Seanad Éireann debate -
Wednesday, 31 May 1978

Vol. 89 No. 4

Rates on Agricultural Land (Relief) Bill, 1978: Committee and Final Stages.

SECTION 1.

Question proposed: "That section 1 stand part of the Bill."

Mr. McCartin

Most, or all, of the objectionable parts of this Bill are contained in Section 1. The first point that comes to the notice of farmers who have to pay rates at this rate and are so deprived of the relief that was offered in this Bill when it was previously introduced, is the question of the employment allowance. The unemployment allowance as it applied in the past was only £15. This figure has not been relevant for a number of years and it was removed in an earlier Bill. It applied at a time when the full relief that was normally given when this Bill was introduced every two years applied and so the issue of rates for the average farmer was not a very serious one. However at this stage since the issue of rates has become a very important issue again, we find now that farmers are being asked to make an immensely increased contribution to local authority finances.

It would be an ideal time to reintroduce a worth-while employment allowance in this section. An employment allowance could be supported by any reasonable Minister. This would benefit a section of farmers, not very many, but nevertheless a number of farmers who give employment and are forced to meet the increased cost of a stamp, the increased cost of wages and the difficulty in getting farm labour at present at the sort of wages that applied in the past. There is a case for including here a generous employment allowance, and I cannot understand why this could not have been done, particularly since it would not have applied to all of them but would apply to the comparatively small number of farmers who are giving employment.

I would like clarification also on the aggregation of valuation. Heretofore there was no aggregation of valuation outside the different rating authority areas. Now, if a farmer owns land in different counties we are going to have an aggregation of valuation. It is a very difficult situation for the people involved in the rating authority. It is probably a useless inclusion because most local authorities will not have any means of knowing where farmers own land in different rating authority areas.

The point which is most worrying to all farmers is the question of the relief of rates being tied to liability for income tax. In future years if the threshold for income tax is reduced to £50, £40 or £30, the Minister does not have to take any legislation. The total rate on relief of rates on agricultural land will automatically disappear to the extent that we could find ourselves, in the life of this Government, in a situation where farmers were liable for tax from the first farmers down to a valuation of perhaps £20. This would mean that most farmers would have the total relief of rates on agricultural land.

This is a cruel imposition in the current year. Next year it is down to £60. Nevertheless it does not worry them as much as the prospect of total abolition of relief which is likely to come for most farmers in the years ahead. The farmers should have an assurance from the Minister on this, or an amendment which would leave the situation as stated in the Bill for this year and next year so that farmers would know where they stand, or an assurance that the relief of rates will not be tied to liability to pay income tax. Looking at it from any point of view, this is not a reasonable way in which to tax the agricultural community. The Minister will concede that there are too many inconsistencies from one county to another and from one farm to another. There is no provision whatever for any realistic adjustment related to income for farmers who may be in a difficult situation perhaps because of failing health. Farmers are faced with this bill year after year regardless of their ability to pay, regardless of their income, regardless of trends in the market, regardless of prices and many other factors.

It is regrettable that the Government have found it necessary to impose taxation of this sort. The least we might give farmers is an assurance that this is all that is being asked at the moment. What the Government is looking for here is a blank cheque which will be tied to the provisions of the Finance Act and farmers could find themselves liable to pay the full rates on every acre of agricultural land which they possess in the future. I would like the Minister to comment on these points.

Mr. Markey

I would like to raise two matters in connection with section 1. According to section 1 this Bill will apply for two years, 1978 and 1979. I question the validity of this in the context of what its implications will be, particularly in 1979. We must envisage a situation in the budget of 1979 where the Minister for Finance may make certain adjustments to the thresholds applicable to income tax and the farming community. In that case this Act as it is introduced here will be largely superseded by what the Minister for Finance does in, say, January or February of 1979. Hitherto we had the same reliefs extended year after year, but we have seen a considerable adjustment for this year, 1978 and also for 1979. If the Minister for Finance decides to adjust the thresholds for farmers under the income tax code, this House would not have any further opportunity to discuss this question under the umbrella of the Rates on Agricultural Land (Relief) Bill until 1980. Therefore I would have thought that since we had the threshold situation adjusted we should have the opportunity of debating this Rates on Agricultural Land (Relief) Bill on an annual basis.

The second point I want to raise is the question of the aggregation of valuation of all the tenements. When I first read the Bill I thought it referred to each individual county, but instead it refers to the country at large. It would mean that a farmer with a valuation of £30 in the County of Dublin and a valuation of £45 in the County of Meath and another valuation of £12 in the County of Kildare would have all these aggregated so he would be brought over the threshold and be thereby liable for income tax and ineligible for rates relief under this Bill. I have no doubt there are going to be heavy administrative problems in regard to the implementation of this aggregation basis, but no doubt the officials will get around their own problems in that regard. These problems will be small compared with the implications that will confront the farmer who has a valuation in each of the counties which I gave as examples. He is going to be on the losing side when it comes to the application of this Bill.

There is no doubt that this Bill is mistitled because, contrary to what has been happening in the past, where there was an extension of the reliefs as they applied, we now find considerable adjustment in those reliefs. In the case of certain valuations the farmers will not be eligible for any great relief. The title of this Bill should read Rates on Agricultural Land (Adjustment of Reliefs). That at least would give a fairer picture as to what is contained in this Bill.

It is regrettable that the Government has imposed the income tax thresholds in relation to rate reliefs, and many members of the farming community will suffer unduly. On the debate on Second Stage I gave certain examples that farmers with valuations over £70 or £80 will have to pay an extra £200 or £300 each year as a result of the withdrawal of the reliefs. It cannot be regarded as an incentive in any way to the farming community and it strikes me as being a peculiar imposition following in the wake of the withdrawal of the rates on private dwellings. I would have thought that the Government, had it been equitable in the imposition of rates, and having withdrawn them from private dwellings, would have considered the withdrawal of rates on double properties such as farmland and even business properties as well. That would be far more equitable than what is before us in this Bill.

Mr. McDonald

I would ask the Minister to look again at the possibility of reintroducing the employment allowance. We had this employment allowance dating back to the early forties or before that. When it was introduced it was a benefit to the then rate-paying public. Over the last few years we have seen the introduction of employment allowances or subsidies in industry. If even half of what was allowed in industry was allowed for through this section 1 it would be of tremendous value to the ratepayers who are now numerically a very small segment of our community. With the declining agricultural labour force it might be sufficient to ensure that we would be able to keep up the numbers of people who are deriving their livelihood from working on the land or from agricultural pursuits. The Government ought to look at this problem more realistically and see if, by the expenditure of a comparatively small sum, it would be possible to increase significantly the numbers of people working in agriculture. One does not need to be an expert to recognise that the agricultural industry as it is here should be able to carry many more people working full time in agriculture than it is presently doing. There is an opportunity for the Government to encourage greater development of employment on farms.

From a social point of view there is a case to be made for the number of widows who find themselves in a situation where they have to employ all the labour that is required on the farm. This Agricultural Land (Relief) Bill of 1978 will increase the burden on widows, especially those with young families. There is always with us a number of widows who, while their families are small, go through a difficult period. Introducing an employment allowance here would be a genuine way of helping these people. It is not as if we are asking for something new. The system has been well tried. It was of tremendous benefit to ratepayers during the forties and fifties. The same could happen again. We could in some way contribute to redressing the flight from the land.

The Government ought to consider this point because the number leaving the land is rising each year. Their jobs are being taken over by machinery and technology of one kind or another. This is regrettable. One finds that in practically every local authority area there is a demand for new houses. People are looking for sites in all areas of the country. People want to live in the country. People would be happier working in the country. The Government have an opportunity under this Bill. It has been tried and tested and found successful. It should be reintroduced and brought up to date.

In regard to the question of aggregating the total valuations, irrespective of the number of counties I would not find any fault with that but I hope that the Government are not thinking of consolidating the title of holdings because this would impede the development of farms. Many people have small holdings in various locations and they would readily trade off these if a suitable piece of land came on the market near to them. If these titles were to be consolidated it would cause a certain amount of difficulty for them in regard to the facility of free sale and especially when we look at what is proposed for the Land Commission. Most farmers who are working on their farms want to have whatever land they have as compact as possible. If one has an out farm it is sitting there until such time as they can trade it in for something nearer to their main place of residence. Therefore I would hope that the Government will not consolidate the titles in this case.

Mr. Butler

I would like the Minister to clarify one matter. While the rateable valuation is over £75 there is a reduction in the relief given in this Bill. When a farmer has two holdings, in two different rateable areas, under £75 or under £60 valuation in each area, there is no reduction in relief for that person. If that is true, it is very, very unfair. The case is being made that allocating the finance taken in by this Bill towards the counties might be a difficult thing. If a person with £60 valuation in one county has to lose relief because of this Bill and a person with two £40 valuations in two different counties does not lose relief, there is something wrong about that.

Minister of State at the Department of the Environment (Mr. J. O'Leary)

The title to this Bill is the Rates on Agricultural Land (Relief) Bill, 1978 and I am convinced that it is a proper title.

Senator McCartin raised two points.

One was the employment allowance and the other was the aggregation of valuations. These matters were also raised by Senators McDonald and Markey. The position about the employment allowance is that this was discontinued under the last Government at very short notice. We must bear in mind that as an incentive to employment the allowance is unnecessary because of the operation of an employment incentive scheme by the Department of Labour. Under that scheme a sum of £20 per week is payable for up to 24 weeks in respect of each additional workman taken on and retained in employment for a continuous period of three months. This scheme applies to employment by farmers. The £20 per week payable under it serves to show how unrealistic the agricultural grant employment allowance at 33 pence per week has become. One can appreciate the importance of this scheme of £20 per week for up to 24 weeks for each additional workman employed by a farmer.

In regard to the aggregation of holdings for rating purposes, up to now each local authority have been concerned only with holdings in their own area. The upper limits of £60 and £75 valuations provided for under the Bill are, however, related to the income tax code. For income tax purposes all land holdings, no matter what county they are in, are taken together. It follows that these income tax thresholds when brought into the agricultural grant allowances should, as far as possible, be applied on a countrywide basis too. The Bill as presented provides for this countrywide aggregation because there are no arrangements at present to help local authorities to carry out the wider aggregation. Subsection (3) of section (1) was inserted to allow this wider aggregation to be left aside. The Minister has already announced that he will make an order in respect of this year to allow the more limited form of aggregation.

Senator Markey raised the question of the Bill covering the years 1978 and 1979 only. If the income threshold is to be changed it cannot be done without full consideration in our Finance Bill. There will be a need for a new Agricultural Grant Bill for 1980 and later years. As regards the title of the Bill which was questioned again by Senator Markey, I would reiterate that this Bill will give relief in rates to the extent of £38.5 million. It is correct to describe it as a Rates Relief Bill. I believe that this Bill is practical. It serves a very important purpose. It gives substantial relief from rates to farmers and I would recommend that the Committee Stage of the Bill be now adopted.

Question put and agreed to.

SECTION 2.

Question proposed: "That section 2 stand part of the Bill."

Mr. McCartin

Even if we did not have the provision to abolish relief on rates on valuations of £75 and over, it would still not be a fair title to the Bill. It would not give any indication of what in fact the Bill proposes to do because if one is going to have relief, one must have relief from some hardship or burden. What this Bill would be doing in such circumstances would be continuing the relief that was given in 1939. Even if the section of the Bill which purports to reduce that relief was not in existence that would still not be a justifiable title. In the circumstances it is absolutely dishonest to propose that this is a title which would fairly or honestly describe a Bill of this nature, an Act to amend and extend the Rates on Agricultural Land (Relief) Acts. In fact, it is an Act to reduce and to restrict a relief which has been there for a long time. The Minister could at least make the concession. We are not going to fool any section of the community. Farmers so involved will discover in good time what the provisions of this Bill are. They are not going to be deceived by a title which is obviously designed to mislead people into thinking that this is a routine measure.

If we are going to be honest in the whole process of legislation, the title of any Bill should relate to the contents of that Bill. The name or description that is given to this Bill is entirely false and misleading. It might at first appear to a Minister drafting such legislation that he could soften the blow, in some way make the burden less obvious, but it is ridiculous to think that there is any purpose to be served by refusing to face up to the truth of the situation in the naming of a piece of legislation which is not designed to give any relief but is in fact designed to reduce relief. It is designed not to give relief of £35 million but to reduce to £35 million the amount of relief that is already there and has been given over the years.

The day is gone when members of the agricultural community, or indeed any other group of people here, can be misled in any way by misnaming legislation in order that they will not discover for a few days what we are talking about or what we are doing. One wonders what has happened to the agricultural organisations that they did not seem to realise what the legislation that was being introduced was about because the representatives of the agricultural community are usually fairly fast to discover deception, designs, schemes and legislation designed to reduce their incomes or take away some of their hard earned profits. But in this case it seems for the moment to have escaped them, the full significance of the legislation that has been named deliberately to mislead people. I think at this stage we must sincerely ask the Minister to put the sort of title on this legislation that it should have if the name is to give any indication of what in fact it is proposed to do.

Mr. Butler

I, like Senator McCartin oppose this section because there is no relief in this Bill. The Bill is introduced to change a previous Bill and it reduces relief given to the agricultural community. There is no doubt that the £38.5 million is based on last year's demand. If this year's demand was the same as last year's there would be a substantial reduction on the relief given to farmers and to agriculturalists. This Bill is a lie.

Yesterday evening a woman who had become the holder of a £75 valuation holding through the death of her husband told me she had got a demand note that had increased the demand of the previous year by £700. That is the type of relief that is in the Bill—a demand for an increase to the holder of this holding, a woman whose husband had invested in the farm over the years, had built up the farm and had debts because of that investment, debts to the co-operative because of the amount of feeding she had to purchase and the number of implements that the husband had to purchase before he died. This is a penal Bill as far as that kind of person is concerned. There was no profit there because of the investment that was put into that land. Even if there were profits, the Bill reduces the profit because of the withdrawal of relief. There is no doubt that it is a penal Bill and the title is definitely wrong.

Mr. Markey

To put into its proper context how this title is a misnomer, I would like the Minister to give us some information on the changes in the agricultural grant as it has applied since 1939, which, I think, was the year of the first Act. No year has seen such a radical change or adjustment in regard to rates relief as 1978-1979. If this Act has hitherto been called the Rates on Agricultural Land (Relief) Act, 1939 to 1976, and assuming there were two years involved under each piece of legislation, we have had at a quick estimate 15 to 20 Bills over the past 40 years covering this matter of rates relief. I would ask the Minister to give us some information—his officials might be able to supply it here and now—as to whether in any previous Bills there was anything like the withdrawal of the rates relief such as contemplated here. I doubt if there was. If my doubt is correct, it is all the more reason why the title of this Bill is a complete misnomer. As I said in my initial contribution, I feel this Bill should be titled Rates on Agricultural Land (Adjustment of Reliefs) Bill, 1978. That at least would give a more honest and fair indication of its contents to anybody affected.

Mr. J. O'Leary

The Bill is entitled Rates on Agricultural Land (Relief) Bill, 1978. This is the correct title. Without the Bill, farmers would have to pay full rates on their land this year. Because of the Bill, farmers will benefit to the tune of £38.5 million in rates relief in 1978. The title of the Bill clearly tells people what the Bill is for. It is clearly to give relief of rates on land. It would be wrong to give the Bill any other title. The purpose of the Bill is to give £38.5 million to farmers this year by way of relief of rates on agricultural land. It also provides for the relief of rates next year. If the title of the Bill were to be changed, people would be misled.

Senator Markey asked for some information on previous Bills. The only information which I have readily available is the Rates of Agricultural Land (Relief) Act, 1976, which brought the employment allowance to an end. Was the title of the Act wrong then? No, of course it was not. The title of the 1976 Act was right, just as the title of this Bill is quite right. I believe that the title is correct.

Mr. Markey

I regret that the Minister or his officials cannot supply me with the information requested. I do not think it would be too onerous to supply it. Even if it cannot be given to me now, I would ask that it be given to me in my private capacity subsequently in written form. It is an inept answer to say that just because the employment allowance was withdrawn in the 1976 Act, that should be taken as a precedent to retain the title of that Bill. As I said, there have never been such radical changes in rates relief as in this present Bill. I can only throw back to the Minister his earlier words in regard to the employment allowance when he said it had been superseded by the incentive premium for the employment of labour. At the time the 1976 Act was going through both Houses of the Oireachtas the point was made by the then Minister—and it was accepted by the farming community—that the allowance as it stood was so insignificant that it was hardly worth its place. I think £17 was the figure at the time. It was such an insignificant figure that it could be as well put out of the way as retained in the Bill. The Minister's reply to my question is not satisfactory and, of course, I have to accept that, but I would ask him to give me the information because there will be future occasions on which this matter can be rehashed.

Mr. McDonald

In respect of the 1976 Act, what was the amount of relief which that Act gave in respect of rates—the total figure for 1976?

Mr. Butler

The Minister mentioned the 1976 Act and said if that was correct then that this one should be correct. That is no argument. If there is a reduction in the relief, and I am sure the Minister must admit there is a reduction in the relief because of this Bill, then the title of the Bill is not correct. This Bill withdraws substantial relief from agricultural land. I have already quoted one case and I could quote hundreds of similar cases. There will be a demand by the farming associations for an explanation because of the introduction of this Bill.

Mr. J. O'Leary

In answer to Senator McDonald, the amount of relief under the 1976 Act was £36.2 million. The amount of relief under the present Bill is £38.5 million. It would require a good deal of research to get all the information requested by Senator Markey in relation to the previous Acts. The new Act will be cited collectively with the Rates on Agricultural Land (Relief) Acts, 1939 to 1976, as the Rates on Agricultural Land (Relief) Acts, 1939 to 1978. These Acts will be construed as one Act. The Acts included in the citation are the Acts of 1939, 1946, 1947, 1948, 1950, 1951, 1952, 1953, 1956, 1959, 1962, 1964, 1967, 1972, 1974, 1976 and 1978. The House will appreciate that it would take much research to get the actual amount of relief granted under each of these Acts. The 1939 Act was the Principal Act. I should like to restate that the amount of relief granted under the 1976 Act, which provided for the abolition of the employment allowance, was £36.2 million. That was called the Rates on Agricultural Land (Relief) Act, 1976. The amount of relief granted under this Bill is £38.5 million. I am convinced that this is the proper title for the Bill.

Mr. Markey

I appreciate the Minister's answer in regard to the number of Bills covering this subject. I wonder if the Minister can indicate whether all the Bills he outlined contained in any instance a reduction in the rates relief from the previous Bill. That would emphasise the point I have been trying to make all along, that this Bill is so radical in its changes that it warrants, even on that basis, a change in the title of the Bill to "Adjustment of Reliefs" rather than meaning that reliefs are being extended or continued when that is not so.

Mr. J. O'Leary

The only Bill in relation to which I have information is the 1976 Bill. That provided less relief for farmers than the 1978 Bill. Under the 1976 Act, the total relief amounted to £36.2 million approximately, and under the 1978 Bill, which we are now discussing, the amount of relief will be £38.5 million approximately.

Mr. Markey

I accept what the Minister says. He confirms what I have been thinking all along that, until the 1976 Act all the previous Bills did not show in any individual instance a reduction in the amount of rates reliefs. The fact is that only since 1976 have we seen a reduction in the amount of rates reliefs. This on its own would certainly warrant a change in the title because we are now into a new era in regard to this rates relief. The position might well be aggravated from the farming community's point of view in 1979 by what the Minister for Finance may decide to do in his budget for 1979. I certainly feel from the information the Minister has given in reply to my question that there is now a greater need than ever for a change in the title.

Mr. Butler

The Minister said that the 1976 Act gave relief of £36.2 million and that this Bill will give relief of £38.5 million. There is a reduction because the rate demand, even this year, averaged 11 per cent throughout the country and the previous year must have averaged 15 per cent. There was an increase in the rate demanded from the farmers. Therefore, if one takes those two figures into consideration there is a substantial reduction.

Question put.

The Committee divided: Tá, 26; Níl, 16.

Tá

• Brugha, Ruairí.
• Cassidy, Eileen.
• Conroy, Richard.
• Cranitch, Mícheál.
• de Brún, Séamus.
• Donnelly, Michael Patrick.
• Dowling, Joseph.
• Ellis, John.
• Goulding, Lady.
• Hanafin, Des.
• Harney, Mary.
• Herbert, Anthony.
• Hillery, Brian.
• Honan, Tras.
• Hyland, Liam.
• Jago, R. Valentine.
• Kiely, Rory.
• Kitt, Michael.
• Lambert, C. Gordon.
• Lanigan, Michael.
• McGlinchey, Bernard.
• Mulcahy, Noel William.
• Ryan, Eoin.
• Ryan, William.
• Whitaker, Thomas Kenneth.
• Yeats, Michael B.

Níl

• Burke, Liam.
• Butler, Pierce.
• Cooney, Patrick Mark.
• FitzGerald, Alexis.
• Governey, Desmond.
• Harte, John.
• Howard, Michael.
• Kilbride, Thomas.
• McAuliffe, Timothy.
• McCartin, John Joseph.
• McDonald, Charles.
• Markey, Bernard.
• Molony, David.
• Moynihan, Michael.
• O'Brien, Andy.
• Reynolds, Patrick Joseph.

Tellers: Tá, Senators W. Ryan and Hanafin; Níl, Senators Burke and Harte.

Question declared carried.

Agreed to take remaining Stage today.

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