Dáil Éireann Debate, Tuesday - 9 November 2021
72. Deputy Richard O'Donoghue asked the Minister for Finance if landowners with trees that need immediate solutions will be entitled to tax deductions; and if he will make a statement on the matter. [54776/21]
View answerI ask the Minister to note that forestry is the easiest solution to sequester carbon. What financial solution will be offered to foresters who are affected by ash dieback? Landowners were advised by Teagasc to leave conventional farming and to use an ideal solution for farming in ash, oak and elder. These were the hardwoods recommended by Teagasc.
I know the Deputy's question relates to farmers or foresters who sell their trees for profit and whose trees have become damaged or diseased. As he said, there is a particular issue with ash dieback disease, sometimes referred to as chalara, which is of particular relevance to his question. Profits or gains from the occupation of woodland in the State, which is managed on a commercial basis and with a view to realising a profit, are exempt from income tax and corporation tax under section 232 of the Taxes Consolidation Act 1997. It follows that the issue of a tax deduction is not relevant in such circumstances because the income is already exempt from income and corporation tax. With regard to section 232, forestry plays a key role as a carbon sink, helping to mitigate the increase in greenhouse gas emissions from other sectors of the economy. It is capital-intensive investment with costs front loaded. Compared with other industrial sectors, it has a relatively long period before returns are realised.
The Department of Finance reviewed all of these schemes in 2006 and these issues were again looked at in 2014. An exemption from capital gains tax, under section 564 of the Taxes Consolidation Act 1997, is also available to an individual in respect of gains realised on the disposal of woodlands, to the extent those gains relate to standing timber. Any gain attributable to the underlying land is subject to capital gains tax. In certain cases of tree farming, which do not amount to occupation of woodlands, the exemption in section 232 does not apply. In these cases, a tax deduction may apply where immediate solution costs are incurred wholly and exclusively in respect of the trade.
Non-tax measures on forestry generally and ash dieback disease are, of course, matters for the Minister for Agriculture, Food and the Marine and I understand he has put in place a support scheme for plantations affected by ash dieback, known as the reconstitution and underplanting scheme, to assist farmers and foresters with site clearance and replacement of affected crops.
Ash dieback is a disease that affects ash trees. Ash plants imported into Ireland from Holland were diseased. This ash dieback has destroyed the ash plantations in Ireland. Initially, an income was guaranteed for 20 to 25 years. At ten years, the trees sequester carbon. Ten trees equals 1 cu. m, which would be a yield of €60 per cubic metre. Ash butt is used for making hurleys and is worth €450 per cubic metre. This equates to a loss of €6,000 per cubic metre. In 2009, concerns were raised that ash dieback was imported into Ireland and highlighted to the then Minister, but it took two years for Teagasc to confirm ash dieback. It was brought to the attention of the Department of Agriculture in 2011 which said it could not do anything, as it was unable to stop the plants coming in from Holland, it being an EU member. This was brought to the Department in 2011. The Government held its hand up, under a Fine Gael-led Minister, and said it could do nothing.
However, we have acted. Ash dieback was not a regulated disease in the European Union when it was detected here and as I understand, it is still not a regulated disease in the EU. Ireland and the United Kingdom were the first countries to introduce emergency national legislation to restrict the impact and import of ash plants from other member states. The then Government acted to restrict the arrival of these trees into our country and prevent the kind of harm to which the Deputy is referring. A scheme is in place to assist foresters who are coping with the cost of this. The scheme depends on how much land somebody has and the degree to which he or she is affected by this matter. However, it is there and I understand approximately €2 million to €3 million was set aside per year to deal with the costs to which the Deputy is referring.
In 2011, the then Minister for Agriculture said he could not stop the import of plants from Holland as it was a member of the EU. However, it was stopped in 2012 by a statutory instrument in the Oireachtas, but it was too late.
The disease was already here. The Forestry Act says that the Minister has a duty of care to protect from diseases and pests from abroad. The people of Ireland were let down by the Government. Land needs to get back into production. The scheme to which the Minister refers provides €1,000 per acre. Yet, it costs them between €3,000 and €12,000, depending on the plantation.
Currently, it is costing the taxpayer millions of euro to try to eradicate Chinese knotweed. We are now importing peat from anywhere and everywhere. Bark beetle in pine trees is rampant in Scotland. This was under the Minister’s watch. The then Government was told in 2009. In 2011, it decided to act. In 2012, Oireachtas introduced an instrument. The then Government decided that under an instrument it was going to stop. The Government has let the foresters down. Has the Government told Europe that we do not have the forestry that they are talking about?
Everything from the Deputy is always about blame. It is always about blaming somebody.
Man up and take the blame.
It is always about blame. It is the same old song from the Deputy, regardless of the topic. What I am doing is pointing to the action that we have taken. I am pointing to the legislation that was brought in by the then Government. It was one of the first Governments to bring in legislation to restrict the import of these trees into Ireland.
Three years later.
I am pointing to the cost in relation to this. I am informing the Deputy for the third time of the scheme that is in place there to help those whose trees and forests have been afflicted by this disease. Of course, it is also the case, and he may or may not be aware of this, a planting grant is available, which can cover up to 60% of the afforestation grant to help foresters with the cost that is involved in reseeding and replanting-----
They get no income for 20 years. This scheme will not pay them for another 20 years.
The Minister is to be allowed to speak.
A Leas-Cheann Comhairle, that is the proper record of what we have done. The then Government recognised this as an issue. As I have outlined, though the Deputy has little interest in hearing it, the supports and schemes that are available to help foresters deal with this issue.
