Dáil Éireann díospóireacht -
Wednesday, 10 May 1978

Vol. 306 No. 5

Rates on Agricultural Land (Relief) Bill, 1978: Fifth Stage.

Question proposed: "That the Bill do now pass."

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): In so far as this Bill contains relief I have no objection to it and neither have those Members on this side of the House. In so far as those sections which do not contain relief are concerned, I am totally and absolutely opposed to the Bill. The fact is the Bill contains relief only on agricultural holdings up to £60 valuation. I am wholeheartedly in favour of that but section 1 (2) of the Bill specifically deprives rated occupiers of holdings with a valuation in excess of £60 of relief. That is written into the Bill in black and white. Subsection 2 provides:

A rating authority . . . shall not apply the Act aforesaid to a person, as respects a local financial year, if the valuation of all the tenements of agricultural land in respect of which he is rated equals or exceeds the amount standing specified, on the first day of that year, in section 15 (3) of the Finance Act, 1974.

There you have a specific direction to the rating authority to get at the farmer with the £75 valuation this year and at the farmer with the £60 valuation next year. This is a doublecross. This is a going back. This is a cynical betrayal of the farming community. This is a total disregard of the promises made by the Minister and his Cabinet colleagues to the people who supported them.

I have made the case as strongly as I could, with the able assistance of Deputy Bruton and practically the entire Fine Gael Party, and we have failed to prevail on the Minister to amend the Bill. As it stands now it is an instrument designed to kill relief. What other interpretation could section 1 (2) bear? Why has the Minister put that section into the Bill? He has put it in to take away the relief which these categories of rating valuations enjoyed for 50 years. That is the object of subsection (2). Subsection (2) is the section which the Minister, with the assistance of agricultural Deputies from Cavan, Monaghan, Meath, Louth, Cork and the midlands and every agricultural Deputy in the Minister's party, put on the Statute Book of this House. It is no wonder they are ashamed of themselves and have nothing to say. That is the subsection to which I have objected.

We have done everything in our power within the rules of order of this House to try to persuade the Minister by force of argument that he should have deleted section 1 (2) but we have not succeeded. We do not propose voting against the entire Bill because it contains relief up to the £60 valuation but subsection (2) takes away relief from other categories and that is what I am against.

As Deputy Bruton pointed out, when the first Finance Bill was introduced by the National Coalition, the Minister for Finance, sitting on this side of the House beside the then Deputy Lynch, asked: "Are you not going to tax the farmers?" The Minister for Finance and the Minister for the Environment have the machinery in subsection (2) to reduce the threshold to nil and take away the agricultural relief utterly and entirely.

If there was an argument wanted in favour of what I am saying and if it was necessary to prove it beyond doubt, I would point out to the House that Deputy Bruton and myself offered amendments today to substitute £75 for 1978 and £60 for 1979. In other words, to tie the threshold to the existing figures in this year's Finance Act. But these amendments were quite properly ruled out of order by the Ceann Comhairle in the following terms: "I regret that amendments Nos. 1 and 2 tabled by you and Deputy Bruton must be adjudged out of order because they involve potential charges upon the revenue."

An Leas-Cheann Comhairle

I would like to point out to the Deputy that he cannot speak on amendments but simply on what is in the Bill.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): I do not propose to do that.

An Leas-Cheann Comhairle

The Deputy has been doing that. At this stage brief speeches is the rule and solely on what is contained in the Bill.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): I am speaking on the effect of section 1 (2).

An Leas-Cheann Comhairle

It is in order to do that but you must not speak on amendments that either were not before the House or were defeated.

Mr. T.J. Fitzpatrick

(Cavan-Monaghan): The effect of that is to enable the Minister to reduce the threshold from £50 to £40, to £30, to £25 and to £1. I am using as an argument in favour of that the letter I got from the Ceann Comhairle telling me that my effort to change that would impose a charge on the Revenue. The only way a further charge on the Revenue could arise would be by the reduction in the poor law valuations of £75 and £60 down the ladder.

Perhaps the Taoiseach and the Minister for Finance who believe in taxing farmers and always did will do that. I am against that. I am utterly and absolutely against the proposal in the section to abolish the relief of rates on agricultural land, because I believe that not alone should we not be increasing rates but we should be getting away from the system utterly and entirely. The arguments which have been made during the debate have proved conclusively that the system is wrong, unfair, unjust, inequitable and discriminates between one rated occupier and another and the thing to do is to get away from it. I object to this Bill because its provisions are not moving away from this inequitable system of taxation but rather are they writing it in firmly, consolidating and using it as a measure for collecting taxes to substitute rates on private houses and to substitute a wealth tax.

I do not know if we will have any further contribution from the Fianna Fáil Party. I cannot speak on this Bill again but I want to go on record as saying that from the first moment I saw this Bill I detested it and determined to oppose it because I regarded it as a shabby, double-cross of the agricultural community by this Government. At a time when they were leading the people to believe they were going to move away from rates, they have moved back again. I want to warn the people that a Government capable of using the biggest majority any government ever enjoyed in this State for that purpose is capable of using that majority for anything unless their own backbenchers get so thoroughly ashamed of them and disgusted with them that they would rather walk out of public life than continue to be associated with this kind of performance.

Mr. Bruton

I wish to avail of my right to contribute on the Fifth Stage to draw attention to one aspect of it which I think is most unusual in terms of the content of a statute. If a Bill is introduced by a particular Minister it confers powers on him as Minister which he will exercise. The House is assured that, if any substantial change occurs in the powers or their effect being conferred by that Bill, the Minister who introduced it will be answerable to the House for that change. This Bill is most unusual in that it marks a departure from that principle, and a departure in my view from what is proper ministerial responsibility to parliament in relation to legislation.

Under section 1 (2) of this Bill it is possible for the Minister for Finance, who has not spoken on this Bill, to set at nought the entire relief granted under this Bill, because the continued existence of any of the reliefs contained here is contingent on an amount specified in a Finance Bill. If the Minister for Finance were to substitute the figure "0" for the figure "75" in section 15 (3) of the Finance Act, 1974, he could entirely abolish all the rates relief contained in this Bill and in all agricultural rates relief legislation since 1939—all the £38 million worth of relief which the Minister for the Environment has claimed is being granted here.

The Minister for the Environment, who is responsible for this Bill, is giving this power to the Minister for Finance. That is a most unusual and undesirable precedent to set in the drafting of legislation. If the effect of a Bill is to be radically altered it is a sound and indispensable principle of constitutional Government that the Minister responsible for the Bill should be the Minister entitled to alter it and that Minister should have to justify setting at nought the Bill and the purpose for which it was introduced. Yet in this Bill the Minister for Finance can abolish every relief granted in this Bill by changing a figure in one line of section 15 (3) of the Finance Act, 1974. The Minister for Finance can introduce a Finance Bill containing as many as 200 sections and he can substitute the figure "0" in a certain line of the Finance Act of 1974. Simply by an amendment buried in a Finance Bill the entire agricultural rates relief legislation can be abolished.

In assessing this Bill the farming community should pay even more attention to the potential it has than to the changes which are immediately taking effect in the rates they are now having to pay as a result of this Bill. The fact that farmers with over £60 valuations will have to pay perhaps twice as much rates next year as this year and that the farmers with over £75 valuations are having to pay twice as much this year is important, but of potentially far greater importance is the blank cheque which the Minister for the Environment through this Bill is handing to the Minister for Finance to enable him to abolish rates relief without consulting the Minister for the Environment. We all know that a Bill must go before the Government before being introduced. However, once it is introduced, if a Minister wishes to introduce an amendment, he can do so without consulting the Cabinet. The Minister for Finance can amend the current Finance Bill which contains the figure "60" and substitute the figure "0" in 15 (3) of the Finance Act, 1974, and by that amendment agricultural land rates relief legislation can be abolished. That is the enormity of the power being conferred by this Bill and the extent to which the Minister for the Environment is signing away his powers to grant agricultural relief.

I protest against this Bill. For the responsible Minister to give to another Minister the right to negate legislation is objectionable, and it would be objectionable in any Bill even if it were a Bill dealing with a minor aspect of government. If any Bill contained a provision that the Minister responsible for the Bill could allow another Minister to take responsibility and do away with the contents of the Bill without his having to go back to the House, it would be objectionable. But it is all the more objectionable when it deals with a system of taxation which is basically unjust and which will be seen to bear very heavily on the agricultural community regardless of whether they make an income or not. The fact that reliefs in that context can be done away with simply by a minor change in a Finance Bill makes this constitutional impropriety all the more improper, and the Minister cannot justify it.

Mr. Enright

I must point to the deafening silence from the Government benches with regard to this Bill, which has been debated here for weeks. Rarely if ever have I heard such a deafening silence. It amazes me that nobody from the 84 Members of the Government is prepared to back the Minister in this debate.

An Leas-Cheann Comhairle

I am afraid that is not in the Bill, Deputy. There is nothing in the Bill concerning who did or did not speak on it.

Mr. Enright

During the last general election campaign I pointed out at many meetings that many of the promises being made by Fianna Fáil would be paid for in the manner that this Bill sets out. I knew that much of the moneys would be recouped from the farming communities in this manner. The appropriate person to have brought in this Bill was the Minister for Finance. If he were not available and could not spare time to come here, the next person whose responsibility it was to put this Bill before the House was the Minister for Agriculture, because this Bill and the £7 million we are discussing relate to the farming community. It is only from them that the money is being taken and only they are being affected. For that reason there was an obligation on either the Minister for Finance or the Minister for Agriculture to come here with this Bill.

We now have the withdrawal of the £7 million from the farming community plus the fact that in the budget the multiplier was increased and valuations reduced in the context of income tax. Also, we now have the Finance Bill, 1978, being discussed in the House which in regard to the capital acquisitions tax——

An Leas-Cheann Comhairle

We are not going into the Finance Bill and we cannot discuss capital taxes on this Bill. The Deputy must keep to what is in the Bill, nothing else. I am sorry, but that is the rule of the House.

Mr. Enright

Every available method of collecting finance from the farming community that one could imagine is being brought before the House. In regard to the capital acquisition tax the ceiling, if you study the Finance Bill, has remained exactly the same in regard to devolving property from father to son, mother to son or daughter.

An Leas-Cheann Comhairle

We are not discussing capital taxation and we cannot do so on this Bill. The Deputy will have every opportunity to do so on a future Bill.

Mr. Enright

I wish to put this on record because of the importance of the fact that all these methods are being used to try to gather every possible penny from the farming community. They have been seriously and sorely let down in this Bill and the other items I have mentioned. This is wrong and it is a serious matter.

Finally, rates are being taken off all private residences. When it is wrong to have rates on private dwellings it is wrong that they should be left on agricultural lands, not only that, but callously and cruelly increased in a way that will cause great hardship. The people this Bill hits hardest are people who do not qualify for Health Acts relief, the farmers with children not qualifying for higher education grants. Even if a farmer happens to be ill in hospital for years this Bill will hit him hard. The Bill utterly and completely discriminates against the farming community. It is a Bill against which a farmer cannot appeal and for this reason it is one of the worst pieces of legislation to come before the Dáil and to be bulldozed through by the Government in silence. That is what is happening today and it is wrong. The people who are being hit by it will long remember the Government for pushing it down their necks.

Mr. B. Desmond

It may seem rather strange that I, since we do not have many dairy farmers or beef farmers in Dún Laoghaire, should intervene in this debate. But it is appropriate that the House should consider the Bill in its Final Stage in the context of the overall package of the Government on three aspects in terms of the expenditure planned by the Government, in relation to local government and the Government package in relation to the rating situation generally. Also, there is to be circulated in the near future the Rates Regulations Bill. It would come as no surprise if we should see in relation to that Bill the true unfolding of the future strategy of the Government in regard to the role of rates in financing the Government's expenditure programme.

The most important feature of this Bill is the duplicity involved. The last election was in many ways a money election. People were promised aspects of relief which we knew were unattainable, for which we knew somebody would have to pay in the long run. Slowly but surely the birds are coming home—more appropriately perhaps, the cows are beginning to come home.

An Leas-Cheann Comhairle

The Deputy must keep to the Bill before the House and there are no cows involved in it.

Mr. B. Desmond

A few of them will be sold off to pay rates bills in the next few months. We in the Labour Party had forewarned the farming community that the creation of expectations of largesse implicit in the Fianna Fáil Party programme could not be justified, or was not attainable and that ultimately they would have to pay through the nose for the Government's expenditure programme. When the Government have been a year in office all one can say to the Minister is that the party of reality is now facing reality. The Minister, as Minister for the Environment, is like his predecessor in a Department where one faces reality every morning. The reality is that this is something his party did not put before the electorate in the last election and something which I have no doubt will be remembered by the electorate in the years to come.

Mr. McMahon

This was a most extraordinary Bill to come before the House so shortly after an election in the light of the promises of the Minister and his colleagues during that campaign. The Bill is also extraordinary in its title. It is extraordinary to have a Bill brought in to increase rates when the election campaign fought by the Minister and his colleagues was to abolish and to reduce rates. The point was made by many Deputies on the introduction of this Bill that in the election campaign not only did the Fianna Fáil candidates campaign on the abolition of rates on domestic dwellings, but the impression was widely given that a reduction for all those who would still be rated would be given. This Bill is far from giving a reduction in rates. Probably because of its title it has given a wrong impression and has not got the publicity it deserves. Not only has the silence on the other side of the House been deafening, as a former speaker said, but the silence of the media has also been deafening. I wonder if the farming organisations, and their representatives in the media, have read the contents of the Bill as carefully as Members have. The Minister's colleagues on the Government side read it so carefully that they decided to stay out of the House during the debate.

It is unfortunate that the Government decided to make up the money lost by the abolition of domestic rates by increasing rates paid by a section of the community involved in producing food. I have no doubt that this Bill will increase the cost of producing food and when that happens that increase will be passed on to the consumer. The Minister may say that only the ranchers and owners of big farms will have to bear this or that the mood of the country is that such people should be taxed. That may be so this year for the majority who will have to pay the rates but the fact is that the valuation limit will be reduced from £75 to £60 next year and that will mean that a sizeable portion of our food-producing community will be caught.

There is no credit due to the Government for making this decision when people are finding it increasingly difficult to keep food on the table. The protest made by the Opposition parties in relation to this Bill has not got the publicity it deserves. It is unfortunate also that Members on the Government side did not contribute to the debate. If Members on that side had contributed we might have been successful in our efforts to change some sections of the Bill. The Minister might have accepted the arguments put forward by the Opposition and the Bill might have been given an easier passage through the House. I hope that when the Bill is passed we will not have a continuation of this system of taxation. I hope we will not have a further reduction in the valuation limit because that would be disastrous. I hope the Minister does not reduce the eligibility limit to £50 or £40.

The Fianna Fáil Party secured a majority in the last general election on a number of promises and it is to be deplored that at this early stage in the life of this Government they are going back on some of the promises they made. They gave the impression that they would do certain things without the slightest inclination that they would tax farmers in this fashion. The mood of the country may have been to tax farmers, and to bring a certain number of farmers into the tax bracket is palatable but to insist on this important food-producing section of the community paying rates whether they make a profit or not is wrong. If it was income tax they would not have to pay it if they did not make a profit. It is terrible that they must pay such a tax if they do not make a profit. It must be frightening for the farming community. I am sure representations were made to the Minister in relation to this matter but he has chosen to ignore them and get the Bill through the House at all costs. I want to add my word of protest at the decision to introduce this means of taxation on farmers. We all know that farmers are prone to a bad year at least once every five or six years but those formers must pay that tax in the year they do not make a profit. I am sure all Members agree with taxing farmers because every section of the community should pay its fair share of tax but it is deplorable that any section of the community be taxed in this fashion. I hope this is the final stage in this taxaton and I long for the day when there will be a change of Government or Minister so that the relief that is so necessary for the food-producing section of our community is given.

Minister for the Environment (Mr. Barrett)

This Bill enables us to make £38.5 million available for the relief of rates on agricultural holdings this year. The benefits are: 100 per cent derating for those under £20 valuation; 100 per cent for those up to £33 valuation on the first £20; from £33 to £75, 80 per cent on the first £20 and 30 per cent on all rates on agricultural land between £20 and £75. That comes to a total of £38.5 million and it excludes those over £75 valuation who constitute 3 per cent of the total rated occupied holdings. Even though they are excluded from the relief this year they can set this off against the income tax which they will be liable to pay. The Bill directly links the limit to the income tax threshold for full-time farmers. Contrary to what Deputy Bruton said, the threshold cannot be changed without amending legislation which would have to be in the form of the Finance Bill. The Dáil will have an opportunity of debating that.

Mr. Bruton

I said that the Minister for the Environment would not be involved.

Mr. Barrett

It would have to be included in the Finance Bill. This has been a long debate. The purpose of the Bill is to give rates relief on agricultural land to the tune of £38.5 million. If the Bill were not introduced and passed through the House, it would not be possible to do so.

Question put and agreed to.

Notice taken that 20 Members were not present; House counted and 20 Members being present,