Seanad Éireann debate -
Tuesday, 17 Dec 1974

Vol. 79 No. 3

Rates on Agricultural Land (Relief) Bill, 1974: Second an Subsequent Stages.

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

Parliamentary Secretary to the Minister for Local Government (Mr. Begley)

This Bill is a simple continuing measure. It continues for a further year the legislation which governs relief from rates in respect of agricultural land. This relief is given by means of the agricultural grant which is paid by the Exchequer to county councils to enable them to give abatement of rates to occupiers of agricultural land. In the coming financial year more than £30 million will be paid over from the Exchequer to county councils by means of the agricultural grant to reduce the rates burden on the agricultural community.

The Bill provides for the continuation of the existing allowances for the year ending 31st December, 1975. In the case of land holdings the valuation of which does not exceed £20 the primary allowance relieves 100 per cent of the general rate. This allowance effectively derates 77 per cent of all rated holdings of agricultural land. In the case of holdings between £20 and £33 valuation the primary allowance relieves 100 per cent of rates on the first £20 of the valuation and the rated occupier is liable for rates on the remainder only. Land holdings with valuations in excess of £33 qualify for a primary allowance of 80 per cent in respect of £20 valuation and a supplementary allowance of 30 per cent on the remainder of the valuation. In addition to the aforementioned allowances an employment allowance of £17 per workman is available, in appropriate cases, towards the relief of the net rates payable after deduction of the primary and supplementary allowances on holdings with land valuations over £20.

I commend the Bill to the House.

Mr. Dolan

I have nothing against the Bill as submitted, but this question of rates on agricultural land is a very important one and one to which any Government should be directing attention at present. Since we entered the EEC this matter of agriculture and agricultural products is tremendously important. While I appreciate that on a Bill such as this it might not be relevant to discuss the plight in which farmers at present find themselves, nevertheless, it is fair to say that there is a definite connection and that anything that depletes or increases the income of a farmer is something that should be examined very closely.

Our economy depends to a great extent on farming and farm products, and many of our industries are connected with farming. But for the fact that farmers are in the front line in producing their products, not alone would there be many people out of work but there would be a further increase in the 80,000 people that are at present unemployed. In a situation such as that, any Government that is conscious of what is happening— especially this Coalition Government who have come into office recently and who, while in Opposition, advocated many changes in this policy of rates on agricultural land and who now have the opportunity of doing something about this matter—should not just come in here and present the same legislation as we could have got and were getting down through the years from the Fianna Fáil Government.

There is one item in particular— the £17 relief that is given to a farmer if he employes somebody on his farm during the year. This is a joke in 1974, because £17 was a very small figure even 20 years ago. If it was of any benefit to the farmer at that time, it is certainly not of any benefit to him at present. It certainly would not convince any farmer to keep a workman in his employment and, to qualify for this £17, he has to keep him in employment for the whole year. For that reason, that part of the Bill should have been amended. The farmer's daughter does not qualify for this relief. There are many farmers who do not have a son to inherit the farm, and it is wrong that if there is a daughter on the farm she should be denied this benefit.

The Government should direct their attention to this question of rates on agricultural land and valuation. We know now that many of these valuations are unrealistic. There was some land highly valued under the Griffith Act because it could grow flax. Flax is no longer being grown, and this valuation still remains on the land. Farmers can find themselves in that predicament, especially Northern farmers. A great deal of flax was grown in the counties of Cavan and Monaghan and Donegal. The farmers there find that the rates on agricultural land is a great burden on them.

Recently the Government introduced another tax on the farmer, that is income tax. They were heavily loaded in 1974 without having this added on. Some of them may have been looking forward to some relief in rates. If this policy of imposing income tax on farmers is to continue, then this question of rates must be examined and rates on agricultural land must be abolished if this country is to progress as it should progress under EEC membership. I know it will cost money but it will be money well spent. The farmers would be as willing as anybody else to pay their share of taxes. Those of us who pay rates know that in many cases there is no allowance made for the financial circumstances of the ratepayer. You may make claims against income tax, but rates are a tremendously heavy burden.

Recently people have been granted some slight exemption but it is negligible and useless now, especially this year. While I cannot say that I am against these measures, the fault I have to find with them is that the old figures have been left, the farmers still find they have to pay rates, and there is no incentive whatever given to anybody to help them to remain on the land. If that was the reason why the £17 was put in there it was ridiculous. An allowance of at least £100 for a farmer who is paying heavy rates might be some inducement to him to keep a man working on his farm, but the suggested amount will be useless.

Mr. W. O'Brien

This is a continuing Bill, but I never could understand why females were denied £17. As the Senator on the other side said, a farmer might not have any sons. Since £17 was not an incentive even ten years ago it is hardly the intention of the Bill to make it an incentive now. However, I was encouraged by the fact that the Minister, who, after all, is in that position only about a year and a half, has promised to have it re-examined for the coming year. I sincerely hope also that in the coming year this relief will be given in respect of women.

I do not think it is fair to say that nothing has been done to help the ratepayers. The removal of the health charges from the rates is an advantage and an incentive, and in a short space it is not possible to do everything. I sincerely hope that the Minister will review the points that I have mentioned. No change was made up to 1973 and it looks as if no change will be made this year, but let us hope for a change in the coming year.

Mr. Keegan

This Bill is similar to the one that comes before the House each year. At this time, in the middle of the worst agricultural crisis ever to take place in this country, something more is needed. The time has come when we must decide once and for all to dispense with the rating of all agricultural land of £20 valuation and under. It would cut out a great deal of cost. In fact, it would save millions, if all the small holders' holdings were completely wiped off the rate books because of the amount of time which is required to get out the rate books, to get out the estimates, to decide on the various remissions and so forth.

Sooner or later some Government, some Minister or some Parliamentary Secretary must come forward and say we are going to do this once and for all: to cut down on administration costs, to introduce a straightforward Bill which will release all holdings of £20 valuation and under. In fact I would go even further and say that unless there is some immediate improvement in farm incomes some Government may be forced to go well beyond £20 and up to £30 land valuation and decide to derate them completely. It would save money in the long run.

I am disappointed that valuations are similar to what has been introduced in the past. I would have expected something more in order to assist the farming community in these difficult times. Therefore I would appeal to the Parliamentary Secretary to tell the Minister that many people feel that more needs to be done in this difficult situation.

Like other speakers, I think the £17 primary allowance is nothing short of a farce in this day and age. It provides no incentive whatsoever to any farmer to give employment to a man. Twenty years ago £17 did have some value and some purchasing power, but it has none today. As I stated before when Fianna Fáil were in power, this £17 is unrealistic.

We must do something to try to improve the lot of the agricultural worker. That £17 means nothing. It is extraordinary that only last week another body who negotiate wage claims on behalf of the farm workers decided to agree to a lower cost of living increase for farm workers than for other sections of the community. That is a retrograde step. It is something that should not have happened irrespective of farm difficulties. The Government and the Minister could have stepped in and given further reliefs, and by doing so they would be encouraging farmers to continue with employment. They would be fighting the flight from the land and they would be improving the unemployment situation. The time has come, too, when the farm worker should be exempt from income tax. After all this £17 primary allowance was introduced many years ago to encourage farmers to give employment and keep the work force on the land. But the situation is that farm workers were obliged to pay income tax over the years and the farmers were not so obliged. That situation needs to be corrected, and the only way that I can see it being corrected effectively is to abolish income tax on all farm workers or those in receipt of farm wages because of the low rate of wage which they are receiving and because of the uncertainty which lies ahead of them.

While I support this Bill it does not go far enough in this day and age. Let us hope that this time 12 months when such a measure comes before us again that we shall have something more positive done for the small farmers and the farm workers.

Mr. Markey

We regard this Bill as being just a holding operation for the coming 12 months. It would not be remiss to look forward to some changes being made in this legislation when it is introduced in future. We have to welcome any measure which relieves the agricultural community to the extent of £30 million per year. Indeed, the relief in rates in general over the past two years has been quite considerable, making a saving in each agricultural holding of, on average, £2 or £3 in the £, which is quite an amount to members of the agricultural community.

We must commend this Bill. We look forward to more changes in the next Bill which the Minister will introduce in another 12 months. We all accept the point in regard to the £17 ceiling for agricultural labourers. There is certainly scope within this small figure for an increase and I think we will see some improvement in that respect.

Members of Fianna Fáil have made various points ranging from the abolition of rates on agricultural land to the abolition of income tax for agricultural labourers. These are contradictory statements. The fact that agricultural labourers were subject to income tax was one of the reasons the Government decided that, in all justice, it was necessary to introduce income tax legislation for farmers of large valuations. The point made by Members on the opposite side of the House that rates on agricultural land should be abolished altogether is a point which they have not made before. They made the point about abolishing rates on buildings but not on agricultural land. They would need to do some research into this matter to see what the consequent charges on the Exchequer would be. Having made these points I now commend the Bill and look forward to hearing some good news from the Minister in regard to the £17 allowance.

Mr. McAuliffe

I, too, welcome the Bill. When we realise that 77 per cent of agricultural holdings are derated to a very considerable amount I think everybody should be satisfied. In my memory, this is the first year that there has not been an increase in rates in Westmeath and they are at their lowest, because the health and housing charges were removed. Having removed health and housing charges and contributing £30 million for the derating of land, the Government are doing remarkably well.

In the Dáil debate quite a number of Deputies mentioned the £17 allowance. The Minister stated in the Dáil that he would give that matter serious consideration next year. The average agricultural rate is about £25 per week. A farmer who retains a man for a full year is entitled to one week's wages off in the year. The £17 allowance does not match up with that.

Another matter raised in the Dáil was the case where there was no son and the daughter remained at home and helped on the farm. The Minister has promised to give this matter serious consideration and I have no doubt the Minister will keep his word and that we will see an improvement in this respect.

Perhaps a few improvements could be made, but on the whole it is a satisfactory Bill. Seventy-five per cent of the holdings in Westmeath, which is supposed to be a rich county, are under £20 valuation. People in Westmeath who have under £20 valuation are not paying any rates. I went thoroughly into this matter and 75 per cent was the figure I got. If 75 per cent of the people are free from rates in a county such as Westmeath, the other 25 per cent should be able to pay a reasonable rate. They cannot expect to have the wealth of this country and have it free from rates. For that reason, I do not think the Government could do any more to relieve the rates burden except to the extent of the £17 allowance.

Mr. Whyte

I will be very brief. I welcome the Bill as a holding operation for a year or two until such time as the Minister can examine in general the rating of agricultural land. Now that we are members of the EEC we must consider the question in relation to its application in other countries. There are various types of land taxes in the other European countries and we must, in so far as we can, bring our taxation of agricultural land into line with that in European countries. We are direct competitors with them in the production of food. We must have a very serious look at this question in the not too distant future.

All the speakers so far have mentioned the allowance of £17 for agricultural workers. The amount is so small that it is significant now because of the cost of everything and the value of £17. When the Minister is considering this point would he look at the question of rates on agricultural land in so far as the affect further employment on land? There is plenty of scope for further employment on agricultural land. If we calculate the amount of money it is costing the taxpayers to provide jobs in industry we must consider providing incentives to promote more employment for people in the agricultural sector. This would benefit the nation in general.

It has been correctly stated that about 77 per cent of the holdings are derated. It is not true to say that 77 per cent of the land is derated. This might be misinterpreted. It is 77 per cent of the holdings which are derated but very much less than that of the land. If we are to enjoy the goodwill of the agricultural community we must look at the question of rates on agricultural land. We can do this from the point of view of making use of this item in order to encourage the employment of more people on the land.

Parliamentary Secretary to the Minister for Local Government (Mr. Begley)

First of all, I should like to thank the Senators who contributed to the debate. Some people feel that the allowance of £17 is much too small. In the Dáil some Deputies felt the allowance should be abolished altogether because it was so small. However the Bill is steering a middle of the road course and continues the existence of the allowance. I want to inform the House that new legislation will be introduced, as promised by the Minister in Dáil, next year and that he will consider this aspect carefully. As Senator Whyte pointed out, 77 per cent of all land holdings in the country are derated if they are under £20 valuation. Senator Keegan seemed to be under a misunderstanding about the land valuations of £20 and under. Any valuation of £20 and under is derated by 100 per cent.

Mr. Keegan

My argument was that they should be removed from the rate books completely so as to avoid administration costs.

Mr. Begley

I have not much more to say except to thank the Senators for the very courteous manner in which they received this Bill.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported without amendment, received for final consideration and passed.