I move the Second Reading of this Bill. This Bill provides for giving legal effect to the decisions taken in the earlier part of the year in regard to the Agricultural Grant. The Grant for the current financial year will be increased to a total of £1,970,000 or £222,000 more than last year and will be applied to the relief of rates in a new way.
When the Grant first became a feature of local finance, on the establishment of county councils by the Act of 1898, the Saorstát share amounted to £599,011 and it remained at this figure until 1925 when, an equal sum being voted, the Grant was doubled. In 1931 the Grant was increased by three quarters of a million pounds which brought it to a total of £1,948,011. Each county's share was applied at an equal rate over all land valuations. The occupier who ekes out a living on a small holding got the same rate of relief as an occupier who had a holding with a poor law valuation of £300, £400, or £500 pounds a year.
In 1932, the present Government increased the relief by £250,000, which brought the total up to two and one-fifth million pounds approximately, but the relief out of the new money was confined to holdings of £10 and under and the first £10 only of larger holdings. This was the first break with the old method of a county flat rate for all holdings and was continued for a second year, that is, 1933-34, when the total amount provided was £1,750,000, the reduction of the Grant that year by £448,022 not affecting the special relief to the limit of £10 valuation.
This year, as I have stated, the Grant will be £1,970,000, which is the highest figure it has ever reached except that of the year 1932-33 when the land purchase annuities were still at the old figure. But whilst increasing the Grant a new method of giving the relief has been adopted. Last year's rate of relief on the first £10 valuation is taken as the standard rate, and the Bill provides that every occupier of land not exceeding £20 in valuation shall, in the current year, get this rate of relief, and occupiers of larger holdings shall get an equal rate on the first £20 of their holdings. To extend the maximum rate of relief up to the £20 limit will cost, we estimate, an additional sum of £116,000, and part of the new money to be provided this year goes to meet this extra cost. In the Bill the relief on the first £20 valuation is designated the primary allowance. The primary allowances, including urban district shares, will take, we estimate, £1,182,000 of the Grant and cover valuations amounting to £3,700,000.
After the primary allowances are given there will remain the part of the valuations above the first £20 and this part can get relief by way of employment allowance or supplementary allowance or both.
The employment allowance is given where one or more men were at work on the holding in the nine months preceding the 31st December, 1933. Every occupier of land over £20 valuation was asked to make a claim to the allowance in respect of men at work on his holding, and the county councils received, and admitted, claims in respect of 130,000 men—somewhat more than half being employees and the remainder relatives of the occupiers. For each man employed an abatement of the rate was made at the primary allowance rate on £12 10s. valuation, if the occupier had so much additional valuation. The employment allowances will cost, we estimate, £386,000, of which £104,000 will come out of the additional £220,000 which is being provided this year. The cost of the employment allowances, when added to the cost of the primary allowances, will absorb £1,570,000 of the Grant. There will then be a balance of £400,000.
After the primary and the employment allowances have been paid the balance of the Grant in every county will go to the relief of the part of the valuation that did not get any relief by way of primary or employment allowance, and this balance will be applied in every county by way of supplementary allowance at an equal rate over the remaining valuation, which amounts to £2,000,000. The supplementary rate of relief is everywhere below the primary allowance rate. In most counties the difference is slightly over 2/-.
This is the main outline of the scheme in the Bill. Perhaps an illustration of how it works in a typical county will make it clearer to those Deputies who are not themselves farmers, and had not, as a matter of business, to become acquainted with its working. Take a holding of £50 valuation in, say, County Kilkenny, the occupier of which has a brother and a paid labourer working on the holding. On the first £20 he gets relief at the rate of 6/- in the pound, which was the previous year's relief on the first £10. He gets relief at the same rate on £12 10s. for his brother and on £12 10s. for his labourer. That means that his rates would be abated by 6/- in the £ on £45. There is a remaining valuation of £5. On that remainder he will get relief at a lower rate of 3/10½ in the £, which is what the balance of the Grant runs to in that county.
We are now at the stage when it can be said that the new method has been successfully put into operation. It has, we recognise, involved a good deal of labour on the part of the secretaries and clerical staffs of the county councils and the rate collectors who examined claims, but this was inevitable in the initial year of the change over and the scheme, if continued, will probably work more smoothly each succeeding year.
It may be asked why do we put forward this scheme changing the basis on which the Grant has hitherto been distributed. The answer is shortly that we did not regard the old basis as any longer satisfactory. It applied the Grant in a blind, mechanical way and, except for the slight variations made in 1932 every holder, large and small, whether he used his land in a way that gave the maximum employment or gave no employment at all, whether rancher or congest, got the same rate of relief without any conditions whatever. Some of the witnesses before the Derating Commission in 1931 took the view that relief from rates should be conditional on proper use being made of the land and, furthermore, two of the Commissioners recorded their view that as soon as the State could do so the first £15 or the first £20 valuation should be exempt from rates. In the scheme in the Bill we have combined two ideas, one to provide for occupiers of £20 holdings and under and the first £20 of larger holdings the rate of relief which was allowed last year on the first £10, and the other to differentiate in the case of larger holdings between occupiers according to the extent to which the holdings afford employment. It is a common criticism of the scheme that there is not sufficient inducement to give employment. That is so. In the first year unless we were prepared to revolutionise the whole system of relief of rates on agricultural land we had to content ourselves with a gesture that would indicate the path that we intended to pursue. This Bill is the beginning of a new system but only the beginning, and landholders of the higher valuations who are not making proper use of their land would be well advised to take note of the fact that the day of unconditional relief of rates on land is at an end.
With regard to the employment allowance, I notice some of the county councils are pressing the Government to allow claims to be made for persons employed temporarily. We cannot overlook the necessity for constant employment for the agricultural labourer and give countenance to a practice, which I am told is growing, of taking on causal labour during the busy season and dispensing with it during the slack season.
The Second Schedule of the Bill shows the share of each county council in that grant. These shares have been arrived at in the following way:— Each county was allotted a sum equal to last year's share and credited with the payments that they are bound to make to certain urban districts, the whole of the additional sum required to extend the primary allowance from the first £10 to the first £20 was then allotted and the balance of the grant was divided in proportion to the claims to employment allowances. The urban districts that receive agricultural grant are those that have been created or extended since 1898. The county councils will pay these districts first a sum equal to what they paid them last year and in addition whatever may be necessary to bring the rate of relief on the first £20 in the urban district up to the county rate of relief. I may, perhaps, appropriately here add a word about these urban district grants generally because on every occasion that the agricultural grant has been increased there has been a considerable amount of pressure to extend it to all urban districts. The problem presented by these urban farmers is not quite so simple as it may appear at first glance. The point for consideration is whether there is a case for placing land in the 39 urban districts that do not at present receive any part of the grant on a par with similar land in rural areas. The exclusion of urban land in 1898 from the benefits of the agricultural grant was due to deliberate policy. Prior to 1898 oudoor relief was a charge on the electoral division and as outdoor relief was heavier in the towns than in the rural areas it bore heavily on the electoral divisions in which the towns were situated. After 1898 the charge was extended to the union and the agricultural grant was calculated as if there had been a flat union charge for all poor relief expenditure. The towns benefited by the wider area of charge and agricultural land get something extra by reason of the slightly higher rate resulting from the extension of the charge. The towns also experienced benefit when, on the county schemes coming into operation, the county at large superseded the union as the area of charge. As a rule, land occupiers in towns are not assessed on the full valuation for all rates. In most areas a differential scale prevails by which land is relieved of three-quarters of the town rate.
Land in towns has a higher valuation due partly to proximity to markets. It is probably true that improved transport has neutralised some of the benefit of proximity but as against this it must be remembered that with an increasing population the value of land in urban areas tends to increase. We see urban councils called on to pay more than £100 an acre for land required for housing and of course if you give further relief to land in towns you enhance the value of the land. In some of the boroughs and urban districts—Dun Laoghaire for instance—it would be hard to justify further relief to agricultural land. By giving special relief you are in fact encouraging land owners to withhold land from building. It is proposed to continue the system by which an abatement of rates may be given partly by means of credit notes. It has been found in some counties that a credit note is an incentive to ratepayers to pay their rates within the financial year. In most counties the supplementary allowances will, this year, be given by means of credit notes that expire on 31st March, 1935.
I would say in conclusion that at one time I had hoped to present this Bill earlier in the year. But it was not possible to make a satisfactory allocation of the money to be voted until we knew what would be the cost of the primary allowances and employment allowances in every county, and before this information could be ascertained all employment allowance claims had to be examined. About 130,000 persons, relatives and employees, were returned as at work and it was some time before claims could be certified and the allocation of the Grant completed. The Bill, however, is temporary and applies to the present financial year, and, although it is not now possible to alter it radically, the Dáil will have an opportunity of considering a permanent measure which I hope we shall be able to present early next year.