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Dáil Éireann díospóireacht -
Wednesday, 25 Nov 1964

Vol. 213 No. 2

Rates on Agricultural Land (Relief Bill, 1964—Second and Subsequent Stages.

I move that the Bill be now read a Second Time.

The Minister for Finance in his Budget Statement last April announced that the Government had decided that additional rate relief on agricultural land to the extent of £1.4 million should be granted. The purpose of the present Bill is to give legislative effect to the Government's proposals. The Bill will apply to the three financial years ending on the 31st March, 1967, and will increase the primary allowance from 70 per cent to 30 per cent of the general rate in the £ on land valuations up to £20 and on the first £20 of higher valuations. It will also increase the supplementary allowance on land valuations over £20 from 25 per cent to 30 per cent of the general rate.

The effect of these increases will be that the agricultural grant will total approximately £11 million in the current financial year.

The grant was originally given under the Local Government (Ireland) Act, 1898, as a fixed annual subvention providing a flat rate of relief on all agricultural land in county health districts. The basis of distribution and the total amount of the grant were varied under a number of enactments, but between 1898 and 1946 the amount of the grant was always a fixed amount, stipulated by each successive Act.

The Rates on Agricultural Land (Relief) Act, 1946, changed this basis. It related the amount of the grant to the rates actually levied on land by county councils. The Act provided that the grant would represent the sum needed to give relief of rates by way of a primary allowance amounting to three-fifths of the general rate in the £ on the land valuation up to £20, a supplementary allowance of one-fifth of the general rate in the £ on the land valuation over £20 and an employment allowance calculated at the rate of 10/- in the £ on the land valuation over £20, subject to the limitation that this allowance should not exceed £6 10. 0 for each adult workman employed on the holding during the whole of the preceding calendar year. The agricultural grant was continued on this basis until the passing in 1953 of an amending Act which, as subsequently extended, applied to the nine financial years which ended on the 31st March, 1962. That Act left the primary allowance unchanged, abolished the supplementary allowance and provided for an employment allowance of £17 in respect of each qualified workman, subject to the limitation that the total of the employment allowances would not exceed the rates on the land valuation over £20. The Rates on Agricultural Land (Relief) Act, 1962, stepped up the primary allowance from 60 per cent to 70 per cent of the rates on land valuations up to £20. It revived the supplementary allowance and fixed it at 25 per cent of the general rate on land valuations over £20 and it left the employment allowance unchanged.

The total amount of the grant increased from £2.91 million in 1946/47 to £5.84 million in 1961/62, £8.53 million in 1962/63 and £8.95 million in 1963/64. The increase in the primary allowance to 80 per cent of the general rate, provided for in section 3 of the Bill, will cost an additional £994,000 and the increase in the supplementary allowance to 30 per cent under section 4 of the Bill will cost £375,000 extra bringing the total grant for the current financial year to an estimated £11.14 million. The increased grant will have the effect of reducing the net rates leviable on agricultural land in the current year to less than the 1956/57 level.

Of the total amount provided for the relief of rates on agricultural land in the current year the primary allowance will absorb an estimated £7.95 million. More than 77 per cent of all rated holdings of agricultural land in the State have valuations of £20 or less and under the proposals in the Bill, 80 per cent of the rates on these holdings will be borne by the Exchequer.

The Exchequer will, this year, bear more than 63 per cent of the total rates on land in county health districts as against 57 per cent in 1963/64 and 45 per cent in 1956/57.

This Bill has some interesting facets in it and we are in favour of it. However, while the Bill now proposes to derate holdings of under £20 to the extent of 80 per cent, I suggest we ought to derate these holdings altogether, simply eliminate them. This would greatly simplify the collection of the rate. When more than 77 per cent of all rated holdings of agricultural land in the State have valuations of £20 or less and when we are already meeting 80 per cent of the rates on these holdings, it seems to me to be spoiling the ship for a ha'p'orth of tar. The simplification of rate collection which would result from eliminating the remaining 20 per cent would, I think, commend itself to most Parties in the House. It will certainly come, and the difference involved in postponing it for one or two years should suggest to us all that we might as well not make any more bites of this cherry but derate all holdings of under £20 in valuation.

Does the Deputy mean that an increased amount should be made available from the Exchequer to do that?

Yes, it should be made available by the Exchequer. Since 77 per cent of the agricultural holdings are under £20 valuation and there is only 20 per cent of those left, it is hardly worth collecting.

The only reason I asked the question is that I thought the Deputy might mean it might be borne by the other ratepayers.

No. The sensible thing to do would be to derate the holdings under £20 and place the burden on the Exchequer. That burden is not insubstantial. I want to draw the attention of the House to the facts revealed by the Minister's speech. The total amount of the agricultural grant has increased from £2.91 million in 1946/47 to £11.14 million now. That includes, of course, a growing degree of relief for agricultural land but it also reveals the staggering rate at which the rate burden is rising in rural Ireland.

We are all inclined in this House, certainly I am, to think of rural Ireland as consisting exclusively of farmers, large and small, but I am a shopkeeper in rural Ireland as well as being a farmer and I live amongst small shopkeepers and householders in a country town. I represent a constituency in which there are four or five medium-sized towns and a very large number of smaller towns, in all of which there are people struggling to keep little family businesses together or trying to maintain a home. For all of these people, the burden of rates is piling up steadily and when we from time to time pass legislation here taking over under the central Exchequer, parts of the burden on the land, we are only too prone to forget that that does nothing to relieve the residents in rural Ireland who live in towns and villages.

When we advance on the road of completely derating small holdings and substantially relieving the rates of larger holdings, we are forgetting a quarter of the population of rural Ireland, that is, people who have a home or a small family business who I suggest to the House are now suffering a virtually intolerable burden to which sooner or later we shall have to turn our minds. I think this is the appropriate time because as we provide legislation to relieve agricultural land of rates, we reach the stage where the Minister for Local Government concludes his speech by saying:

The Exchequer will, this year, bear more than 63 per cent of the total rates on land in county health districts as against 57 per cent in 1963/64 and 45 per cent in 1956/57.

Above that, he says:

More than 77 per cent of all rated holdings of agricultural land in the State have valuations of £20 or less and under the proposals in the Bill, 80 per cent of the rates on these holdings will be borne by the Exchequer.

That creates the impression in the minds of a great many Deputies that the rate burden is now being substantially taken over by the central Exchequer.

While that may be true in respect of agricultural land, with special reference to the small holdings, it certainly is not true of the residents of small towns and villages and we are allowing the rate situation to get out of all control. There are some counties in Ireland today levying rates of £3 in the £. When we think of a person operating a small shop in rural Ireland, who has a wife and children, doing his best to make a living with a valuation of maybe £10 on his house and property, and realise that the increase in the rates from 20/- in the £ to £3 in the £ has imposed upon that man a charge of 10/- a week, then we appreciate that is a very formidable burden, and I think if anybody brought into the House a proposal that we should levy a tax of 10/- a week on them all there would be a revolution. These are decent people. They are hard working people. They have families to raise and make provision for and I want to avail of the occasion of this Bill to say a word on their behalf.

I want to suggest to the Minister that these people are being squeezed out of existence and the impact of the growing rate burden upon them is becoming out of all proportion to the burden borne by anybody else. We sometimes are inclined to say: "Look at the people in the city of Dublin or the city of Cork. Look at the rates they have to pay and look at the relatively large valuations upon which they are paying them". What we forget is that the person who is paying rates on a valuable property in the city of Dublin has an advantage because every year he pays the rates the capital value of the premises on which he pays them is sky-rocketing. But take the person with the small shop in Clones, Monaghan, Castle-blayney, Carrickmacross or Ballybay, on whom the rates continue to rise and who has no corresponding capital appreciation in the value of the premises on which he is paying rates. If he tries to sell he very often finds it extremely difficult to get a buyer because the small country towns are not showing any tendency to expand. On the contrary. With improved transport facilities the custom and trade tends to move more readily into the larger centres.

I make two suggestions to the Minister. When we reach the stage of derating up to 80 per cent the holdings under £20 valuation, and when we realise these holdings represent 77 per cent of all the holdings, does he not think the time has come to finish the job? The second suggestion I make is that, while it is a good thing to face the fact that small agricultural holdings can no longer bear the burden of rates, as rates are today and threaten to continue, that proposition is equally true for the small householder and the small business man in the towns and villages up and down the country. Sooner or later that fact will have to be faced, but, in the meantime, if we again turn our backs upon the problem, there are small people in the towns and villages of rural Ireland who will be crushed out of existence.

I have always been obsessed since I came into this House by the tendency which grows upon us all to think of problems globally and forget the impact on obscure individuals who are our neighbours. There is no use telling a person who is driven out of his business, who ceases to be independent and has to go out and look for a job in middle age because the little business will no longer bear the burden of growing costs, that you cannot have omelettes without breaking eggs. That is a very nice theory, provided you are not the egg. We should be constantly vigilant in this House that we do not approach this problem with that philosophy. This is a small enough country and we are close enough to one another to be solicitous for the individual as well as for the majority.

I invite Deputies on both sides of the House to join with me in putting a case to the Minister for the householder and the small business family in rural Ireland, the small shop run by a widow woman or by a small family working together. These people are being crushed out of existence by the burden of rates. We acknowledge that it is necessary to lift 80 per cent of the rate for the small farmer. When are we going to do something of the same kind for the small shopkeeper who is entitled to get his living in rural Ireland as well? If the Minister is not in a position to say that he has any proposals to make about that now, it would be a help if he were in a position to say that the Government are sympathetic to that view because I feel bound to say that if and when we have authority in matters of this kind, we will feel it an obligation upon us to do justice to that section of the rural community as we seek to have it done to those who actually live and get their living on the land.

The other point is with regard to these abatements of rates provided for the relief of agricultural land. I am right in saying, I think, that they do not apply to the rateable valuation of the house or buildings on the land. Now we ought to bear in mind that if the rate burden continues to grow and it is left to operate on the houses and farm buildings on a small holding, we are rapidly moving into a position in which we will be multiplying schemes to induce farmers to improve their houses and put up new farm buildings and equipment, while, at the same time, as the rate burden on these buildings grows, we are discouraging them from undertaking the very kind of expansion we seek to subsidise. That is a silly and contradictory procedure. It shows a complete absence of any planning on the part of the Government.

I do not want unreasonably to expand the scope of the debate but we should bear in mind that in relieving agricultural land of its rates, there are other rate problems which, if they are not discussed now, may go unobserved. They cannot be discussed on the Minister's Estimate because they would involve legislation. I will submit my point and I will readily understand if you, Sir, think it goes beyond the ambit of this particular legislation. I do not think it does. When we relieve the rates on the small holding up to 80 per cent by these grants, if that small holder carries out a scheme of reconstruction under the Minister's reconstruction grant scheme, substitutes a slated roof for a thatched roof, increases the size of the windows, improves the doors, puts in water and so forth, then that house, so far as I know, is liable to a revision of valuation. If he builds stables or out-offices under the Department's Farm Building Scheme, all these become liable.

With rates standing anywhere between £2 in the £ and £3 in the £, it can very easily happen that the abatement we give here is more than swallowed up in the revision of valuation which may result from the improvements which the farmer seeks to carry out. I would suggest to the Minister that while we have made some concession in regard to farm buildings which are immune from rating for a period after construction, we ought to try to ensure that where a house is improved without increasing its cubic capacity, or where a shop is improved internally or externally without increasing the cubic capacity of the building, the Commissioners of Valuation should be inhibited from increasing the valuation.

Subject to those observations, we are in favour of this Bill but we believe that in respect of the 77 per cent of the holdings whose rates are now relieved to the tune of 80 per cent, it would be much more sensible to finish the job in relation to the tune of 100 per cent.

Coming from the county which has the lowest rate but the highest valuation on agricultural land, I feel this measure, while it is intended to help, does not exactly fit in with the requirements down there. I quite agree with Deputy Dillon that having gone 80 per cent of the way, there does not seem to be any logical reason why we should not be able to complete the job and go the whole 100 per cent. If it did nothing else, it would do away with certain administrative costs and there would be a substantial saving. I am sure the Minister has looked into this and has an idea of how it should be dealt with, but I should like to remark that this question of the £17 employment grant does not offer any inducement to an employer to keep a man for 52 weeks of the year. With present wage rates of something over £7 a week, or an average rate of somewhere nearer to £9, for the whole year, it represents less than two weeks pay. I have yet to see the employer who has kept on a workman because he was getting £17 rebate. It does not serve any useful purpose and possibly it could be changed.

One thing which has amazed me since I came into public life is the way in which the big farm with the small house pays a relatively small amount of rates while the small farm with a relatively large house, particularly if it has good stabling, pays quite a substantial amount of rates. That should not happen and I agree with Deputy Dillon that the system which has grown up of increasing the amount of rates, increasing the valuation of buildings, when they are improved, should be changed. One thing which is a disgrace is that somebody who gets a county council labourer's cottage with one acre or less, very often finds that he is asked to pay anything up to 3/6d. a week rates on top of the rent. If a house is built under a grant, there would be no rates for the first year and it would only come under full rates after ten years, but if a man goes into a cottage, he has to pay full rates. Such people are often able to point out that they are paying per week for the cottage and the acre as much as their neighbour who has 200 acres is paying per year for each acre.

The big farmer who is not working his land, if it is still left with him, should have to pay a much more substantial rate than he is paying. This might be an awkward thing for the Department to administer but every assistance should be given to the small man who all the time finds it extremely difficult to exist. There is no reason why the man who is making no use of it should be able to get that type of rebate and in fact over the last two Budgets he has received increased rebates to which he is not entitled. The number of farms in the £20 category or less, according to the Minister, are more than 77 per cent of all rated holdings of agricultural land.

Seventy per cent, is it not?

Seventy-seven per cent, and 80 per cent of the rates on those holdings will be borne by the Exchequer. This poses another problem, that of the rate collector. The rate collector who has to visit every ratepayer will, I am sure, find it much more inconvenient to visit the number of small holdings. He might not get his money as easily from the big ones but one visit might cover as much ground as 20 visits to the smaller ones. The remuneration of all these must be taken into account when an alteration is being made and therefore Deputy Dillon is correct in suggesting that having gone so far we should now cover the 100 per cent and see whether or not it would improve the lot of the unfortunate people who are living on holdings under £20 valuation. In addition, it would mean a big saving in the running costs of rates offices.

I welcome this measure so far as it goes but it does not go far enough by any means. The distribution of the amount involved would appear to be a very generous gesture in a country this size but I would like to point out that as far as I know, the people I represent, and the people represented by western Deputies generally, will get very little indeed of this alleged generous handout. This would appear to be quite all right for the big midland farmer or, indeed, for the big farmer anywhere. It appears to me to be a measure deliberately designed to give the major benefit to the man who least requires and least deserves it.

I have nearly always taken exception to the type of jargon used in Civil Service documents. I do not know what interpretation other people may put on this sentence, but I find it difficult to put any interpretation on it other than my own. The Minister said:

The Bill will apply to the three financial years ending on the 31st March, 1967, and will increase the primary allowance from 70 per cent to 80 per cent of the general rate in the £ on land valuations up to £20 and on the first £20 of higher valuations.

Am I to take it that is a way of covering up the big man's gain? Does it mean he will get this full allowance on £40 valuation? I think the true interpretation is that the man with £40 valuation will get the same allowance on a percentage basis as the man with £4 valuation. I regard that, if it is true, as grossly unfair. I would be prepared to go to £15, or something like that. I know other subtle changes are made, but it looks as if the man with £40 valuation will be as well catered for as the man with £4 valuation.

This is really a well-designed method of feather-bedding the big farmer with a large valuation on his land and a proportionately meagre amount of valuation on his buildings. Under this system he is getting away with downright murder. The man in Mayo, west Galway, west Donegal, parts of Sligo, Roscommon and Kerry, has a higher valuation on his buildings than on his land and he gets a few meagre shillings of this handout of £11 million. That is grossly unfair. It means the rich man gets the subsidy, and not the poor man. Surely it is not beyond the imaginative capacity of the Minister to find some way of redressing that obvious wrong? In my constituency there are people with valuations of £3, £4, or perhaps only 30/-, on their land, and with valuations of £5, £6 or £7 on their buildings, and what will they get of this £11 million cake? The Minister should seriously consider doing something for them. If people in the West had £40 valuation, we would not be looking for any soft money from any source. We would work the land and make it profitable.

There is an even worse aspect. While this £11 million handout is going, no man living in a town will get anything out of it, unless he owns land. Surely at this stage, from travelling through the country, the Minister must know that small business people in towns have been very badly hit over the past few years because of the unprecedented increase in rates. They are paying rates on a system of valuation. The valuation increases as a result of the slightest improvement a man makes to his buildings. Surely that is a brake on progress? It is enough to keep a person from putting up as much as a new door. If he alters the size of a window, he is reported, and his valuation, and consequently his rates, is increased. That is a grossly unfair way of dealing with such matters at this stage of our existence. It may have been a simple way of dealing with them in the past when people were not very imaginative, but surely there must be some other solution today if we are not to shift all our people out of the towns.

Of course, if it is national policy to wipe out towns, no better policy could be found than that which has been followed for years and years past, but to my way of thinking, it is not a proper way of dealing with these matters. I see no reason why a man in a small town should not get some kind of subsidy on the valuation of his buildings, just as the man out in the country can get a subsidy on the valuation of his lands. Many people in towns can get no grants of any description for carrying out improvements, while people in the country can get any grant they wish for. The Minister should seriously consider finding some way out of this utterly fantastic and impossible rating position. It is wrong, and if the Minister does not change it, some future Minister will definitely change it, no matter what steps he may have to take.

There is also the question of the great disparity in rates. In my county the rates are well over £3 in the £, and I suppose in Meath they are not 30/- yet. That means that industrialists will not come to Mayo, or other western counties, where rates are high, because it is cheaper to operate a business where rates are low, even if valuations are high. The Minister should also very carefully examine that side of the problem.

Generally speaking I welcome what the Minister has done. It is a step in the right direction, although a very short or very small one. I would ask the Minister to reconsider the whole rating and valuation set-up, and come to the House in the near future with something better than what we have been used to getting for a number of years past.

It is very interesting to see that we have now reached the stage where we can give an 80 per cent allowance on the first £20 of land valuation, and such valuations account for 77 per cent of the farms of this country. The first two speakers seem to think it is hardly worth the candle and that we should go the whole hog in derating land. I am delighted to hear that because the record over the years since 1898 does not indicate that anyone did anything to get as far as we did, except Fianna Fáil in 1946, 1953, 1962 and 1964. It does not really stretch the imagination on the part of the Leader of the Opposition, as it were, to forecast where Fianna Fáil are heading, when we have reached an 80 per cent rebate on 77 per cent of the holdings in the country, but we should keep in mind that those who advocate are not the people who have performed.

You forced the rates up to £3 in the £.

They had their opportunity and they did nothing about it, on either of the two occasions in the recent past.

Your achievement is that you brought the rates back to what they were in 1956/57. That is your boast.

Keep your shirt on. Do not be as thin-skinned as you were elsewhere in the past few days.

The measure of your achievement is 1956/57.

People are better able to pay rates today.

All you were able to do was to bring the rates back to what they were in 1956/57.

I will have more to say after Private Members' Business and I hope the Leader of the Opposition will remember that.

You would want to.

Debate adjourned.
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