The Government's proposals for granting increased rate relief to farmers were announced by the Minister for Finance in his Budget statement last April. The purpose of the present Bill which will apply to the three financial years ending on the 31st March, 1965, is to give legislative effect to these proposals. The Bill proposes:
(a) to increase from 60 per cent. to 70 per cent. the primary allowance on land valuations up to £20 and on the first £20 of higher valuations,
(b) to grant a supplementary allowance of 25 per cent. of the general rate on land valuations over £20,
(c) to reduce the minimum qualifying age for the employment allowance from 17 to 16 years, and
(d) that the total grant be paid from voted moneys instead of partly from the Central Fund and partly from voted moneys as at present.
The net effect of these proposals will be the payment of Agricultural Grant totalling approximately £8.6 million in the current year. This will afford farmers relief to the extent of 57 per cent. of the gross rates leviable on agricultural land, as against the relief of 42 per cent. given last year.
Legislation dealing with the relief of rates on agricultural land was initiated by the Local Government (Ireland) Act, 1898. Under that Act, the grant was a fixed annual subvention and gave a flat rate of relief on all agricultural land in county health districts. The total amount of the grant and its method of distribution were altered on several occasions, but until the year 1946 the total of the grant was always a fixed amount.
Under the Rates on Agricultural Land (Relief) Act, 1946, the total amount of the grant, instead of being fixed in advance as heretofore, became related to the actual rate struck by county councils in a particular year. That Act provided that the grant should be the sum needed to give relief on the following basis:—
(1) A primary allowance at the rate of three-fifths of the general rate in the £ on the land valuations up to £20,
(2) a supplementary allowance of one-fifth of the general rate in the £ on the land valuation over £20, and
(3) an employment allowance, calculated at the rate of 10/- in the £ on the land valuation over £20, subject to the limitation that the allowance should not exceed £6 10s. for each adult workman at work on the holding during the whole of the proceeding calendar year.
This method of distribution operated until the passing of an amending Act in 1953 which abolished the suplementary allowance, increased the employment allowance to £17, but left the primary allowance unchanged. The grant was continued on this basis up to and including the last financial year.
The total amount of the grant has increased from £599,011 in 1898 to £2.91 million in 1946/47, to £5.84 million in 1961/62, and it would have increased to £6.1 million in the current year if no change were made in the legislation.
Sections 1, 3 and 4 of the Bill provide for the payment of the increased primary allowance of seven-tenths of the general rate, and the supplementary allowance of one-quarter of the general rate, on land valuations over £20.
The amendments made by the Bill will result in the payment of primary allowance totalling approximately £5.9 million in the current year. To those who might hold that the Bill is not sufficiently generous to the small farmer, I would point out that the primary allowance alone this year will exceed by a considerable sum the total of the grant paid last year. The supplementary allowance applicable to land holdings in excess of £20 valuation which is provided for in the Bill will cost an estimated £1.7 million in the current year.
The Bill also provides for the continuance of the employment allowance of £17 per workman introduced by the 1953 Act. One of the conditions attached to the grant of the allowance is, however, being eased. Up to the present a workman, in respect of whom this allowance could be granted, had to be at least 17 years of age at the commencement of the qualifying period. Section 2 of the Bill provides for the reduction of the minimum qualifying age to 16 years, which is the age at which a person becomes insurable under the Social Welfare Acts. The cost of this concession is estimated at £90,000 in the current financial year.
The remaining sections of the Bill do not call for much comment. Section 5 provides that the total of the employment allowance and the supplementary allowance in any case will not exceed the total rates payable on the land valuation over £20.
Under Section 48 of the Local Government (Ireland) Act, 1898, the basic agricultural grant introduced by that Act and amounting to £599,011 yearly is paid from the Central Fund, while the balance of the grant is defrayed from a special Vote accounted for by the Minister for Finance. Section 6 proposes in effect that the full amount of the grant shall be met in future from voted moneys. The increased allowances provided for under the Bill will have the effect of reducing the net rates payable by farmers on agricultural land in the current year to below the amounts paid by them in the year 1956/57.