed within the reasonable life expectancy of most of us in this House at this stage.
That is nonsense.
The Minister has acknowledged that it has to be a visible inspection of each farm and that it has to be judged according to each of these criteria, whether it is sheltered, overlooked by mountains and all the rest. If these criteria are adhered to as this law says they must, the bulk of it will not be done after ten years. The Minister in a reasonably optimistic assessment said that the bulk of it might be done in five years. Now we come to the point whether this is a sensible way of approaching taxation. The Minister's colleague, the Minister for the Environment who introduced this acknowledged that it would take a very considerable time to get it under way and that what would probably happen is that we might get it down to as far as 40 adjusted acres being the norm after a few years. The Minister had better tell the trade unions that what is being considered here is an adjustment above 40 acres or 50 acres after a number of years.
Deputy O'Kennedy should quote the reference; 1987 was the date given.
I have the record and the Minister's officials know what was said here.
1987 was the date. If the Deputy is going to quote he should quote the lot of it because it does not suit the case the Deputy is trying to make.
I admire the fact that Deputy McLoughlin is in the House and I will not make any special attack on Deputy McLoughlin for it.
It is not surprising that the Congress of Trade Unions said that the proposal of the Government to exclude all farmers with less than 80 adjusted acres, a substantial farm, from income tax is indefensible and an insult to the PAYE workers who have lobbied and campaigned through the trade union movement for a tax system which would ensure that all sections of the community would be taxed on the basis of their incomes. That is also what the farmers want. What will the Congress of Trade Unions say when they hear that most of the adjusting will still be going on in five years time and that those who will be liable to this tax——
Most of it will be done by 1987.
——will only be those above 40 adjusted acres. What we are really doing here today is engaging in ideological nonsense to accommodate two views that nobody now has any faith in. This explains why the Minister for the Environment who introduced this legislation is not here today.
That is rubbish.
(Interruptions.)
Acting Chairman
Allow Deputy O'Kennedy to proceed.
Deputy O'Kennedy did not believe what Deputy Michael Noonan said because he was in Tunisia with less reason to be away than the Minister for the Environment.
(Interruptions.)
Acting Chairman
Allow Deputy O'Kennedy to proceed.
This is an attack against fair play in taxation. The farmers recognise that. They have asked to be treated the same. We have now reached the very happy day when we have the unions and the farmers agreeing. The only ones ignoring them are the members of this Government. Within both Government parties it is clear from today's contribution that many backbenchers know that we are being put through a lot of nonsense today and that this will not even yield tax and that the only growth we will see here is a growth in administration and bureaucracy. There will be 100 jobs for young graduates but when the Government tell us that this is what sensible farmers would or might do, they are ignoring the reality of the obligation they have put in here that they must go through all of these and any question by way of legal appeal will insist that each and every one of these will have been accounted for by every visiting adjuster to every farm. For all of this, perhaps in 1987, 1988 or 1989 we will get some element of contribution. If the Government had developed the system already there and given the 200 people to strengthen the system, probably with the agreement of all, the Government would have about four times the level of contribution they will get from this nonsense tax in three years time.
Unfortunately we are running out of time. The people of Cork will perhaps be flattered or perhaps discouraged that at least we have located the mythical area with the best land in Ireland by which all else will be judged, down around Fota in County Cork. There will be many visitations to Fota to assess the quality of this land. That is the Minister's opinion and the Minister's opinion is worth about as much as every other opinion expressed by the Minister in this House today — not a hat of crabs. A Minister's opinion as to how these things might be done, should be done, could be done and as to what sensible farmers would or should do is of no consequence when it comes to determining the meaning of the law as passed. The judges who decide this will not consult the Official Report to see what the Minister of short duration in Finance, one Deputy Alan Dukes, thought it should mean.
I will be here longer than the Deputy was.
They will not read what. They will read this Bill that we are now being forced to put through in six hours. They will say that it is assumed to mean what it says, and there will be more court litigation, more wasteful expenditure, and the question that Deputy Flanagan asked is relevant. At the end of the day we will have another nonsense tax which is going to cost more in administration and litigation and will drive tensions and jealousies between farmers.
The Minister talked about what on average might and should happen and what reasonable people would do. Those words "on average" are very comfortable and reassuring, but in order to sum up the nonsense that we have been forced to put through today I quote from my colleague behind me who is a man of some sense, Deputy Byrne. When I asked what in Heaven's name is meant by "on average" he said, "If your head is in the fire and your feet are in the fridge, on average you are sitting comfortably."
(Interruptions.)
Do us a favour, take this away.
If you went off and did that average thing the rest of us would be better off.
The Minister has been very fair in section 2 of the Bill. In section 2(1), (2), (3) and (4) he has given a fair chance to the adjusters and fair guidelines on how to decide an adjusted acre. The Opposition spokesman on finance said that he had listened to a great deal of codology here today from the Government side of the House, but I have heard people on the far side encourage tax evasion. For instance, somebody asked if a person who had 100 adjusted acres could divide it up into two 50s and give 50 to his son and 50 to himself so that he would pay land tax only. Let me ask the same people if a person on PAYE who has a son unemployed can get half his salary paid to his unemployed son. That is what they are encouraging.
We are with the Deputy all the way. We want tax on income.
(Interruptions.)
Acting Chairman
Allow Deputy McLoughlin to proceed.
It is the same as the ICTU whom the Deputy is supposed to represent.
In 1982 the courts declared rates on agricultural land unconstitutional. In my county, Meath County Council lost an income of £1.4 million, and it is only at this stage that the land tax is being brought in. The land tax should have been brought in to replace rates, and all farmers should have had to pay income tax also. Had I been Minister for Finance in a Labour Government that is exactly what would have happened. We are coming to the day when there will be radical changes because people outside are looking to see what parties are prepared to provide an equitable tax system. Looking at the Opposition I cannot say that, but let me tell what happened during the elections. I am a good man for a story. I was driving along a narrow road one fine day and I met an old, disabled man sitting in a wheelchair and he really relieved my mind. He said that the problems of the country were going to be resolved. Charlie was going to abolish income tax, VAT, land tax, refuse charges and water charges.
(Interruptions.)
He has already abolished the Labour Party.
(Limerick West): I want to say to Deputy McLoughlin that he has no mandate from the people to speak in those tones. I will quote from the Labour Party's policy document of 1982.
The party opposite had got no mandate for a 2 per cent levy.
(Limerick West): I ask the Deputy not to interrupt. All farmers with a taxable income want to pay tax and health contributions.
That is right.
(Limerick West): That is in the document. I say to the Minister that he has no mandate either because in November 1982 Deputy Dukes declared Fine Gael opposition to “any new form of capital taxation on farmers to replace agricultural rates when they are finally phased out next year”, and he rejected the notion of a property tax on productive assets. He said that farmers should be taxed on the income they got from their farmland and any subsequent profits should be taxed on the same basis as manufacturing industry. In the joint Programme for Government 1981-1986——
(Interruptions.)
(Limerick West):——he said that in drawing up new tax proposals account would be taken of the cost of the care of dependent children. Where is that element in this legislation? The Minister in his reply just now was very selective. He made no reference at all to his complete U-turn and change of heart from his point of view and that of the two elements of this Government. I tell him now to withdraw this Bill. He will come out of it with honour because he has no mandate to impose this legislation.
As a party we oppose this Bill because it is totally against the best interests of farming.
We are on section 2.
In relation to this section, if this Bill is passed will the Minister take into account the reclassification of the severely handicapped areas in the western counties in particular? Will he exempt the areas which are classified as more severely handicapped by the EC and which were given special headage payments because of the reclassification? Surely he must realise that putting a land tax on those areas cannot be justified in any event. If this Bill is passed will the Minister provide special allowances for those areas?
Let me respond to Deputy Leyden's question. It does not arise under the section because those areas are classified as most severely handicapped on the basis of physical criteria. They will be taken into account in assessing the basis on which the tax is charged, that is the number of adjusted acres.
(Limerick West): Will the Minister put down an amendment?
No, I am not suggesting or even giving the slightest hint of a suggestion that there will be an amendment in the Bill. The factors that lead to those areas being classified as more severely handicapped are physical factors which are taken into account under the provisions of section 2 of this Bill. Using those criteria to assess acres in all of those areas will give on the whole a very small number of adjusted acres per map acre. Therefore, the Bill already caters for that.
We have heard at five or six different times from Deputy Noonan about no mandate from the people for this legislation. I want to remind him that while his party were in Government they got no mandate for a 2 per cent levy or a resource tax. The Deputy was the second person to propose a flat rate of tax. Joe Rea was the first; Deputy Noonan was the second, and he made four different speeches about it until the boss told him to stop talking about such proposals. Let him be honest with himself. There are surely as many people in his constituency who are in favour of this proposal as there are everywhere else. He should not waste the time of the House talking a lot of rubbish. Deputy O'Kennedy and Deputy Noonan are smiling. They spent three and a half hours speaking on Second Stage and did not allow any of the other Members to make a contribution.
We had only one day.
The Whips agreed.
This Government are pushing everything through.
The Deputy should not try to make people think they had no say.
On a point of order, we have been debating this section since 12 o'clock. There is about one hour left and there are other important sections to be dealt with on which we need clarification from the Minister. I would move that we regard this section as standing part of the Bill.
Deputy Mac Giolla wanted to ask a question.
I did. Unfortunately, a Leas-Cheann Comhairle, you replaced the Acting Chairman who gave free rein to everybody for some time. I thought I would get free rein and I intended to reply to some of the points made by other Deputies in regard to the need for a land tax and the need to get some return from the farming community.
We are dealing with section 2.
I am quite aware of that. I wish you had been here for the past two hours. We could have moved on to section 10 by now.
Deputy Mac Giolla was not here.
I was waiting to move on for hours. Deputy O'Kennedy made the point that he wanted income tax to be paid by farmers in accordance with the policy of congress. I merely wished to make the point that if farmers were paying the same taxes as in 1978 and if those taxes had risen simply in accordance with farm income without any increase in the number of people in the tax net — at that time there were only 22,000 in the tax net — farmers would today be paying £55.5 million in rates and £85.8 million in income tax, a total of £141 million. Under this Bill it is hoped by 1987 to bring in £65 million. I agree with Deputy McLoughlin that this land tax should be replacing rates and that income tax should be paid as well because we should be getting at least £141 million from farmers based on the 1978 figures.
Question put.
The Committee divided: Tá, 76; Níl, 65.
Tá
- Allen, Bernard.
- Barrett, Seán.
- Barry, Myra.
- Begley, Michael.
- Bell, Michael.
- Bermingham, Joe.
- Birmingham, George Martin.
- Boland, John.
- Bruton, Richard.
- Burke, Liam.
- Carey, Donal.
- Cluskey, Frank.
- Conlon, John F.
- Connaughton, Paul.
- Coogan, Fintan.
- Cooney, Patrick Mark.
- Cosgrave, Liam T.
- FitzGerald, Garret.
- Flaherty, Mary.
- Flanagan, Oliver J.
- Glenn, Alice.
- Griffin, Brendan.
- Harte, Patrick D.
- Hegarty, Paddy.
- Hussey, Gemma.
- Keating, Michael.
- Kelly, John.
- Kenny, Enda.
- L'Estrange, Gerry.
- McGahon, Brendan.
- McGinley, Dinny.
- Mac Giolla, Tomás.
- McLoughlin, Frank.
- Manning, Maurice.
- Mitchell, Gay.
- Mitchell, Jim.
- Molony, David.
- Moynihan, Michael.
- Naughten, Liam.
- Coveney, Hugh.
- Creed, Donal.
- Crowley, Frank.
- D'Arcy, Michael.
- Deasy, Martin Austin.
- De Rossa, Proinsias.
- Desmond, Barry.
- Desmond, Eileen.
- Donnellan, John.
- Dowling, Dick.
- Doyle, Avril.
- Doyle, Joe.
- Dukes, Alan.
- Durkan, Bernard J.
- Enright, Thomas W.
- Farrelly, John V.
- Fennell, Nuala.
- Nealon, Ted.
- Noonan, Michael.
- (Limerick East)
- O'Brien, Fergus.
- O'Brien, Willie.
- O'Keeffe, Jim.
- O'Leary, Michael.
- O'Sullivan, Toddy.
- Owen, Nora.
- Pattison, Séamus.
- Prendergast, Frank.
- Quinn, Ruairí.
- Ryan, John.
- Shatter, Alan.
- Sheehan, Patrick Joseph.
- Skelly, Liam.
- Spring, Dick.
- Taylor, Mervyn.
- Taylor-Quinn, Madeline.
- Timmins, Godfrey.
- Yates, Ivan.
Níl
- Ahern, Bertie.
- Ahern, Michael.
- Andrews, David.
- Aylward, Liam.
- Barrett, Michael.
- Blaney, Neil Terence.
- Brady, Gerard.
- Brady, Vincent.
- Brennan, Mattie.
- Brennan, Paudge.
- Briscoe, Ben.
- Browne, John.
- Burke, Raphael P.
- Byrne, Hugh.
- Byrne, Seán.
- Collins, Gerard.
- Conaghan, Hugh.
- Connolly, Ger.
- Coughlan, Cathal Seán.
- Cowen, Brian.
- Daly, Brendan.
- Doherty, Seán.
- Fahey, Francis.
- Fahey, Jackie.
- Faulkner, Pádraig.
- Fitzgerald, Liam Joseph.
- Flynn, Pádraig.
- Foley, Denis.
- Gallagher, Denis.
- Gallagher, Pat Cope.
- Geoghegan-Quinn, Máire.
- Harney, Mary.
- Haughey, Charles J.
- Hilliard, Colm.
- Hyland, Liam.
- Kirk, Séamus.
- Kitt, Michael.
- Lenihan, Brian.
- Leonard, Jimmy.
- Leonard, Tom.
- Leyden, Terry.
- Lyons, Denis.
- McCarthy, Seán.
- McCreevy, Charlie.
- McEllistrim, Tom.
- Molloy, Robert.
- Morley, P.J.
- Moynihan, Donal.
- Nolan, M. J.
- Noonan, Michael J.
- (Limerick West)
- O'Connell, John.
- O'Dea, William.
- O'Hanlon, Rory.
- O'Keeffe, Edmond.
- O'Kennedy, Michael.
- O'Leary, John.
- Ormonde, Donal.
- O'Rourke, Mary.
- Power, Paddy.
- Reynolds, Albert.
- Treacy, Noel.
- Walsh, Joe.
- Walsh, Seán.
- Wilson, John P.
- Wyse, Pearse.
Tellers: Tá, Deputies Barrett(Dún Laoghaire) and Taylor; Níl, Deputies V. Brady and Browne.
Question declared carried.
Progress reported; Committee to sit again.