I would like to join with the Senators in welcoming you back to the Chamber. I am delighted to see you back and looking so well.
Farm Tax Bill, 1985: Committee Stage.
Question proposed: "That section 1 stand part of the Bill."
Did you enjoy Bob Geldof?
I am not going to talk about Bob Geldof today. Section 1 of the Farm Tax Bill, 1985, is the usual definition section. One term of particular importance is the "occupier" because he is the person who will obviously pay the tax. The occupier is the person entitled to the immediate use or enjoyment of the land whether it is actually used or enjoyed. The vast majority of farms are run by owner-occupiers and under the definition they will be the persons who will be liable for the tax. The definition goes on to specify who is to pay in a number of particular situations. The section also contains an anti-avoidance provision, in subsection (2), which is intended to prevent transfers of land within families or between related companies and so on being used to avoid farm tax. The persons involved in such transfers will continue to be treated as one person and their holdings aggregated for tax purposes unless, of course, the persons concerned are actually farming and managing the holdings separately from each other.
In the section line 18 states "commercial woodland". Will the Minister tell us if the fact that it is being determined as "commercial woodland" automatically creates a grave anomaly? It means that land being used for afforestation is being exempt. Therefore, a farmer who owns land which is classed as woodland does not pay.
As far as the exemption of commercial woodlands is concerned, timber is an investment which involves a long pay-back period. It is a vital national resource and was recognised as a big area for development in the Government White Paper on Industrial Policy. It is right and proper that it should be encouraged through taxation measures. The income tax law exempts private commercial woodland developments and, of course, State forests or a commercial undertaking would not be liable to income tax. This Bill follows suit by exempting from the farm tax woodlands commercially developed, and these include State forests. It would be pointless in any event to tax State forests because it is simply a wasteful and circular transfer of public resources.
This is the first anomaly created in the Bill. If a farmer has marginal land — many parts of my county are marginal lands — and he plants it he will not pay tax. This provision will force marginal farmers to sell their lands to the major groups involved in private afforestation. Those groups will be exempt from paying tax on these lands. The exemption should be limited to the number of acres. I also hope that State forests will be totally exempt. There is a very grave anomaly here in that large multinational companies engaged in private afforestation will be exempt. That is another case of tax avoidance.
I do not agree with the last remarks. There are two exceptions in the Bill, for woodlands and land used mainly or wholly for sport. Certainly, the argument that because marginal land is exempt it will give some benefit to a particular grouping or other is not acceptable because the reduction in the size of the holding when it is adjusted into adjusted acres will mean that most of the land, certainly in the Senator's constituency, will not fall liable for land tax. It certainly would not adjust to the minimum taxation requirement in any event. Outside of those two exceptions — they are the only two exceptions that I will be dealing with — all the rest of the land will be considered for adjustment for this purpose.
The Minister seems to be missing the point I am trying to make. The Minister appears to be creating a situation where afforestation will have an unfair advantage over farming in marginal land. Is this meant to be the position?
This exemption is an important one to make. Every day of the week from the Opposition side, and this side of the House we ask for encouragement to be given to people to go into the development of forests, whether small private forests or woodlands. We all recognise that it would be a major national industry if it could be developed properly. Anything that gives a definite advantage to that industry must be welcomed by those of us who have an interest in seeing our forests developed by private enterprise or by the State.
The Minister, in his first reply confirmed that because of the special importance of forestry to the national economy any assistance possible should be given. I do not think it would be a good thing to penalise people who want to develop in an area that we feel is good for the economy. There is a widespread need for timber here. A processing industry in my constituency is in need of timber and anything the Bill can do to stimulate the production of timber should be welcomed by all.
That does not answer Senator Ellis's point which is an important one, that the section could be subject to abuse. Tax could be avoided by people within the State or by large companies outside the State. Will a farmer who plants some of his land be exempt from tax? Could he set some land in forestry on a commercial basis to avoid paying tax?
I should like to ask the Minister about the massive tracts of land that are undivided, where people hold turbary rights or are involved in commonages. How does the Minister propose to adjust acres in the case of commonages and turbary owned by farmers? Will they be completely exempted or will they come in under the assessment code?
I should like to follow up what the previous speaker said in relation to commonages. I should like the Minister to indicate to the House how it is proposed to assess the value put on commonages or how it is proposed to adjust acreages held in commonage? Is it proposed to divide the total acreage on an adjusted basis as between the various holders in that commonage? If so, the Minister should be aware that as far as the larger commonages are concerned many of the people with legal entitlements to them are in fact unknown and the persons who occupy a commonage can be far fewer in number than those who are registered as the owners of the commonage as such. I should like the Minister to indicate exactly how it is proposed to deal with commonage shares. The Minister should be aware, as the previous speaker is aware, that in the west this is a very serious problem and one that is causing considerable concern. It is one to which commonage holders would like a response.
With regard to the position of commonage, this would be a matter for the local authority to decide the apportionment as between the occupiers of the commonage, whether they had an acreage which after adjustment became an adjustment above 20 acres. In that case it would be up to the local authority to indicate the occupier who would be liable for the farm tax. On the point of the woodlands I should like to state that it is Government policy to encourage the growth of timber here. One of the ways of encouraging this is to exempt interests in this area from a land tax. There is a general agreement on this policy across the floor of the House. I come from a county where there are a large number of State forests. They are totally exempt and would only create a circular transfer if they were to be adjusted. In any event, it is our aim to increase the amount of land under commercial timber and some advantage is given to those who decide to enter into that commercial occupation.
I am not happy with the reply given by the Minister. Surely it is unrealistic to think that the local authorities have any say in this. The local authorities are only an organisation for collecting. They will not be defining the type of land that will come under the Bill. They will have nothing to do with it prior to the land being adjusted. If it is exempted, the adjustment falls into that category but if turbary rights and commonages are not exempted, what happens when they start adjusting the acres on undivided shares spreading over maybe 15 or 20 miles of the west coastline? It is not realistic for anybody to adjust acres on variable soils where I am the tenant because I am not responsible for any particular undivided section of that commonage. If I am not the owner of a certain undivided section of that commonage it cannot be assessed for the purpose of my adjusted acres.
A farmer with an adjusted foothills acreage could have desirable land on the lowlands, coming very close to the lower bracket of 20 acres, but if he has one-tenth share of maybe 1,700 acres commonage spreading across two counties — take one area from Lennane, County Galway, to the Sheefry Hills in County Mayo where there is a large overlap of commonages — how can a local authority decide whether that land should come into the category of being adjusted? We should exempt commonages and turbary rights because if we leave them in they will never be adjusted. I know that from practical experience.
I said on Second Stage that I do not think the Bill will go that far. Anyone who sat in an office or who worked on the ground could not assess commonages when they are undivided. How can one say that the part of the commonage which belongs to me is better than land ten miles away? This is very hard to do where ownership is defined, but where it is not defined, there is no way it can be done.
Senator O'Toole made some valid points. In the west, and in west Mayo in particular, there are many commonages which are held by a considerable number of tenants. For instance, in Achill there are many mountainsides running into 5,000, 6,000, 7,000, 8,000 and ten thousand acres held by over 500 persons. I am aware of one commonage held by 517 people, and this gives rise to its own problems. In relation to a commonage of that nature, you will find that at least half the registered owners are deceased, are in America or England or cannot be traced. In practice, maybe 50,60 or 70 people use portions of the commonage for sheep grazing. Under those circumstances, how will it be possible to adjust the acreage, or make any particular person assessable for any proportion of tax? If you are going to assess, how can you define under those circumstances the difference between owner, on the one hand, and occupier on the other hand? The problem of the occupier is all the greater where many people trespass on these commonages and where the usage is far from regular. Senator O'Toole mentioned the Sheefry area which runs between Counties Mayo and Galway, and where there are vast mountainside commonages owned by a considerable number of people with two local authorities dealing with one area.
My understanding of the Bill is that the question of adjustment is a matter for the commissioner who will be established under this Bill and the question of collection is a matter for the local authorities. What I would like to know is how a farmer with a commonage share is going to be assessed for tax should he come within the scope of this Bill.
We are dealing with extreme but nevertheless important cases. The adjustment will be done by the commissioner and the apportionment as between the occupiers of the commonage will be done by the local authorities in consultation with the commissioner, if necessary. Let us take the example given by Senator O'Toole of somebody who had some land plus commonage. If, say, somebody had 25 acres of adjusted land and 100 acres of commonage which adjusted to one-tenth of that size, then he would have 25 adjusted acres plus ten adjusted acres for the commonage which would be aggregated. That seems to be the way this problem will be resolved. I am not here to adjust the acreage of commonage. This is a job for the adjuster, and that is why we require specialists to do it. The best answer I can give is that the commonage will be adjusted but the apportionment of commonage will be done with the local authorities in consultation with the farm tax commissioner.
That appears to be a very simple answer but I am afraid, in practice, it is not just going to work like that. In the Minister's constituency and in mine, we have the same problem of commonage. There are large stretches of mountainland in commonage even on the east coast, which may surprise many of our western colleagues. I am not satisfied that the Minister has sorted out this problem, and it will require some sorting out, but I do not know how it is going to be done. It is even greater than has been outlined by the previous speakers because many of these people who are entitled to commonage do not use them. This means that others are getting greater usage of them. How the local authorities are going to determine that I have not been able to sort out in my mind.
Are there any other exemptions for the land tax? Would land used for educational purposes and land held by local authorities be exempt from the tax? I know lands held by the local authority in its own area are exempt and local authority buildings are exempt from rates, but are lands held by local authorities in another local authority area exempt from this tax? This could become quite a problem in County Dublin where large tracts of land are held by another local authority.
I repeat that the only exemptions are sporting land and forestry. Any other land will be adjusted and attract the farm tax. As the Senator said, there are large tracts of commonage in my area and I can only repeat what I have said before. We are dealing with the extreme cases and when the commonage is adjusted the commissioner and the local authorities will decide the apportionment as between the occupiers of that particular commonage.
We have consistently opposed this measure. It is already clear as we debate section 1 that Senators from different parts of the country are coming up with practical problems which they see difficult of solution. If we go back to the beginning, the aim of this Bill was to achieve a predetermined yield from the farming community which was aimed at creating greater equity between the different sectors in our economy.
We argued that it will be very difficult to implement this measure. Perhaps it is a pity that the Government were panicked into introducing the Farm Tax Bill when the income tax system was beginning to find root. Quite a number of independent economists around the country have argued that if the income tax system were made to work properly and if there were sufficient staff in the Revenue Commissioners' offices, by the time this land tax is implemented — even supposing that it does create the kind of income which the Minister envisages — the income tax system would have equal or even greater revenue returns than it. But the fundamental flaw in this Bill is that it does not take account of the ability of the individual to pay.
I think you are going away from the section.
Generally speaking, on the first section, some general comments in relation to the Bill are allowed. I am making this point in the context——
No, on the next Stage, Senator.
——of the difficulties which Senators have already come across in debating it. Overall, we are going to see a lot of time and effort wasted, which ultimately may not increase the amount of money from the farming community over and above what would accrue under the existing system but will shift the emphasis of payment from the better off farmers to, as I see it, the poorer farmers.
That would be better on Fifth Stage.
The Minister omitted to reply on turbary rights. Will turbary rights be included for the adjustment as defined in the Bill? It is not written in as an exempted area. I am talking about virgin bog that is being used for turf cuting. Will that also be taken into account for the purpose of taxation?
In answer to the direct question, turbary rights will be considered for adjustment. But we all know that the value of that very marginal land would adjust to a very low level, just as with commonage. Dealing with turbary, one would have to know the circumstances of the area of ground we are talking about. In the vast majority of cases, land of that nature will adjust to such a low level that in nearly all cases it will not reach the limit for taxation purposes.
In dealing with particular cases like that, we will have to deal with the facts on the ground rather than take something in the whole and say that there is going to be a tax on that land. We will have to know the acreage which is under occupation by an individual and know whether that will adjust to the 20 adjusted acreage level. It is a question of facts rather than dealing with it in an abstract form and saying that the particular land will attract a tax. We will have to know the facts of the area being considered.
In relation to the commonage question, I do not want to harp on the issue, but I want to refer to something that is of concern to the part of the country I come from. The section defines the word "occupier" in relation to land as follows:
"occupier", in relation to land, an agricultural land holding, or part of such a holding, or a taxable farm, means the person entitled to the immediate use or enjoyment of the land, the holding or the farm, as may be appropriate, whether actually used or enjoyed or not...
Bearing in mind that definition of "occupier", am I right in saying, in relation to commonages, that tax will be levied on registered owners, or persons entitled to be registered as owners, as a proportion of the total number of shares in the commonage? In other words, if there are 20 shares in a commonage and if the adjusted acreage of that commonage is, say, 60 acres, would each of the 20 registered owners be deemed to have three additional adjusted acres?
Getting back to the point I raised earlier with the Minister concerning commercial woodland, does he not feel that it would be much better if there was a limit on the amount of commercial woodland which could be exempted? We now have large commercial interests from outside the country purchasing large tracts of land here for timber planting. We have no commitment from those outside groups that the timber produced from those lands will be processed in Ireland. Senator Ferris mentioned that there is a timber industry here which needs the timber. We know that when it comes to selling that timber those outside interests will sell it on the open market. If they find it to be more beneficial to sell it in England or on the Continent, will we not have allowed them to use our land without making any contribution to the economy, bar what they have paid for having it planted or for having the timber extracted? A limit of 50 acres would be sufficient to allow private individuals within the State who might wish to plant their own land to be exempt from tax, but over 50 acres should be taxable.
Dealing with Senator Durcan's query, the example he cited is correct. I agree that if there are a number of registered owners then they would attract an adjusted acreage such as Senator Durcan suggested. In regard to Senator Ellis's query, we have said already there are two excepted areas in this Bill, forestry and sporting land, and that remains the case. In the passage of time, if there is seen to be an obvious need to consider the taxation of particular owners such as forestry owners, this could possibly be an area for income taxation but in the event that it is considered that this should be additional to this measure, that can be looked into in the future. At present, in order to stimulate the development of our forestry we are exempting those two areas which include forestry, from this measure.
Further to the other exemptions in regard to use wholly or mainly for sport, that could have a great many twists and turns placed on it. Can we take it that all racecourses will be exempt from the farm tax?
The Senator says "all racecourses", and perhaps he knows more about racing than I do, but I assume it is a bit general to say "all racecourses". The best known ones that I could cite would be exempt but perhaps there are racecourses which are farmland and may be used for one race a year but for the rest of the time are farmland, and I cannot see why those should be exempt. From what I know of commercial racecourses, these are exempt from this measure.
A commercial racecourse is one on which there is one race meeting a year. It would be planned as that and there is nothing in the Bill which states that it cannot be. That is why I wonder if there is a further need to have an exact definition of what is wholly or mainly for sport.
I cannot go any further than what is in the Bill. If there is a race meeting once a year and if the land is used as farmland for the other 364 days of the year, then the definition "wholly or mainly" for farm use clearly indicates that this land should be adjusted for farm tax.
Further to the Minister's reply that it should be adjusted, what allowance will be made to the owner, when the land is being adjusted, for any subsequential loss which he might have further to the land having been used as a racecourse for even one day?
That day may have meant that he had made a lot of money and he might attract a different type of tax. If he has a problem like this he is entitled to make his case before the tribunal and have his problem considered. Land that is used wholly or mainly attracts the farm tax; if it is for sport on one or two days of the year it still attracts the tax and if there is a problem as regards the amount to be paid or loss to the farmer, then it has to be considered by the tribunal as to the liability which it attracts.
In the case of a farmer in the country who may make available to the local football club a portion of his land for their use throughout the year, what will be the position be with regard to that portion of the land?
If it means the land is in continuous use as a football pitch, then this is a portion of land that would be exempt. If it is wholly or mainly used for sport it is exempt.
Can we take it from that that in relation to those farmers up and down the country who are good enough to make available a portion of their land to local sporting organisations that that portion of the land will be exempt from tax?
This is becoming an amazing debate. It seems that Senator Ellis is concerned that somebody will hold land, that a race will be held in it every New Year's Day and then he asks if he will be compensated. If you look at the PAYE sector you will find a benefit in kind — for instance, company cars. If you tried to make a case that because one brought kids from the local school once a year on an outing that the benefit in kind should be adjusted subsequently, you would not get within an ass's roar of a hearing from anybody. We are getting to the stage where it seems that the speakers for Fianna Fáil do not accept that farmers in 1983 contributed 1.9 per cent of total tax to the State.
Mr. O'Toole
That is not relevant.
The truth of the matter is that every effort to tax the farmers has failed. An attempt is now being made and obviously it is being resisted step by step and line by line. It is not realistic to ask is it possible to give some benefit for the use of a field one day for a pony race or horse race. It brings the whole thing into disrepute.
We are here to legislate good law, not to legislate mickey mouse law, and not to allow something to slip through this House without querying every line, every word, if need be. Because I queried a number of points in it Senator Magner feels that I am doing the wrong thing. I can see now the reason why he does not want them queried because the anomalies have started to show up in the first page.
Section 1(1)(b) states:
Where a person is in possession of land or such a holding or farm as a personal representative of a deceased occupier... shall be deemed, for the purposes of the Act, to be entitled to the immediate use or enjoyment of the land, holding or farm:
If somebody is the executor of the will of a deceased farmer and occupier of land and on that person's death the executor finds he has to take over for the purposes of good estate management the running of the farm of the deceased owner, should it be that prior to that happening neither the executor in his own personal capacity nor the deceased registered owner came within the ambit of the Act but the combined total of their holdings would bring them within the ambit of the Act then it seems that this section makes farm tax payable. It would appear that is totally unfair, if I am right in my supposition. The land which the executor or personal representative would hold he would simply be holding that in a trustee capacity. He would not be holding for his own benefit. He would be carrying out the wishes of a deceased owner. Yet, by virtue of that and the fact that he is doing something for somebody who is deceased and which will not lead to any benefit to himself, nevertheless that will have the effect of bringing both himself and the land of the deceased owner within the tax net. I would like to know if I am right in my reading of the subsection because it would seem to clearly specify that in so far as it says that he shall be entitled to the immediate use or enjoyment of the land, he shall be do deemed....
The Senator is right. A personal representative of the deceased occupier or a person who possesses the land without clear title will have to pay the tax.
If that is so I think this requires an immediate amendment to this Bill. It is completely against any principle of justice that in the case of somebody who is in occupation of land without the possibility of any personal benefit accruing to them that that should give rise to a tax situation. It would certainly be understandable if the person was in occupation for his own benefit. Here is somebody in a trustee capacity and by virtue of being in that capacity he is now being taxed. If that is correct, I ask that this subsection be looked at between now and Report Stage.
I read the section differently. I understand that this applies to a farm in which the owner is deceased and we have somebody acting as a personal representative or an executor. While he is holding that position, either in disposing of the land or otherwise, of course this land, if it comes within the adjusted acres, is subject to this tax. That tax becomes a charge on the estate and will have to be paid for by the estate, but it does not penalise the person because he may own less than the adjusted acres in a personal capacity. While he is in possesion of this land in a legal capacity, he will be penalised for that. I understand that this section refers to the piece of land for which he has legal responsibility and if it is within the adjusted acres he will have to pay the tax on the disposal of the property and that the charge will remain on it. It does not have anything to do with the person himself as a person; it is only in respect of the land that he holds.
That would be so if the definition of agricultural land holding which is contained in page 1 of the Bill was not there. Agricultural land holding is defined as the aggregate of the land in the occupation of the same person or persons. Let us take the case of land held by somebody in his personal capacity for which he may not be liable for tax and where that man suddenly becomes a personal representative in respect of a farm of land held by a deceased person who in his own right was not liable for tax. Once he becomes executor on the death of a person, then a tax liability can arise as between the two holdings of land. That is the only explanation if one accepts the definition of agricultural land holding. That penalises unfairly somebody who is not benefiting from the second farm of land; he is only there as a personal representative. It is unfair; it is a movement in Irish law which I do not like and is certainly a movement in Irish society which would encourage people to desist from acting as personal representatives. There is a policy elsewhere where insurance companies and corporate bodies act in that capacity and that can be very costly. The practice has been for individuals to do this job, but certainly if this section is to be construed in the way I feel it can be construed it is going to lead to many more problems.
The Senator will find that under section 3 the apportionment of land will take care of the problem about which he is concerned. Obviously, if a person is a trustee, caretaker or agent of the land, then the income from the land which he possesses as a trustee, caretaker or agent will be liable for farm tax. If he is deriving benefit from the land as well as from the land which he personally owns then he will be liable for tax but under section 3 it will be possible to determine the apportionment as between his personal possession and that which he has in his possession as an agent, caretaker or trustee.
I support Senator Durcan because clearly the question he is asking is whether the position of a farmer whose holding is under the adjusted acreage may find himself as a trustee but not a real beneficiary arising under paragraph (b) of subsection (1). Is this going to be aggregated and involve him in the payment of land tax on the possession of a holding in a temporary capacity which he is really not going to benefit from? The Minister was not clear about this. We need further explanation on the paragraph or we will have further difficulties.
Further to the question I raised earlier with regard to land which might be made available to a football club or an athletic club, could the Minister let us know for how many months of the year the people concerned would need to be in occupation of the land before it would be determined for use for sports purposes?
My understanding of this Bill is that it applies to bona fides farmers but there does not seem to be any definition to cover the title, "farmer" in section 1. This might be necessary in a number of areas. If, for instance, a farmer had an outside, part-time occupation or if he had an income outside farming, what would be the position? Another example is that if somebody in a different profession who wished to become a farmer because of some attractions this Bill might offer, for example, would not have to show accounts or bank statements to the Revenue Commissioners, bought a farm of land and ceased his other activities, would he then become a farmer immediately and would he be included as a farmer for the purpose of this Bill? Throughout the Bill I do not see any reference to farmers as such. The reference is to owners and occupiers of land.
I wish to cite a case of three brothers occupying an adjusted farm that would be liable for tax. The youngest brother works the land. One of his brothers is in receipt of disability benefit and the other is on unemployment assistance and they make no contribution to the productivity of that land. Are these brothers jointly liable for tax?
The answer to Senator O'Toole's question is yes because they are jointly in occupation of the land. Regarding Senator Fitzsimons's question, we are dealing here with the adjusted acreages and anybody in occupation of land amounting to 20 adjusted acres or more is liable for farm tax. Any other combination of occupation plus land, would fall into the category of income tax.
I am not totally happy with what the Minister said in relation to subsection (1) (b) nor am I satisfied that section 3 gets us out of the difficulty in relation to that. I would simply ask the Minister to look at this again between now and Report Stage and perhaps if section 3 overcomes the difficulty, somebody might explain it to me in greater detail. I should like also to refer to the other aspect of subsection (1) (b) on page four and says that where a person is in adverse possession of land or such a holding or farm he should be deemed for the purpose of the Act to be entitled to the immediate use and enjoyment of the land, holding or farm. When, for the purposes of this Act, would a person be deemed to be in adverse possession?
A personal representative of a deceased occupier or a person who is in possession of land without a clear title, in other words in adverse possession, will have to pay the tax. There is no exemption in that respect.
I asked the Minister what length of time would land have to be occupied by a sporting organisation for it to be determined for use for sports purposes.
No length of time is specified in the Act. It is a question of fact. If the land is wholly owned or mainly used as agricultural land it will attract the tax.
"Wholly or mainly used" can mean a lot of things. If a farmer or one of those organisations have farmland which they neglect for 11 months or 364 days of the year and tell the valuer that they do not use that land for the rest of the year, what attitude is the valuer to adopt?
That is why we provide in this Bill for a farm tax commissioner, an appeals tribunal, and of course ultimately if agreement is not reached the courts are also available to the farmer to bring his case forward. That is where this will be decided. I cannot put it into the Bill as this stage. Cases such as these can be determined by individuals who have the knowledge or the expertise or who are in a position to make that decision but not, I am glad to say, the Minister.
That means that the farmer or individual concerned is at the mercy of the commissioner or of the courts. What is the position regarding people who may own private gallops which they have made on what was agricultural land? Where people are using portions of their land for private use such as exercising horses or show jumping, will that be classed as commercial use of the land or will it be exempt under the section? It is for sporting purposes.
Senator Ellis left out the farm tribunal in considering anomalies which may arise. There is a triple opportunity for farmers to have their difficulties considered — the farm tax commissioner, the tribunal and ultimately the courts. If land is capable of agricultural use then it will be adjusted for farm tax purposes. The use the owner makes of that land is his own decision but the land will be considered and adjusted. Regardless of whether an individual wishes to do nothing with land or uses it for some particular purpose, so long as it is capable of being used as agricultural land and adjusted in agricultural acreage as set out in the Bill, it will attract the tax.
We can take it, then, that a private individual who might lay an all-weather track for exercising horses on his land, which would mean that the land will not be then of use for agricultural purposes, will be in a position to have that land exempt from tax?
Would the Minister regard a golf course that is used intensively daily, a large tract of land — and I know several such golf courses throughout the country — as being an exempted area?
To deal again with Senator Ellis's point, I would have to say that I have given an explanation. If there is a problem about whether the land is used exclusively for sporting activities and if there is some doubt about its definition, the appeals system is there to decide the issue. There are two exemptions and one is in respect of land used for sporting activities. Golf courses, as such, are used for sporting activities and therefor are exempt.
The Minister's final statement proves my point about lands used for sporting activity. Therefore, an individual who may lay an all-weather track on his land is using that land for sporting purposes. Also an individual who may set up a show jumping arena for use on his land is also using his land for sporting purposes. Those lands have been so adapted for sporting purposes which means that those lands are automatically exempted.
I cannot say anything different from what I have already said about this. If somebody makes a decision to use their land in a particular way thinking that have changed the purpose for which the land was used previously — such as for agricultural purposes — then they have the facility to appeal. It is a question of fact, and where there is disagreement about that fact then there is provision for recourse to the appeals system.
I do not want to seem to harp on the matter but the fact is that the Minister is contradicting himself. Perhaps the Minister could clarify the legal position for us. I believe that all such sections of such Bills should be examined from the legal point of view. It should not be left to people who may not have any knowledge to judge at a later stage.
At no stage have I contradicted myself. In fact, I have repeated what I have said consistently on the point. If somebody decides to put up a few fences over which to jump horses, leaving them there for the remainder of the year until they require the land, they had better appeal to the tribunal to ascertain whether that constitutes sporting land. As far as I am concerned it is a question of establishing fact in each individual case where there are grounds for appeal. I repeat that that provision is in the Bill for anybody who feels they have converted agricultural land into sporting land. That matter will be decided by the appeals tribunal. If that decision does not please an appellant they can have recourse to the courts to decide the issue.
In a position where land has been exempted under this section for sporting purposes and it ceases to be so used, who will be responsible for notifying the valuation office that it is no longer being used for sporting purposes? Will it be the owner or his neighbour?
It is very easy to give examples — and Senator Ellis is perfectly entitled to give examples — but in my view a golf course is definitely used for sporting purposes except when putts do not drop, when it becomes a serious matter. Football pitches would be similarly classified. We all played on pitches that farmers gave us. One could not possibly get a definition here. It would have to go back to the local scene to somebody who would know the set-up and would appeal it. We could be here all day discussing this. We could continue to give examples, such as a donkey derby on one Sunday and something else on another. This would be impossible to define. In no way do I wish to prevent anyone asking questions nor do I want to defend the Minister, but we could be here all night and we would never get a definite answer.
That comes back to what we are trying to extract here. The position is that there will be two or three different interpretations of this and the result will possibly be dependent on the interpretation of the individual who will sit in judgment — the judicial means mentioned by the Minister.
Which is exactly why I propose that section 1 be agreed. It is a matter we cannot define here. It is a matter that is subject to appeal, for which the necessary machinery is there.
Nobody has said that they have finished contributing to section 1. Senator Ferris may be jumping the gun a little.
Jumping the gun is not a sporting activity unless it is on the interpretation of the far side of the House.
I still want the Minister to define for us "wholly or mainly". Is he going to put a definite period of time on it of, say, one month, one week or one year? He must define it because it is at present open to the interpretation of anybody outside.
The Senator will not get me to put down a period when something is used wholly or mainly for sport. That is a question of fact and under the provisions of the Bill we have set up the machinery which can determine that fact. I do not think the Senator will find any legislation which will state a question of fact in such a manner. In order to overcome difficulties that may arise we have provided for an adequate appeals system. I hope the Senator will agree that it should be used to determine questions he posed here today and which I believe to be very exceptional as far as where this debate is concerned. I do not think the Senator should be quite as concerned about that problem.
What is the definition of "relative" in section 1 (2) (b)?
A person is connected with an individual if that person is the individual's husband, wife or relative, that is a brother, sister, ancestor, lineal descendant or a direct descendant of a brother or sister, or the husband or wife of a relative of the individual, or of the individual's husband or wife, or a trustee of a settlement and where the individual is the settlor, that is the maker of the trust, or a person connected with the settlor or in partnership with the individual or is the husband, wife or relative of a partner.
As clear as day.
What is the significance of subparagraph (c) where there is reference to a direct descendant of a brother or sister? Is there any special meaning in that, seeing that everybody seems to be covered by way of relation.
We are getting on now to the nephews and nieces. We intended this Bill to be a very comprehensive one and to cover all possible interpretations. Subparagraph (c) will deal with an extension of those I have already mentioned.
With regard to the liability as far as relatives are concerned, supposing a farm is jointly owned by a husband and wife and they became estranged but not legally separated, what is the position in regard to the joint tax liability there where one or the other may not have any income from it?
If the couple farm or manage the holdings separately they will be considered separately for the adjusted acreage of their farm. If there is some difficulty in this whole area it is up to the commissioner in the tribunal to decide on the facts.
Supposing the tribunal decide that they are in joint occupation and the courts uphold the decision but in fact one partner has no income from the farm? Where does he or she go to appeal the case so that they need not pay tax for which they are not liable?
If the tribunal decides that they are in joint occupation, that is their decision. They can then appeal to the court. If at that stage the decision is the same, then they are liable to pay tax.
The case cited could mean that somebody without benefit from the farm could under this Bill find himself being assessed and forced to pay tax for which he is not liable.
Not if they get a legal separation.
I was still on my feet when Senator Ferris rose. As far as I am concerned a legal separation is something they may not wish to get, for various reasons.
The same thing applies to everybody in this country.
There is no problem at all in this. If the various levels of appeal agree that they are in joint occupation, then they are jointly liable for tax.
What I am referring to is where the courts may decide one way but the facts are totally opposite. What is the position there? Can somebody be imprisoned for not paying tax for which they are not liable? That appears to be the position.
Senator Ellis seems to have no faith in the judicial system. An appeal system is built into the Bill and the courts are there subsequent to those appeal mechanisms being exhausted. The line pursued by Senator Ellis indicates a complete lack of faith in the judicial system, which is there to protect citizens from anomalies in any Act passed by the Oireachtas.
I have the height of trust and confidence in the Judiciary.
(Interruptions.)
An Leas-Chathaoirleach
In fairness, you should withdraw that remark, Senator Ferris.
I do.
Any of the people appointed by my party were of the standard required for that position, not like some of those appointed by Senator Ferris's party.
He admits it, so I will not withdraw it.
An Leas-Chathaoirleach
Senator Ellis to continue on the Farm Tax Bill. We do not want to get on to appointments.
There have been cases where judges have made mistakes due to the way in which evidence was presented. We have had cases where people have been wrongfully imprisoned and this has been admitted at a later stage. What protection is there for somebody who may be imprisoned in the wrong for non-payment of tax?
This Farm Tax Bill will not solve marital problems and the like or cases where the Judiciary have not accepted all the facts from one side or the other. If the husband and wife are regarded as jointly liable for the tax and they have gone through the whole appeal system at three levels, and at the end of that system they are still considered to be jointly liable, they must pay tax. If the wife has no income or is deriving no benefit, even at that stage she can go to her local county manager under a different section of the Bill and make her case and see if she will receive more sympathetic treatment at that level. Perhaps he would know her circumstances better than the various levels of the tribunals. Senator Ellis has shown little faith in our appeals systems by suggesting that the justice or merit of the case would not become evident, having gone through three levels of appeals. This is a Farm Tax Bill with a very comprehensive appeals system. There is a possibility that a very exceptional case might not be considered sympathetically enough but that could arise under any legislation.
Will the Minister be more specific about the two questions I asked? We have been told that one of the great benefits of this Bill is that farmers do not have to submit accounts, but if a farmer has an income outside farming will he have to submit accounts, and his bank statements in the ordinary way? To become a lawyer, a doctor or some professional like that, one does a specific course qualifies by doing an exam. I am not advocating that that should apply to farmers; but if somebody in one of those professions simply buys an area of land, say, 50 acres of land, and ceases his other activities does he automatically become a farmer for the purposes of this Bill?
The Bill does not indicate whether the person in the occupation of the 20 adjusted acres to 80 adjusted acres is a farmer. It simply deals with the tax that attracts to the occupation of land adjusted between those two limits and therefore that person pay tax. If a person has less than 20 adjusted acres and has an occupation as well, then that is a situation for the income tax code and the Income Tax Acts and it has nothing to do with this measure.
Could the Minister tell us has he any intention of dealing with the anomalies mentioned by Senator O'Toole in regard to commonages and with regard to Senator Durcan's question concerning the status of trustees or executors?
For the last hour Senator Ellis has taken us over the jumps, on to the football field, to all-weather tracks and he has jumped from that to broken marriages and so on. He is proceeding all the time as if there were no mechanisms in this Bill where a person who feels aggrieved can have redress. The Senator knows that that is not the case. Proceeding along that line is to a large extent a pointless exercise because there are sufficient safeguards in this Bill to take care of much of the concern that he has voiced, including the person who allows his field to be used for a day by the local football club, and he has still refused to accept not just the lack of faith in the courts but the fact that other mechanisms are there also to ensure that justice is done to all concerned, to the State and to the citizen.
I am trying to protect the individuals who have no right to come in and express their views here. If Senator Magner thinks that is wrong, then he is entitled to his opinion.
Question put.
The Committee divided: Tá, 26; Níl, 17.
Tá
- Belton, Luke.
- Browne, John.
- Bulbulia, Katharine.
- Burke, Ulick.
- Cregan, Denis (Dino).
- Daly, Jack.
- Dooge, James C.I.
- Durcan, Patrick.
- Ferris, Michael.
- FitzGerald, Alexis J.G.
- McMahon, Larry.
- Magner, Pat.
- O'Brien, Andy.
- Higgins, Jim.
- Higgins, Michael D.
- Howard, Michael.
- Howlin, Brendan.
- Kelleher, Peter.
- Lennon, Joseph.
- Loughrey, Joachim.
- McAuliffe-Ennis, Helena.
- McDonald, Charlie.
- McGonagle, Stephen.
- O'Leary, Seán.
- O'Mahony, Flor.
- Quealy, Michael A.
Níl
- Cassidy, Donie.
- Ellis, John.
- Fallon, Seán.
- Fitzsimons, Jack.
- Hanafin, Des.
- Hillery, Brian.
- Honan, Tras.
- Hussey, Thomas.
- Kiely, Rory.
- Killilea, Mark.
- Lanigan, Mick.
- Lynch, Michael.
- O'Toole, Martin J.
- Ross, Shane P.N.
- Ryan, Eoin.
- Ryan, William.
- Smith, Michael.
Tellers: Tá, Senators Belton and Howlin; Níl, Senators W. Ryan and Smith.
Question declared carried.
SECTION 2.
Question proposed: "That section 2 stand part of the Bill."
Acreage will be adjusted by somebody from the Department. Will there be ongoing adjustment or will the initial adjustment stand for all time?
The answer to the second part of the question is yes. Should there be some change in the circumstances and the local authorities consider that it is necessary to review the situation then they can require the adjusters to come back and take a look at it. The general answer is that once an acreage is adjusted that decision stands.
If land deteriorates would it not be fair that they should come back and adjust the acreage in relation to the value of the land? It could improve also but it can deteriorate, especially with the current weather conditions.
This will require much definition from the Minister because it will militate against any farmer who has been trying to upgrade the standard of his land over the past number of years, whether under the western package, the western drainage programme or the reclamation programme throughout the whole State. Where a farmer improves the productivity of his land and brings it up to a very high standard, his acreage will be penally adjusted as against the man who has done nothing with his land. So it will militate against the farmer who has been trying to improve the fertility of his land. That is the main objection I have to the Bill. It will discourage farmers in the future.
I know of large tracts of land to be reclaimed throughout the whole of the west and large tracts of land that have been improved. The Minister's reply to Senator Kiely's question seems to indicate that an adjusted acreage will stand for all time, regardless of whether the land improves or disimproves over a period. I know land in the west where there is very poor fertility and a very poor filtration base which can deteriorate over a period of five years and revert to its condition prior to reclamation. The base is such that it can drop back inside five years to what it was prior to reclamation if it has not adequate and full retention all through. This is the section that will militate against the farmer who is trying to benefit himself and the State and he is going to be penalised.
The guideline acre is the best acre of land in the State. Is the Minister talking about a tillage acre? I asked this on Second Stage. There is a big variation and it has to be spelled out. We want to know what type of an acre the Minister is talking about when he refers to the best acre of land. Is he talking about the Meath acre, the Wexford acre, the Kildare acre, or the Tipperary acre? Anybody who examines the exercise carried out by An Foras Talúntais in regard to soils throughout this State will see that there is a big variation of soils, each able to produce a particular commodity. One may be suitable for grass, another for cereals or root crops, while another may be suitable for grazing. This question must be answered by somebody here. I know what the Minister is going to say: it will be left with the Land Commission and the experts. He must be more specific on this occasion and tell us what acre of land will constitute the best acre of land within the State.
Senator O'Toole hit one of the points. I would like to deal with it a little more. It concerns the tillage acre. A tillage acre is a most peculiar type of acre. It is an acre in which the soil has to have depth, quality and a very strong growth potential. Any lay person travelling along the road can see by just looking over the wall the difference between what is a good acre and what is not a good tillage acre. At the time when growth is at its fullest, one can see light land, that is land with a very light soil where the colour of the crop is quite different from that of the crop in a very good tillage acre. One will have to be very wary when administering this section. It is not good enough to say as stated in the Bill:
...subject to subsection (2) of this section, "adjusted acre" means any area of agricultural land (whether equal to or greater than one acre) the estimated capacity of which for agricultural production is equivalent to the capacity for such production of one acre of land capable of the estimated highest said production in the State and "adjusted acreage," in relation to an agricultural land holding....
It is not as simple as it sounds. There are acres of land which can produce milk but not tillage. There are acres of land which can produce tillage but not milk. There are acres of land which produce fat sheep but which cannot fatten cattle and there are acres which can do quite the opposite. There are mountain acres which, depending on which side the sun rises, can produce grass in abundance and there are others which cannot. It will be very difficult.
We have two examples of adjusted acres. The EC headage payment scheme, for example, was based on a synopsis sent by the Department of Agriculture. I know it is outside the realm of the Minister for the Environment but it must have been the most obnoxious application made in the history of the State as far as the west is concerned. Land which was incapable of rearing one-third of the stock was not put into the designated area and land which was arable was included. Large farms were put into it and small farms were not. Rocky terrain was left out and land which was less rocky was included. It all seems to have stemmed from the Department of Agriculture in maps supplied to the EC. If something like that happened in this case the law would be used to a most extraordinary degree to try to get fair play into the definition of an adjusted acre.
The Land Commission had a programme for the division of adjusted acres. May I ask the Minister if that programme will now be taken into account in regard to the adjusted acre?
I will deal first with Senator Kiely's question about the investment in land. The Bill assumes that land will be subject to reasonable management and investment. Therefore, if a farmer through his own efforts improves his land and spends money on his acreage, he will not be adjusted upwards. If, however, he lets it deteriorate, it does not mean he will be adjusted downwards. If because of a freak accident or hazard of nature the character of the land changes, it is open to him to look for a readjustment. An intensive investment programme on land which improves its output will not necessarily be taken into account, as clearly set out in section 2 regarding changing the nature of the land and the attraction of a higher adjustment. If, however, the Office of Public Works carries out drainage to land and improves it, then circumstances could warrant an adjustment in that acreage. Also, if the sale of land requires changes in the adjusted acreage which makes the settlement larger and if it was not adjusted before — in other words, if it was below 20 adjusted acres and somebody buys a certain amount of land which brings them above that and that land originally had not been adjusted then the whole acreage would require adjustment.
To deal with Senator Killilea's questions, section 2 sets out as concisely as possible those parameters which will be taken into account by the adjusters. Many of the problems which he mentioned are also taken into account in section 2.
The Bill states that one of the factors to be taken into account is the range of uses to which land can be put. If land is only suitable for one particular use obviously it cannot be adjusted to the same level as land which is capable of several uses. We will not be involved in adjusting land in this House today or in the future. The adjustment of land has been given over to professional people who are being asked to take on this responsibility. We have set out in the Bill those factors which have to be considered when the adjusters are in the process of visiting land and must take into account the various parameters and items listed in section 2 (2) of the Bill. In that way they will produce their evaluation of the land.
I am sure the Minister will accept that no matter what parameters and conditions are laid down to adjust acreage it will come down to a matter of opinion in the end. We do not have any specific basis on which to adjust acres. The Germans many years ago adjusted their land but it was based on a very scientific soil survey. The position with regard to the national soil survey is that the second edition has been launched but we are a long way from getting to the stage where we have any survey nearing completion which would assist the specialists whom the Minister is going to appoint in adjusting land. Therefore, it will be a matter of arbitary opinion. Arising from that there will be a massive load of appeals and vast amounts of money will be shovelled into the pockets of legal consultants representing people challenging the opinion of the specialist.
I want to put forward a few examples. In section 2 (1) the Minister refers to the range of uses to which the land can be put for the purposes of agricultural production. It is possible to have land either in one county or in different areas which is equal and an adjuster must be satisfied that these two areas are equal on the basis of the range of use to which the land could be put. If land can be used for tillage, grass production or any other purpose you can have two technically excellent farming producers, but because of quotas one can never hope to achieve the same income as the other since he cannot have access to the same enterprise.
I should like to give one example with regard to the quota on milk production. In the case of two people with land, the range and the use of which is similar, one may not have access to the kind of farm production that the other has, though he is very efficient, and he is not in a position to achieve the same income. We have consistently argued against the Bill on the grounds of equity. The Minister will come up against that problem on the ground, but there is nothing in the Bill to deal with that problem. The Minister should signal some road forward for farmers who will not be in a position to get involved in the farming enterprises from which the best income can be achieved.
I should like to make one comment on Senator Killilea's remarks about the acreage that was submitted with the disadvantaged areas. I could not agree with him more. Great anomalies arose out of that decision on eligibility. Unfortunately, we have no system of appeal to it except, possibly, within the European Parliament. Section 2, apart from the level of tax that was to be charged per acre, was the one that created the greatest amount of interest and, indeed, concern among the farming community because they did not know what norm would be used by the adjusters. Certainly, the Land Commission in the past used the term "adjusted acre" which technically was a division of the whole acreage by aproximately one-third. Throughout the country it may have been used in that way; but, whatever the fraction that was used by them in adjusting, generally speaking it was acceptable to most people in the agricultural community. They understood what a Land Commission adjusted acre was and accepted it. It was a fact of life.
On this section as I understand it from talking to people in the agricultural industry, they were as concerned as I was about using the term, adjusted acre, because it could create doubt in the minds of some people about what an acre was. The various categories have been laid down by the Minister as a guideline. On average, if all these things are taken account of — it is specified in the Bill that regard shall be had to a range of matters including access to land, the nature and quality of the soil, the location and climate of the place, whether the land is sloping or flat — we can be satisfied that what is considered to be an acre in this terminology will be an acre that is capable of producing the highest possible agricultural production. If we accept that as a principle then it will probably apply but it has caused worry to people in regard to how it will apply. They are worried about public officials visiting the farm and making decisions. Somebody has to make a decision and other sections give a person the right to appeal. We could not be fairer in trying to come down with some reason on the side of fair play. If that is done, and the acres are adjusted properly, there will be a widespread acceptance of this form of taxation, which will not be a penalty for increasing production or a disincentive to production. It could be an easy way for farmers to comply with the tax regulation. They would make a contribution to the local authority and would not have to pay somebody else to prove their case. On Second Stage I said that the vast majority of farmers I spoke to were in favour of this system of taxation. Provided the adjusted acre is seen to be fair, I think this system will be accepted; but if the adjusted acreage is used as a blunt instrument, then there will be widespread abuse of it and the whole appeal system will be clogged up. I note, however, that under another section pending an appeal the farmer will still be liable to pay the tax as determined by the officer or the farm tax commissioner. That will be a disincentive to appeal except if there are good grounds for it.
Everybody will agree with what Senator Ferris said with the exception of one point, it is all full of "ifs". All the "ifs" are based on the system of an adjusted acre being operated fairly. I asked the Minister if the Land Commission assessment of an adjusted acre will be taken into account in the new assessment of acreage. The answer I got from the Minister was quite clearly that experts would be appointed to deal with the valuations and the adjusted acreage. I must accept, therefore, that the Land Commission assessment to date will have a bearing on the matter and will have a part to play in the assessment. It is my opinion, and the view of a lot of the small farmers, that the most unfair system of the adjustment of acres in the history of the State is being introduced. That is an indication of the unfairness of the adjusted acreage system and what was done to farmers in the division of three estates in Galway — the Gordon estate at Milltown, the O'Brien estate at Barnaderg and the Coen estate outside Athenry. If anybody with a conscience tells me that the Land Commission decision on adjusting acres for those who were in for sub-division of those estates was fair then the sense of fairness is beyond my comprehension. The tragedy is that most of the experts the Minister will appoint are the former experts in the Land Commission. That frightens me quite a lot because I experienced their sense of fairness before and to me it was not fair.
Whether the land tax should be put down or not is another question. All of us can have our political opinions on that. Some of us may say it is unfair and some of us they say it is fair but the experts must be fair. They should not be the type of experts the Land Commission put on the ground in the west over the last 15 years. I am sure Senator Ferris is surprised to hear me saying that. I have named the estates in question in public. It is sad to think that the people who were supposed to be the experts in the past will now be the new experts. The Government will have an enormous number of appeals to deal with. If one says to the farmers that they must pay this tax under the Bill whether he or she agrees with it or not, I can assure the Minister, the Government, and the Seanad, that if a farmer feels his acreage was unjustly adjusted he will have no more notion of paying one shilling to the State or to the county council than a man from France, because he knows in his heart and soul that if he yields on the first occasion in the hope of compromise, honesty and integrity, he will be washing the clay from beneath his feet — he will be sweeping away the ground from beneath him. If a farmer is threatened with a year in jail, he will go to jail, because his first stand will be the essential one. There is no point in day-dreaming or believing that because a man feels that his land adjustment was unjust that he has to pay and that he will be compensated later. That will not wear with any section of the community, much less the farming community. I say that openly.
PAYE taxpayers pay their way every day.
Of course they do.
This sorts it out a little.
Some of them do not, as the Senator knows. However, that is another question. Income taxpayers do not pay their way every day.
An Leas-Chathaoirleach
Get back to section 2 please.
When the Minister for Finance, Deputy Dukes, brought out a list of all the people he had to bring to court, how many millions of pounds were they fined for not paying their income tax?
He had the guts to do it.
As regards section 2, the paragraphs in roman numerals are fine. I know the Minister probably intends to lay the basis for it here but I want him to make a commitment that the Land Commission assessment of adjusted acres cannot and will not be taken into account, because if it is it will start trouble here this very day. It is as simple as that.
I have given two instances where we have seen the Department at work: first, the headage payments in the disadvantaged areas is an absolute calamity. It was the greatest error ever made. Second, the Land Commission subdivision of land for smaller farmers on the basis of their adjusted acres has not worked out fairly and there are numerous instances of that. I ask the Minister to give a commitment today that what is in the files, documents, maps, etc. of the Land Commission, will not be taken into account in the adjustment of acres. That is the first priority. The second is in regard to experts. There are many experts — and not all of them come from the universities and most certainly they do not come from the Land Commission — who know and understand land. ACOT have plenty of them and An Foras Talúntais have fine people who understand the make-up and the fibre of land. I do not think the main thrust of this assessment should be given to former senior civil servants of the Land Commission because, in frankness, it has not worked in the past. There have been an enormous number of unjust decisions made by the Land Commission in the past and talking about them now is no good, but when preparing for the future we can gain experience from it. If the Minister gives a commitment today that the Land Commission assessment of an adjusted acre will not be taken into account as and from now, he will help to resolve the problem and start off on a proper footing.
I share the concern expressed by Senator Killilea that officials of the Land Commission would be allowed in an uninhibited and unrestrained way to adjust acres. I share the point of view he expressed about their activities in the past when considering the adjustment of acreages when it came to dividing estates. We can all cite cases where this has been done in a way that is not understandable to God or man. The Land Commission have their own ways, which have not won the confidence of the people.
I have some confidence in the Bill before us because it appears, for the first time, that a statutory obligation is being placed on the adjuster to have regard to certain matters when adjusting. In this regard I follow through the point made by Senator Ferris in relation to appeals. When land is adjusted for the purpose of this legislation, if it is enacted, then the occupier of that land should be made aware precisely of the basis upon which the adjustment is being carried out. If, at the end of the day somebody ends up with a simple statement of facts as to the adjustment, then a total disservice has been done. In my view, that person is entitled to get a very clear statement indicating precisely the basis upon which the adjustment was carried out. I say that bearing in mind the appeal procedure that is available. If the basis of the adjustment is clearly spelt out, then there will be fewer appeals and where there are appeals they will be dealt with in a more streamlined and speedier way.
I do not know whether this is a matter for regulation or otherwise, but I would like to be sure that when an acre is adjusted the precise basis of the adjustment, having regard to section 2 (2), will be spelt out.
The Minister said that we are not in the business of adjusting acres and, of course, we are not, but we are in the business of laying down the guidelines for adjusting acres. The point I am making is that in so far as regard is had to those guidelines, the occupiers should be made aware of the precise points upon which his land has been adjusted. The point has also been made by other speakers that we cannot be precise, but I think subsection (2) brings in a certain element of precision. Let us draw a comparison with the PLV system on business properties. I am not aware if there is any statutory matter to which officers of the Valuation Office must have regard. They have complete freedom in determining what the valuation of a particular premises is. So far as that is so, I welcome subsection (2) which at least puts down in statutory form certain matters that the adjusters in estimating must have regard to. The system cannot be precise. Senator Killilea said it is full of "ifs". The whole tax system and certainly the non-PAYE tax system is full of ifs. It is imprecise in many ways and that is why it is subject to so much critical comment. It is difficult to eliminate the "ifs" from the tax system but subsection (2) introduces a certain element of certainty.
Subsection (2) (v) refers to "the structure of the agricultural land holding of which the land forms part,". That I presume, means holdings which are fragmented and which are difficult to manage. My understanding is that there would be a once-off assessment, and that there would be no reassessment. I would like to know what happens in areas where a restructuring has taken place and where fragmentation has been eliminated. There are many areas where fragmentation is a major problem. In certain parts of the country one of the successes of the Land Commission — and certainly one of the successes of Deputy Connaughton, Minister of State at the Department of Agriculture — was to try to eliminate fragmentation. I am glad to see his policy is succeeding in certain areas. So far as fragmentation is eliminated and holdings are consolidated, what happens where an assessment has been carried out before the consolidation took place? If this question is not addressed we will be facing a situation which could give rise to a constitutional challenge to this legislation. It was that kind of situation which was the basis of the challenge of the PLV system. This is something on which I would like to hear the Minister's comments.
As far as I can see, this is the most contentious section of the Bill. It is a pity the Government could not wait until the national soil survey had been carried out by An Foras Talúntais because then they would have some scientific basis on which to go to adjust the acres. Naturally not alone is there concern among Senators, but concern is being expressed by farmers because once their acreage is adjusted as I see it, that is going to stick. It is one thing talking about the Land Commission adjusted acres, but those acres were adjusted for a purpose. The farmer either succeeded in getting additional land or he did not, but this is a different adjustment entirely. Now, when the acreage is adjusted, if the farmer has 20 or more of those adjusted acres, he will have to pay tax for the rest of his life. That is the fact of the matter. If he is not in a position to pay that tax, it will be levied on the land anyway according to this Bill, and his successors will eventually have to pay it. That is very wrong, too, but this is what the Bill says.
For that reason, farmers are naturally very concerned that this adjustment would be carried out properly. It will be very difficult to do it properly because there are so many different problems in different parts of the country. You have the fertile soils of the midlands and the south; you have the drumlin soils in Leitrim; you have the boggy, mountainy areas in the west; you have the fragmented holdings — and they are a particular problem in the west. You also have large tracts of land in the west held in common. The progress that I would like to see has not been made in dividing those commonages. Senator Durcan referred to a land policy coming to grips with the problem. I know of no land policy at present in the west that is helping in any way either to eliminate fragmentation or to divide the commonages that are so prevalent in Galway and Mayo.
The figures in Mayo speak for themselves.
I have particular experience of Mayo because I was partly responsible for initiating that programme there. A certain amount of progress was made during 1977, 1978 and 1979, but progress since then has been very, very slow. The same applies to Galway. There is no policy in existence in regard to the division of those commonages. It is a pity, instead of winding up the Land Commission as had been done, that the resources of the Land Commission were not applied to that problem to get it out of the way. I know from my own experience that there are many dozens of files in the Land Commission office in Galway awaiting for personnel to do the job that is to be done. That is one of the problems I see in the west in regard to adjusting the acreage.
There is a variation in the quality of soil, from one farm to another, even from one field to another. Unless every single acre is inspected and analysed, soil surveys taken and so on, then there is no way that we can accept that this system will be fair to everybody. It is a major problem and, as I said, once land is adjusted that is it. The farmers may appeal — I am sure many of them will — but it will take a long time and the process will be very slow I can envisage the whole system being choked up in a very short time with very small cash return for the Government. The whole purpose of this legislation should be to try to find an equitable system of tax, to try to bring more money into the Government's coffers. I do not think it will succeed in achieving that because this appeal system will choke up, farmers will be dissatisfied and, certainly, they will avail of the appeals system.
In the west of Ireland, also, a very large percentage of farmers are 55 years of age and over. Many are unmarried and, certainly, I cannot see those farmers developing and improving that land if, at the end of the day, they are to be penalised by having to pay tax on it. Will any consideration be given to situations like this? We have heard a great deal about taking over land from elderly farmers and passing it on to the younger generation of more progressive farmers. But land will not be put to its full productive use simply because of the system of tax we are now imposing. There is no way that those farmers who have reached the age of 55 or 60, and who in many cases have no dependants will speculate money at this stage to develop that land and by doing so have themselves penalised by this tax.
Immediately after Senator Killilea had spoken, I wanted to put the record straight. Unfortunately, the Senator went into an attack on the staff of the Land Commission. It has always been an accepted principle in this House that one should not condemn members of staff, particularly as they are not here to answer for themselves. Most of us have had dealings with the staff of the Land Commission, whether it was at Agriculture House or down in the country. I, for one, can compliment them highly on the way in which they have always dealt with any queries or problems I had.
Of course, they were subjected to political influences at times, but I have never had any experience of them succumbing to that influence. It is unfair to pick out one section of people who have been involved in adjusting acres and say that they were unfair or did it wrongly, or otherwise, in various parts of the country. The reality is that they are agents of the State, civil servants employed by the Government, carrying out policies laid down by the Government. The staff of the Land Commission always acted in accordance with the policies laid down by the Government of the day, whether Senator Killilea's Government, or any Coalition Government, or any other form of authority. They acted in accordance with the policy laid down by the Government and, if the performance of that policy on the ground did not suit a particular area, that was unfortunate. That is how it went and anybody who has had experience in the Department of Agriculture knows that. They depend on a guideline and a policy laid down by the Government.
In this section we are trying to lay down guidelines and I have the utmost confidence in whoever will be chosen to implement them. I am glad some experts from the Land Commission will be involved in this, because there is a tremendous wealth of experience there. With the guidelines laid down here I can think of nobody better able to carry out an adjustment on the ground. I also hope that the Government, in their wisdom in abolishing the Land Commission, will consider some form of land agency which will be vitally necessary to the orderly development of holdings, that there will be expertise available in that agency and that they will have some statutory rights, also. I have always advocated that within my party and will continue to do so. I am putting it on the record of the House here today, since the staff of the Land Commission were subject to criticism. I am sorry Senator Killilea is not here because I would like to have argued this further with him. I contend that officials act in accordance with policy laid down and we should not criticise them. We should criticise the policy makers, possibly.
We are now legislating and making policy today. Let us make it as fair as possible so that the people who get the job of trying to administer this on the ground will have something concise thing to work on. We must endeavour to ensure that as far as possible the various categories and classifications of land will be set down in legislation while still allowing a certain element of interpretation. We will, of course, have an appeal system, anyway. Nothing could be fairer. There is no question of penalising people for having improved their land or penalising them for increasing their production. It is a system of trying to ensure that this sector pay a contribution to the running of the State in line with their capabilities to do so. That is built into this legislation.
Listening to Senator Ferris, I regret to hear that the Land Commission have been influenced in any way. I can say, for myself——
I did not say that. I said they were subjected to political influences, but thankfully did not yield to them.
The Senator said that they were influenced.
The Senator can claim the credit for politically interfering with the Land Commission. All I am saying is that the Land Commission abide by the policy of the Government.
It was unfair of the Senator to refer to Senator Killikee's comments when he is not here. Senator Killilee is entitled to make comments. He was speaking about the criteria used by the Land Commission in their assessment that we used heretofore and I do not think he was referring to anything else. I would agree wholeheartedly with him. The Minister said 200 people will be employed, 100 from the Land Commission and 100 now under recruitment. What type of people has he now recruited or is in the process of recruiting? What were the guidelines and criteria laid down for that type of person? Had he to be an agricultural adviser or to have a degree in agriculture? What type of person will be used to assist the Land Commission in the assessment of the adjusted acre?
I do not see in the Bill any reference to islands off the west coast, unless they are covered under section 7. Reference is made to inadequacy of means of access to the land, location and climate and the nature of the soil but the Minister does not say he is specifically talking about islands when he is talking about access. I am sure the Minister knows that we have 365 arable islands in Clew Bay alone — one for every day of the year — and there are islands off the west coast of Galway and Donegal. I know the dangers involved in getting stock to and from these islands. Will those island acres be adjusted in the same way as on the mainland? That is a problem. What type of adjustment will take place or what criteria will be used for islands off the west coast? That is very important. There is a number of fragmented holdings in Clare Island, Inishturk and on Aran. It is important that we know. Section 2 (2) (c) (i) states:
if investment in the land is at a level that is higher than a reasonable level for land generally or falls short of such a level, any capacity of the land for agricultural production, or any lack of such capacity in the land, that is attributable to the part of such investment that is higher than such reasonable level as aforesaid, or, as the case may be, to the short fall shall be disregarded.
He lists down the application of fertilisers or other substances for improving the land for agricultural use and the level of general reclamation of the land. Do I take it that where there is a clearance of stones, trees, weeds, gorse and other unwanted vegetation from the land and other listed items here that will be taken into consideration? Alternatively, will this investment eliminate the people categorised here and as spelled out in the Bill?
Section 2 deals with the adjusted acre. The adjusted acre means any area of agricultural land whether equal to or greater than one acre. I should like to ask the Minister if he can give the House an indication of the scope the proposed adjusting officer will have in their adjustment of the acreage? This is a question in which every farmer will be interested. In the midlands, an area that I know best, with regard to reclaimed peatland and the cut-over bogs, Bord na Móna and An Foras Talúntais have proved that they can get a record return in pounds of beef per acre per year on their place in Clonsast. The land is pure cut-over bog. The cattle or the bulls they have there are on slats from the end of September or October until May or June. I do not know what way they are using the land, perhaps they have zero grazing. Here the land is not equal, it is not a mineral soil, and the ordinary farmer would not have the finance to follow that kind of farm husbandry. First, there is the expensive cost of the slatted unit and, secondly, the cost of the expensive machinery necessary to operate zero grazing.
If we take the Barrow valley or the Nore valley which is subject to constant flooding, or indeed the Shannon valley which covers a great part of the country, one will argue that land is submerged and flooded in many townlands for five to seven months of every year. What kind of criteria will the adjusters have and how are they to take this into account? It is very important that it should be taken into account. Up to 1977 before rates were abolished there was a very genuine complaint and grievance among farmers in those flooded areas that they did not have the use of their farms for almost half of each year and yet the rate was demanded and collected on those lands which were subject to the valuation of Griffith from the middle of the last century. I hope that the adjusting officers will take all those things into account, as well as the item enumerated in subsection (2) (a).
What kind of criteria will the adjusting officers have at their disposal? Will they have regard to the poor law valuation as applied by Griffith, or will they have regard to the national soil survey as carried out recently by An Foras Taluntais, which I think is very comprehensive? The people operating that national soil survey in the counties that are completed visited not only every farm but every field. Will they have at their disposal the records of where land reclamation was carried out with the assistance of grants from the Department of Agriculture?
The Minister said that arterial drainage and other major drainage will be taken into consideration in the future upward adjustment of this acreage. I am sure he realises where drainage is carried out all the land does not benefit uniformally. It depends to a large extent on the capillary capacity of the soil where gravity drainage is concerned and even the application of this consideration will involve great difficulty.
This section has been described by many people as being unconstitutional. The Minister has stated that professional people will carry out the adjustment, but the reason many people believe it is unconstitutional is that it is not a tangible thing. It is a theoretical measurement and really nebulous. Senator Smith said there should be a scientific basis involved but there must be something based on scientific data. Will these criteria be available to the people who own the land? In other words, if a number of groups of professional people were to value or adjust the land independently would they arrive at the same conclusion? There could be many uses of land but maybe the crops in one area would be far inferior or less beneficial to the landowner than the crops in other areas. The land of County Meath must be among the most fertile in the country and yet it is known as heavy land. If there is heavy rain during a night the land is unusable for a number of days afterwards unlike areas in the south where after a heavy downfall the land can be worked the following day. This is not possible in County Meath. Indeed, over the winter months the land, for this reason, cannot be put to its full use. Within the terms of this section the only factor that would apply in this area would be the nature and quality of the soil, and this would be a consideration, but I am not satisfied that that would be the only factor in coming to that conclusion. It seems that for this adjusted acreage, taking the very fertile land of Meath, it could not measure up to other areas where there is better drainage. Overall, taking everything into consideration, the section must be unconstitutional.
Regarding paragraph (b) of subsection (2), what is a reasonable level of investment for land generally? That is the question that adjusters and farmers and occupiers of land will be faced with. Are we talking about the norm for that particular area, bearing in mind paragraph (c) in which under subparagraph (ii) or listed eight different items which are deemed to be investment? Do we take into account the level of investment that is normal in a particular area, or on the other hand do we look to what is good husbandry or to what is an acceptable level of land maintenance generally without regard to the area concerned? That is a question that deserves to be answered and I would like to hear the Minister's response to it.
Secondly, in relation to subsection (2), am I correct in saying that when that reasonable level is determined, any works which are deemed to be in excess of that reasonable level — if we reclaim in excess of the reasonable level in the area, if we construct or maintain farm buildings in excess of what is reasonable in that area — will not be taken into account in adjusting?
We have had a long debate on this very important section of the Bill. Initially Senator Smith queried the ability of people to make expert judgments in their assessment of land and suggested that their judgment would be open to appeal and that this would result in masses of appeals. Senator Smith is making the judgment that there will be masses of appeals. He may be right. But what we have done in staffing the commissioner's office with expert adjusters, all of whom will be agricultural science graduates, whether they emanate from the Land Commission or from any other direction, is in itself a reason for one having some optimism that the job will be done properly. In that respect the farm commissioner will ensure that the adjusters will have to take into account the very detailed criteria set out in the Bill.
Senator Killilea asked me if adjustments already made by the Land Commission will stand. This job will have to be tackled afresh by these adjusters with the criteria laid down in the Bill. I hope he will accept that as a straight reply to some concern he had on this matter. I do not wish to pursue his criticism of former judgments of Land Commission staff or their operation. I have neither the expertise in that area nor indeed the knowledge of what has happened in the areas he listed to do so. However, I have full confidence that the people being recruited for this job have the necessary expertise to do the job. For the first time in any adjustment made in this country, the farm commissioner will have a list of very strict criteria which will reduce the possibility of there being great anomalies appearing from area to area or from individual adjuster to adjuster or from farm to farm in the adjustments being made.
It is reasonable at this stage to say what we think an ideal acre is. In this area we have to fall back on agricultural experts again and they agree generally that the best land in the country is in the south — the Golden Vale, the Midleton area or further south, say, in Fota Island. These areas have the climatic conditions, the absence of much frost and adequate rainfall, which results in a long and productive growing season. When these climatic conditions are combined with top soil capable of a wide range of usage and with good drainage — core samples will be taken by the trained agricultural experts — then land will come close to the best land in the country. I have no doubt that in many cases adjusters will come across land which adjusts one for one with this assessment. Whether they come across with whole farms which adjust on a one to one basis is another matter that will unfold during the classification process. There will be cases where land will look good in say, July but which could be flooded for six months of the year.
The adjusters will be trained agricultural experts. They will not be holiday sightseers who will arrive for a day, as it were, make a judgment and never be seen again. Under section 17 they are entitled, of course, to information on matters relating to a farm. This will be the farmer's opportunity to put his case in relation to his holding, such as whether it is warm land, cold land or flooded. I have no doubt that the common sense of the farmers and of adjusters will prevail and that there will be co-operation between farmers and adjusters in the vast majority of cases. I have no doubt also that there will be some who will make life a little difficult. But when it is accepted that the basis on which the adjusters operate is fair and clearly defined there will be confidence in their work. I would call on the farming community to co-operate in this adjustment. Co-operation will certainly help in arriving at a correct adjustment. If the farmer can give his opinion to the adjuster — rather than perhaps show him the gate — that would constitute a more constructive approach.
As far as the questions of subjectivity and making assessments are concerned, adjustment will be a matter of judgment, which was what Senator Smith was concerned about. He was concerned about the objectivity of the adjusters and he mentioned that, in the end, they might just make a judgment and that would be that. These adjusters will be informed, academic, knowledgeable people in the work they are undertaking. We accept this in many other areas. For example, income tax involves judgments by accountants and tax inspectors. In the case of capital taxation we accept judgments by valuers and auctioneers. We find nothing wrong so long as the judgments are informed ones and we have confidence in the people who issue such judgments.
In the final analysis — where agricultural experts disagree — there is recourse to the appeals process. It will remain to be seen whether there will be a massive volume of appeals resulting from this exercise. If there is this combination of experts doing the job with the co-operation of the farming community then the job will be done better than might be the case otherwise. The criteria laid down that and will have to be taken into account will ensure that it will be of great benefit to have all of the land of this country adjusted on the basis of such a system. For the first time this will bring a benefit to the whole of the farming community, not just on the basis of land value, but will provide a basis that was not there before and which was criticised by some Senators today.
Senator Hussey thought the national soil survey was useful and advocated that as a basis that might be taken into account. It does not constitute a suitable basis for adjusting acreages because the scale of the maps being used is not sufficiently large. The soil surveys show typical soils found in various parts of the country. But, within those areas, there can be disparities between types of soils even between one field and another. For that reason a farm by farm investigation of land must be undertaken in arriving at the adjusted acreage nationwide.
I have informed Senator O'Toole those who will effect the adjustments will all be agricultural science graduates. He need not have fears that it will be done by anybody of less than proven technical and academic ability. Senator O'Toole also inquired about the situation of land on the islands and how they will be assessed. Accessibility to land is one of the criteria which is set out in section 2 (2) (VIII). If there is this ideal acre on an island, or comprising an island, there will be costly transport involved to and from that island. That will be taken into account and that is why it is set out among the criteria to be considered in adjusting the acreages of islands. I can assure the Senator that his concern for the islands in the west and perhaps some on the Shannon and elsewhere, will be taken into account.
Senator Durcan asked about No. V of the criteria which refers to the structure of the agricultural land holding of which the land forms part. If circumstances change and the land is restructured into one holding it will be up to the occupier, owner or, indeed, the local authority, to request the classification officer to reclassify that land. Therefore if one party does not do it certainly the other will. If it is to the benefit of one party then generally it will be that party who will make the request to have the reassessment done, as was the case under the old valuation system.
I agree with Senator Fitzsimons that drainage does not necessarily bring about equal benefit to all of the land drained. I think Senators will agree that we would not have carried out so much drainage in this country if it had not been of benefit to the land. There is an improvement generally when land is drained. It will be up to the adjusters to make an adjustment on the basis of any improvement affected by way of drainage when that exceptional circumstance arises.
On question of the level of investment, the adjustment process assumes a reasonable level of investment. There can be no question of tax discouraging investment, indeed, quite the opposite. If the investment is unreasonably low the occupier will still have to pay. If the potential of the land is vastly improved by an over-investment, then that would not be regarded as reasonable. If buildings are erected on the land I do not think they would be regarded as investment in the land itself. The quality of the land having been improved or made more productive by a reasonable amount of investment, which is set out in section 2 (c) is the quality which the adjusters will have to take into account. We should not assume that any farmer can continue in business without putting back into the land the various outlays mentioned in paragraph (c). The normal use of fertilisers and other substances maintains land at a particular level of production. Therefore it is part of the normal business of making land more useful. Paragraph (c) sets out what is regarded as investment.
I have covered most of the queries. This section of the Bill, which we all regard as most important, has been set out in a way which I had hoped, would have met with the agreement of all Senators. It is an attempt to lay down criteria which would ensure that the adjusters, who are experts, would be able to take an informed and even-handed approach to adjustments and, arrive at a system of adjusted acreage which would be comparable from north to south, and from east to west, and which would be a reasonable basis for pursuing the land tax which I hope will not result, as members of the Fianna Fáil Party have suggested, in a mass of appeals coming forward. If we wait and see the result, with some exceptions there will be an acceptance of what is being done, and it will be seen that the people who are asked to do this job are doing it fairly and evenly. With the help of the farming community, we will also ensure that the land is adjusted to a level that will represent exactly what we are trying to achieve in this Bill.
Just two questions. Senator McDonald raised a very important question which the Minister has not yet answered. Where land is used for six months of the year only, would two acres of that land be the equivalent of one acre of land used on a continual basis? We have a lot of the type of land of which Senator McDonald is speaking in the west. You could not have any stock on that land because of climatic conditions during the winter; so it is only productive for six months of the year.
Will the local ACOT advisers be consulted in relation to adjustments? I take it that the 100 people mentioned will be academics just out of college without the practical experience of ACOT advisers. Indeed, will the CAO and his staff be consulted? They have a wide knowledge of the type of farming that takes place within their own county. At any time during the assessment will these officers be used on site with the farmer or indeed at all? This will have a great bearing on the adjustment. The college graduates will have no practical experience at all but will be available for appointment to the staff. This will be an opening for them to make a few pounds for themselves in the short term. To adjust an acre of varied land one would require a lot of practical experience. I would not welcome the academic, just out of college, assisting the Land Commission in the assessment of land. Does the Minister intend to take the advice of the practical agricultural instructors in each county when this is taking place?
The Minister has a reputation for being a fairly fair minded man. Perhaps he surpassed himself with the degree of infallibility he attributed to the graduates in the context of this adjustment. We are trying to assist the Minister in having a Bill passed in this House which will at least try to deal with some of the complexities of the problems that will face us as far as proper adjustment is concerned.
We do not have to go back too far to find black holes in the economy and a cock up in statistics in relation to our milk production. I am quite sure, without casting any reflection on the generality of graduates, it is more likely than not that the advice given to the AIB with regard to ICI came from graduates. I have every confidence in people emanating from our educational institutions, but for this kind of problem experience shows us there is no easy solution.
In relation to the statement which I made with regard to land capable of a wide range of usage, how can a person who cannot get a sugar quota or a beef quota compete with somebody who can or how can somebody who cannot get into milk production compete with somebody who is in it? The lack of a scientific basis for the completion of the soil survey, added to the quota system which has been introduced in farm production, makes this job extremely difficult. I am not casting reflections on the personnel who will be called on to do it, I am putting it to the Minister that there are inherent difficulties in trying to have an equitable system. The appeals will not come from people whose acreages have been adjusted on a high level. The appeals will come, on the basis of these comparisons, from individual farmers who do not have access to farming enterprises in the top earning areas at the moment because of the quota system. I am coming up against this difficulty every day and that is why I am putting it to the Minister as strongly as I can — I hope I will not be regarded as a judge — in all of these matters.
I do not share the views of Senator O'Toole and to a degree those of Senator Smith. The graduates, especially the young graduates, will be ideal persons. If I read the Bill correctly we are talking about the quality and capacity of the acre to be adjusted. People must have scientific knowledge fresh in their minds in order to be able to examine and assess the quality and capacity of the soil. I agree with Senator Smith that there is the added question for ordinary agricultural management of the various quotas, levies and so on. That is a separate question and, while it is a problem for the individual farmer, the adjusting of the acreage should be on the quality and capacity of the soil. Consider the inequalities in the old PLV system where land was £1 an acre in some areas, as low as half a crown in others and up to 25s. in others. After 100 years of erosion perhaps and the forces of different husbandaries the quality of the soil does not bear a great relationship to the valuation placed by the Griffith organisation. That is why the adjusted acre must have above all a very distinct relationship to the quality of the soil and its capacity and location.
Progress reported; Committee to sit again.