Can I get a statement from the Minister as to what the Revenue Commissioners believe is "reasonable access to the public".
SECTION 20.
Question proposed: "That section 20 stand part of the Bill."
I will have to take advice in relation to that, if the Deputy will bear with me for a second.
I remember that between the publication of the Finance Bill last year and Committee Stage, in a former guise we suggested some amendments to what "access" was on behalf of the tourist organisations and Bord Fáilte. If I am not mistaken, that was incorporated into the relevant section last year concerning "reasonable access" which would make it more reasonable, let us put it that way. Some of the Minister's officials might confirm that. I think that Bord Fáilte and some of the tourist organisations were pretty satisfied about it. However, I agree with Deputy McDowell that we could perhaps have it clarified again.
Must it be commonly advertised, and is there reasonable access? That is the point, really.
What I have here might be of assistance to the Deputies. Whether reasonable access is afforded to the public will be examined by the Revenue Commissioners by reference to the facts of each individual case. Section 19, however, requires that the following minimum obligations must be satisfied. First, the access to the whole or a substantial part of the building/garden must be available at the same time. Second, the access is afforded for a period of at least 60 days in any one year, including not less than 40 days during the period 1 May to 30 September, at reasonable times and in a reasonable manner subject to any temporary closures necessary for repair, maintenance and restoration work. So, it is obviously not from 10 o'clock at night until 6 o'clock in the morning.
Third, the daily viewing times must be at least four hours. Fourth, the admission price, if any, must be reasonable so as not to preclude the public from seeking access to the building/garden. I would think that that would be anything between £1 and £5, that kind of order. That is just my own personal view.
In addition to meeting the requirements regarding reasonable access set out above, claimants for tax relief under sections 19 and 29 must also advise Bord Fáilte regarding access to the approved building or garden in the manner set out below. In respect of qualifying expenditure incurred in a chargeable period claiming on or after the date of passing of the 1994 Finance Act, the claimants for section 19 relief must, by 1 January in a specified manner in a specified period set out below, advise Bord Fáilte regarding first the name, venue and address of the approved building and garden and the days and times and so on. I will circulate these for you if you wish. In other words, it is essential tourism related information.
Section 19 was introduced in 1992 so that expenditure on significant buildings would be tax allowable. The changes concerning reasonable access were all incorporated at that time and have been worked on since. What is the major change in this section that was not covered by section 19? It is not even clear from the explanatory memorandum. Has something turned up in the meantime that section 19 did not cover, because the whole purpose of section 19 was to get over this problem? It was a good idea to allow as a tax relief the expenditure incurred on these significant buildings. Even from reading the explanatory memorandum I am not sure why it was necessary to have this additional section.
The material change this year is to facilitate the "hidden Ireland" type houses which were running a bed and breakfast operation, so they would qualify if they were deemed to be a heritage house also.
They would not have qualified under the other provision?
No, they would have had problems with access.
Question put and agreed to.
NEW SECTION.
I move amendment No. 31:
In page 47, before section 21, to insert the following new section:
21. Section 22 of the Finance Act, 1974 is hereby amended
(a) in subsection (2) by the substitution of ‘six years' for 'seven years', and
(b) by the deletion of all words from and including ‘Provided that' down to the end of the section and the substitution of the following:
‘Provided that as respects the first year of the aforesaid writing down period the writing down allowance to be made under this subsection shall be of an amount equivalent to 50 per cent. of the capital expenditure required as aforesaid and, as respects the last five years of the said writing down period, the writing down allowance to be made under this subsection shall be of an amount equal to 10 per cent. of the said capital expenditure.'.".
The Minister will be aware that in the last few weeks the Minister for Agriculture, Food and Forestry issued a press release stating that notwithstanding that the RPS control measures for farmyard pollution operated by his Department was a good scheme, given the moneys available in 1994 and 1995 it would not be possible for it to continue, so a ceiling would have to be introduced. My party's spokesperson on Agriculture, Deputy Cowen, has said a great deal about this.
My proposal, in recognition of the problem encountered, is to put a section into the Finance Bill to give accelerated capital allowances for farmers who undertake expenditure to control pollution. A number of years ago there were accelerated allowances in a variety of areas. I am in favour of streamlining them and it was a good idea to have a programme over a period to provide a basic way of do this.
A problem has arisen here and will be exacerbated by the financial restrictions on this new EU scheme. I propose an accelerated system of capital allowances for farmers who undertake expenditure in this area. The amendment allows the person to write off 50 per cent of expenditure in the first year and ten per cent on a straight line basis over the next five years. This is to encourage farmers to undertake pollution control and is in recognition of the changes which must be made to the scheme of the Minister for Agriculture, Food and Forestry.
As everyone will agree, the control of pollution is a desirable objective, not only from an environmental but even from a commercial viewpoint, if one considers the tourism industry. This gives a tax break of accelerated capital allowances in the first year and there is only a timing change in loss of revenue to the Exchequer. The Minister may be able to agree with the amendment; I have not calculated the impact but I suggest the cost would be small.
The Deputy is correct in saying he has argued against the other provisions of accelerated capital allowances, which caused a considerable erosion of revenue in the past. Their elimination has resulted in much firmer flows of revenue to the Exchequer, which enabled us to reduce taxation generally, not necessarily in the direction or with the speed some would like but nonetheless there was a reduction.
The Deputy queried the cost. Our calculations are that the cost to the Exchequer in the first year is £6 million, based on our information. I am opposed to this amendment, firstly, on cost grounds and, secondly and more fundamentally, because although the Deputy is attempting to confine the provision specifically to the cost of pollution control in the agricultural sector, it would inevitably lead to enormous pressures to restore accelerated capital allowances elsewhere. It would be a reversal of a policy and would lead to expectations. Successive administrations, including administrations of which the Deputy was a member, have argued strenuously and successfully to eliminate accelerated capital allowances and it would be a reverse step and a wrong signal. I do not think the farming community needs it.
I support this amendment and urge the Minister to rethink. In recent years the awareness of pollution control in agriculture has risen dramatically. We all welcome that. Investment is needed and that is not easy to achieve, as the Minister knows Given the importance of our industry, and those involved in it, we must maintain that position.
The suspension of the farm pollution scheme has been a serious blow. I worry we will create a gap in the flow of investment that was occurring into working with and preventing pollution at all levels on farms. The amendment is specific and confined. Notwithstanding the Minister's reservations on pressures coming from elsewhere, there is a legitimate, obvious and beneficial reason for it as the pollution goes beyond farming — it has a major impact in tourism, for example. This amendment goes to the root cause of some serious pollution.
The cost involved, as the Minister said, is about £6 million, but the benefits are far greater than the cost and the loss. It would not have to remain in place permanently. It would be a clear signal of the Government's intent to recognise the difficulties that exist and encourage continued substantial investment in the control of pollution. I would hate to see the gains made slowed down. I urge the Minister to accept this confined amendment.
I support Deputy McCreevy who agreed to table this amendment at my suggestion. The Minister may not be aware but it does not add a penny to a farmer's bottom line whether pollution control measures are put in or not. Many farmers are demanding that this work be done because they recognise as producers that we need a proper environmentally friendly farming industry to penetrate the markets we are seeking.
The Minister has indicated in his response that farmers do not want it — farmers are crying out for it. We have put in place what was to be a multiannual control of farmyard pollution scheme, totalling for on-farm investment schemes £195 million over five years. That scheme was suspended after six months and there has been an outcry. It has been suspended because the demand greatly exceeds the funds made available for it. That demand came from people who will be getting grant-aid and providing their own resources to provide the environmentally friendly farming the Minister and the Government want.
We do not have sufficient funds from the on-farm investment scheme and there is a need to meet the demand. I cannot understand why if the figure is as low as £6 million this year. That is a small price to pay. Other Departments will hand out more grant-aid for little return. In this case people are prepared to delve into their own pockets. This is not simply an added item for many farmers but a viability issue. Many smallholders with reasonably small milk quotas and acreage have to get this work done in order to qualify for the REP scheme. This £250 million programme is available for farmers for the next five years but they will not be eligible if they do not get pollution control work done.
Rather than listening to the bottom line-£6 million argument in the Department of Finance, the Minister might broaden his horizons and acknowledge that, because the Government is unable to meet the commitment to the on-farm investment scheme, this work has to be done and cannot be deferred. At the end of the year, £6 million is very little in the context of overall expenditure and much good work will be done for the £6 million. Farmers who are currently being told there is no future in grant aid will have a way around that problem. If the Minister had sufficient money from Structural Funds he would be handing it out over the table today. The fact is that the demand from farmers exceeds the supply of money. We are simply asking the Minister to give it out in another way. This method is ring-fenced and does not raise expectations in other areas. It meets a specific case. Many farmers throughout this country await a positive decision from our deliberations, if not today certainly on Report Stage, when the Minister will have a better chance to look at it.
A cursory conversation with his colleague, the Minister for Agriculture, Food and Forestry, will confirm that this would be of great assistance to him in trying to meet the demand. It is simply chaotic at the moment because 20,000 farmers have applied for this scheme. Some 40,000 farmers are waiting to get into the rural environmental protection scheme. Some £250 million is available to this country but we will not have access to it unless we get the pollution control work done. I ask the Minister to be slightly more supportive of the principle, given that the Government is not able to provide the money itself. We are not even meeting the commitment in the Programme for Competitiveness and Work to allocate £235 million to on farm investment but are £40 million or £50 million short.
The demand for this scheme has exceeded all expectations and we need to deal with this problem in the Finance Bill. If we do not, we are not deferring investment but attacking the viability of many small and medium sized holders throughout this country who will not be eligible for REP as a result. It will be the best £6 million the Minister will spend this year when one considers the multiple demands on him and the need to maintain expenditure and not reduce revenue. I ask the Minister to examine this, to talk to his colleague about it and come back on Report Stage with a more supportive tone. If he wants to consider some amendments in terms of the 50 per cent up front in the first year, we can do that but this issue will not go away. It must be addressed. The Minister's colleague cannot handle this because he does not have the funds. The only person who can handle it at this stage is the Minister through this Finance Bill. I ask him to have a hard look at it and come back to us on it.
I have a certain sympathy with the amendment although the case is not as black as Deputy Cowen painted. I understand that up to the end of the year there were 18,500 applications for the prevention of farmyard pollution grants. In most counties applications up to the end of December have been approved. They will be paid the grants due when the work is completed. Applications since then have been suspended because not enough money was provided in the past year to cover the number of applications.
The pattern of farming has changed over the past ten to 15 years and the potential for farmyard pollution has become a major issue. The majority of farmers have taken steps to avoid it. Ten to 20 years ago livestock was fed or foddered in fields and we moved from that to loose housing with straw which did not cause pollution because bedding was spread on the land in the spring. We now have tanks under slatted sheds and that is where dangers arise. I have sympathy with the amendment. Perhaps the Minister might look again at it before Report Stage.
I was going to comment somewhat irreverently, that the reference to Sandymount by Deputy McCreevy reminds me that agriculture has been completely wiped out in my constituency.
Chairman
I thought there were still a few piggeries there.
What does the Minister propose to do about it?
I support the amendment tabled by Deputy McCreevy. As Deputy McCormack said, the system of farming has changed with slatted units, silage and changes in systems. Pollution is being caused by run-off from silage pits and milk spillages, which are a greater pollutant than anything else, including silage. From my professional experience dealing with clients, I find that most wish to clean up the environment. We hear a lot about the money farmers make, and thankfully their income position has improved over the past few years. They are willing to carry out the necessary work to improve the environment.
The capital expenditure required is large. There are large farmers who make a considerable amount of money, but most just make a good living wage. If this work must be carried out, they need greater capital allowances. There is a misconception that they put this money into their pockets and use it to go on holiday to the Bahamas, Barbados and such places.
Guadeloupe.
I do not believe there was a farmer on that trip.
The socialists were sunning themselves in Lisbon that week.
The cessation of the pollution control grants has been a blow to those anxious to carry out this necessary work. I ask the Minister to see if he can do anything to help farmers to do the work. It is not for the benefit of the individuals concerned, but for the country.
It is self-evident that rural Deputies are better versed in the agribusiness context of this issue. I will not pretend to match their knowledge. I will speak, as Deputy Cowen suggested, to my colleague about how to unlock money which might not otherwise flow. The overall tax take from farmers is still relatively low. There was a 30 per cent improvement by my predecessor last year in this regard when the accelerated capital allowances were reduced from ten to seven years. There is no such provision for industry in relation to pollution. Notwithstanding that, the arguments seem to have substance and I give an undertaking to look at this in the context of how to unlock moneys which might not otherwise flow. I do not have enough information on this issue, therefore I will speak to the Minister for Agriculture, Food and Forestry, Deputy Yates. However, I do not want to give false hopes.
Mr. Yates is the farmer's friend.
I am amazed as to how the cost could be £6 million in the first year because the expenditure could only occur from day to day. It could be £6 million in 1995 because expenditure would only occur from now and would not be included until a future tax year.
This is related to a timing difference, as far as the Revenue Commissioners are concerned. The cost of the expenditure will be written off over its lifetime, so there will be a cost to the Exchequer in that regard. It is a timing difference as far as loss of revenue to the Exchequer is concerned. I accept what the Minister said about the section. There is merit in the proposals, as Deputy Cowen and others said.
Amendment put and declared lost.
I move amendment No. 32:
In page 47, subsection (3), to delete lines 48 and 49, and in page 48 to delete lines 1 to 42 and substitute the following:
"(4) For the purposes of subsection (3), ‘qualifying farmer' means an individual who—
(a) in the year 1993-94 or any subsequent year of assessment, first qualifies for grant aid under the Scheme of Installation Aid for Young Farmers operated by the Department of Agriculture, Food and Forestry under Council Regulation (EEC) No. 797/85 of 12 March 1985, or that Regulation as may be revised from time to time, or
(b) (i) first becomes chargeable to income tax under Case I of Schedule D in respect of profits or gains from a trade of farming for the said year 1993-94 or any subsequent year of assessment, and
(ii) has not attained the age of 35 years at the commencement of the year of assessment referred to in subparagraph (i), and
(iii) at any time in the year of assessment so referred to
(I) is the holder of a qualification set out in the Sixth Schedule to the Finance Act, 1994, and, in the case of a qualification set out in subparagraph (c), (d), (e), (f) or (g) of paragraph 3, or in paragraph 4, of the said Schedule, is also the holder of a certificate issued by Teagasc The Agricultural and Food Development Authority (referred to subsequently in this paragraph as ‘Teagasc') certifying that such person has satisfactorily attended a course of training in farm management, the aggregate duration of which exceeded 80 hours, or
(II) (A) has satisfactorily attended full-time a course at a third-level institution in any discipline for a period of not less than 2 years' duration, and
(B) is the holder of a certificate issued by Teagasc certifying satisfactory attendance at a course of training in either or both agriculture and horticulture, the aggregate duration of which exceeded 180 hours,
or
(III) if born before the 1st day of January, 1968, that such person is the holder of a certificate issued by Teagasc certifying that such person has satisfactorily attended a course of training in either or both agriculture and horticulture, the aggregate duration of which exceeded 180 hours:
Provided that where Teagasc certifies that any other qualification corresponds to a qualification which is set out in the said Sixth Schedule, that other qualification shall, for the purposes of this subsection, be treated as if it were the corresponding qualification so set out.".
Does this amendment replace the section in the Bill?
Yes.
Is this the new section or an addition to it? What is its purpose?
This amendment is as a result of consultations with the farming organisations. Its purpose is to extend the scope of the enhanced stock relief which is being made available to young trained farmers under section 21 of the Bill. I proposed in the budget that the special relief should only be available to farmers who qualified for the scheme of installation aid for young farmers. Following representations from the various farming organisations, it was believed this would be too restrictive because of employment criteria inherent in that scheme. The qualifying criteria for the enhanced stock relief were relaxed in the Bill as published after negotiations with the organisations.
The condition to be met was that the farmer should first become chargeable to tax in respect of his farming profits for 1993 and 1994 or a later year. It appears there are certain cases which would have qualified for the enhanced stock relief under the more restrictive installation aid criteria, but who failed to qualify under section 21 because they had been farming prior to 6 April 1993. The amendment will cater for this latter group. I am providing alternative criteria whereby a young trained farmer can qualify for the enhanced stock relief and this can be done either by one of the following: qualifying for grant aid under the installation aid scheme in 1993-94 or later, or, alternatively, first becoming chargeable to tax on farming profits in 1993-94, the existing condition in section 21 of the Bill as published. Changes are effected by converting the existing definition of "qualifying farmer" into a new subsection, subsection (4), and incorporating the installation aid alternative into paragraph (a) of that subsection. It is a relaxation of what we were doing.
The amendment makes it more liberal to get more young farmers to qualify. As regards farm stock relief, the 25 per cent for ordinary farmers will last for another two years at least and the new stock relief for new farmers will last until 1999. This is more liberal than originally intended and, therefore I welcome it.
How much would it cost if this was backdated to 1991-92, when self-assessment came into operation, especially with regard to some young farmers who may be only in their mid twenties?
They would be very slow young farmers. I will get the answer for you as to how much it would cost. This was designed to help people in their start-up periods. The Deputy is suggesting that this should be applicable to somebody who is three years up and running.
Three years up and running is not very long in a farming operation, especially if a person has to put up new buildings or buy stock and machinery. In a number of cases this had to be done because older people who were running operations did not have developed systems. Therefore, when young people, who acquired all the necessary qualifications set down here, took over the farms, they had to go into heavy debt to develop them and make them viable operations. Would this proposal cost much?
I will get information on this. I am told they received 100 per cent up to recently, so there is only a small gap now.
I welcome this. I am sure Macra na Feirme has been in contact with the Department and I have had many discussions with it. When the Bill was first published, it was very pleased with this section. Young farmers need a great deal of encouragement. The age profile in farming needs to come down substantially. I am glad young farmers are being recognised by the Minister. I think the IFA does not do enough for them. Its eye is often off the ball. This may be due to pressure. I am glad to see the role played by Macra na Feirme being recognised.
If farming is to survive and become the business in real terms on the farm that it now must be, we need to have skilled and well trained farmers in control. It is no longer a question of farming on the farm. Farming is a business and must be run as such and there are many different areas involved in it. I encourage the Minister to do anything he can in this regard, as he is doing here. He should keep a listening ear open to Macra na Feirme and the advancements it wants to make. This is certainly an encouragement to it.
I wish to withdraw my request to the Minister.
Amendment agreed to.
Section 21, as amended, agreed to.