Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Thursday, 5 Jun 1980

Vol. 321 No. 11

Finance Bill, 1980: Committee Stage (Resumed).

Question again proposed: "That section 25 stand part of the Bill."

This resource tax is a cruel tax and can have disastrous effects on the farming community who are already reeling under increasing taxation and falling prices. It comes at a time when it was never more important for the farmers to have the confidence to display initiative and increase production, to export more to help to get the country out of the crisis that it is in today and to reduce our huge balance of payments. The last election was fought on the basis that we were trying to tax the farmers out of existence. We know that Deputy Mark Clinton improved the standard of living of the farmers; their income increased from £350 million to £900 million in a very short time.

I remember the performance of Fianna Fáil Ministers at that time and the promises they made to the farmers in relation to taxation. The farmers were told that we were trying to tax them out of existence but that if there was a change of government things would be completely different. They were not told at that time that the threshold for taxation purposes was to be reduced from £75 to £40. They were not told that the 2 per cent levy was going to be introduced. They were not told that on top of that they would have to pay a resource tax. All this was done by a government that made so many misleading promises to the farmers at that time. In the past farmers have been in the front line trenches in many wars here, national, social and economic. All they want is fair play from any government. They have pride, they wish to pay their fair share but they want a fair system that will not discriminate against them as this resource tax certainly does. They have no wish to be beggars, to be carried on the backs of anyone; they are willing to make their contribution towards alleviating the burden which this nation has to carry.

When well paid members of some unions want to indulge in farmer bashing they should also remember that the 70,000 self-employed people, like fat cats, many of them supporting this Government, are only paying a little over £60 million. That works out at a little over £800 per individual. Is that fair or just? I do not think it is. What we all want to see here is an equitable system of taxation. Indeed, when the present Taoiseach was in opposition he waxed eloquent about equity in taxation. He said, and I quote from the Official Report of 5 April 1974, column 1787:

We in Fianna Fáil want an equitable tax system. We want that equitable tax system as a basis for social justice.

Where is the equity in this tax where certain sections of the people have to pay this taxation? A farmer with a poor law valuation of £70 who has a wife and ten children would pay, on top of the other tax and rates he has to pay, £245 extra in resource tax, but a bachelor farmer with a valuation of £69.99 does not pay one penny extra. Where is the equity there? All forms of tax should be seen to be equitable to all sections of people. We have heard so much in the past about cherishing all the children of the nation equally. I certainly do not think that this is chershing all the children of the nation equally.

When Deputy Crinion was speaking about the resource tax he denied that the Taoiseach changed his mind the day after introducing the tax. The Minister spoke at length here and mentioned all these taxes. He never mentioned that this resource tax was only a temporary form of taxation. But the next day when the farmers' organisations made their voices heard he very quickly changed his mind and, let us remember, it was not the Minister for Finance who made this statement but the Taoiseach himself; he said it was only a temporary form of taxation. We are inclined to ask why. Was it because the farmers' organisations spoke out so vehemently against this taxation, or is the Taoiseach keeping his options open? The Minister may look at me in surprise, but their disastrous policy has led this nation to a crisis and we are at the edge of the precipice at the moment. His idea may be either to run away from it or have an election instead of staying on in power, knowing as he does that unless the Government change their policy things are going to go from bad to worse. This is a selective form of taxation. Deputy Crinion also mentioned a man who appeared on a television programme and said that that man was not given time enough on that evening to explain what he owed the banks because if everything was taken into consideration he possibly should not have been paying income tax but that, in any event, the full story was not told. So far as we on this side of the House are concerned, neither we nor Deputy Ryan when he was Minister agreed with tax evasion. We were one government that did more than any other government to catch up on the people who were avoiding paying their fair and just share of tax. We closed as many loopholes as we could at that time.

The country today is in a mess and it is of the Government's own making. They gave the impression that everything was up for grabs a few years ago. The Government abolished wealth tax. They abolished rates on castles and on millionaries' residences. Even a person with, say, six houses let in this city is exempt from rates. All of this has put the Government in a situation of having to get money from somewhere and they are taking this money from the large farmers in an effort to placate some other people. The dead hand of Fianna Fáil is descending again on our farmers. We know that the Government are short of money but the situation is of their own making. When we left office in 1977 there was a growth rate of 6½ per cent and inflation was of the order of 9 per cent. Today the inflation rate is 18 per cent and we have a growth rate of perhaps half of one per cent. The Government have borrowed and have squandered the people's money and they are now imposing this unfair and unjust tax on the farmers in order to get money to run the country.

Our farmers are the backbone of the country. The majority of them work very long hours every day of the week unlike some of those who are calling for farmer taxation and who work a five-day week for about five months of the year. The Minister should realise that if the farmers are prospering, the nation generally will prosper but that if the farmers are poor, all other sectors will be poor also. If the farmers are ground down with taxation they will not be in a position to increase production. Their confidence is being eroded by those who pretended a few years ago to be their friends. They were fooled by this Government. What is needed is the type of action that will restore confidence on the part of farmers. They need a Minister for Agriculture and a Minister for Finance who will ensure that there is fairplay for the farming community. If the farmers are allowed to prosper, their prosperity may be the means of getting us out of the crisis we are in now but they will not be in a position to prosper while the Government continue to impose further taxation on them. If there is any further loss of confidence among this section of the community the country may well slip over the precipice on which it rests now.

I should like to refer first to the record of what was announced by me and by others so that we might clarify some points that have been raised in the course of this discussion. It is important to do this in order to put this Committee Stage discussion in its proper context. It has been said this morning by perhaps every spokesman from the Opposition who has contributed that when I referred to this in my budget statement I did not give any indication other than that the provision would be permanent and that the following day the Taoiseach said the intention was that the provision would last for only one year. The implication in that is that the Taoiseach and I were at odds with each other on this point. It might be helpful here to quote from the budget statement in this regard. I quote from column 734 of the Official Report for 27 February 1980:

As I indicated to the farming organisations in my consultations with them, the operation of this revised scheme now being introduced will be kept under review in the interest of equity and in the light of experience of its operations.

That is far from being what the Deputies opposite are trying to present it as being. I said very clearly in that budget statement what I had said also to the leaders of the farm organisations in our consultations with them before the budget and I had very many useful consultations with them both before and since the budget. It is reasonably clear, as I indicated to the leaders of the farming organisations before the budget, that if one is keeping a package under review, the review is conducted in the light of its operations. By definition, review must be in the light of operation.

Mr. T. J. Fitzpatrick (Cavan-Monaghan):

Income tax was kept under review from 1814 or whenever it was introduced.

The Minister must be given the opportunity to speak without interruption.

Those Deputies opposite have the opportunity to come and go at their ease and pleasure and of making these sort of remarks after I have sat and listened to everything being said. When I am attempting to put the facts on the record I get a comment about income tax generally going back into history.

What I said in my budget statement in regard to the point at issue was by way of confirmation of what I had said to the leaders of the farming organisations before the budget. That remains the position. In the light of the recognition on the part of the Government of the importance of agriculture and of the role it plays in our economic development, we have had very useful consultations relating not only to the tax issue but to various other issues with representatives of the farmers. These consultations will be continuing and I am sure they will be very useful. Deputies opposite will be aware, though perhaps it is important to remind them, that the announcement in respect of this issue was made originally on 24 April 1979. It was announced then very clearly and unequivocally that a new resource tax would be introduced with effect from 6 April 1980. There were set out details of how this tax would apply and there was reference to the margin of reliefs, a point that I shall come to later.

Was there reference to the tax being for one year only?

No. What I said in my budget statement was entirely different from what is being represented by the Opposition, but was the same as what was said after a subsequent meeting between the Taoiseach, the Minister for Agriculture and myself with a delegation from the IFA-ICMSA coordinating group on 14 April. In an agreed statement following that meeting it was said that the Government indicated that it was not their intention that the resource tax should be a permanent feature of the tax code and that the termination of that tax would be considered by the Government in the light of the amount of tax paid by farmers in relation to farm income generally in the current year. That was confirming that the question was being kept under review and that remains the position. Anyone who tries to put any other gloss on the situation by saying, for instance, that there is no specific provision in the Bill to the effect that the tax should be temporary, will fail in his attempt to misrepresent the position.

In so far as it is not stated in the Bill to be a temporary measure, anyone who for a moment looks at the purpose of legislation and how it is drawn up, will recognise that the one thing which is required in drafting sections of a Bill is that they be precise and clear. In an area which is obviously complex enough—namely the area of tax generally—it would be unforgiveable for a Minister for Finance to introduce new concepts which are proper, let me acknowledge, to political statements or commitments made in this House, outside it, after or during the course of consultations which do not or could not form any part of a Bill as drafted. Those who would say that there should be some section in this Bill which says that the operation of this section will be temporary are ignoring the fact that is not the way legislation is drafted. There is no reason, purpose or precedent for stating that it will be a temporary operation.

(Cavan-Monaghan): Income tax related to rates on agricultural buildings.

You state to those who are entitled to know—the public generally or, in this instance, the farming sector or a section of it—precisely what the Bill is and how it will operate. This is stated clearly in the Bill. Clearly though it is stated, some members of the Opposition apparently have not been able to grasp even the most obvious and clear aspects of what is being done here, if one is to judge from some remarks of Deputy L'Estrange and others that I will come to later. That is, and remains, the position and it will be reviewed in the light of its operation. A review presupposes an examination of the operation of a farm package or any other package which is being reviewed. A review cannot start before the actual operation itself gets under way. That is the reality of the position as the Government present it.

I should mention here that, even as announced in the Bill which is in line with statements we made—and Deputy L'Estrange would appear to have missed this point—there is provision in the very next section——

I saw that. I agree, I just looked at it now.

The Deputy saw it afterwards, apparently. There is provision for the operation of marginal relief, so that when someone says a man with a valuation of £70 must pay seventy times £3.50, he is wrong. He will pay one-tenth of seventy times £350—in other words, seven times £350. If his valuation is £71 he will pay two-tenths and at valuation of £72, three-tenths and so on.

(Cavan-Monaghan): At £81?

Marginal operation, as the Deputy knows, operates between the figures of £70 and £79, not £81, but he can make that point when he comes to make his own speech.

There is no point in implying that we are at the throats of the farmers. I can understand that when one gets into a flight on the wings of oratory one forgets the reality on the ground. That reality is here in this Bill, and marginal relief will operate very effectively in this area for those with valuations of between £70 and £79.

During the course of this discussion, it is reasonable enough that Deputies opposite would put this in the overall context of what they see as being crushing tax burdens on farmers, which is the case they presented this morning. They make references to the other elements of the tax package. There is no decision, much less determination, on the part of the Government to effect a predetermined yield from farm taxation. I have stated that before, certainly in this House, but it is necessary that I should repeat, in the face of implications to the contrary by the Opposition, that that is not our intention. Any Minister for Finance must make an estimate if he is to fulfil his functions and discharge his obligations in relation to revenue and expenditure, as every Deputy must know. In line with that obligation, I have estimated that the total yield from farm taxation—which, of course, includes, as Deputies know, rates, income tax and resource tax, will be of the order this year, of £86 million. That is my estimate. It may amount to more or less, but that is what we estimate in the light of falling incomes last year.

The important thing is that, even since the budget statement, because of very useful consultations which we had and because of the importance we attach to agriculture, I have made significant adjustments which, as I have stated already, are such that will reflect the Government's recognition of the importance of agriculture, while at the same time maintaining that very important balance which is essential if we are to have a united community, as distinct from a divided community, on this issue of taxation as between one sector and another.

If one goes perhaps, a little too far one will get a reaction which will be in nobody's interest, the farmers' or nobody else's. That is one of the reasons why I have, in the course of this Bill, taken what are recognised by the farm leaders we have met to be significant adjustments. It is important that they will be seen in detail for the significance which does attach to them. I am talking about the exclusion from the restrictions on capital allowances of expenditure on land reclamation, drainage, fencing, farm buildings, all these developments on the farm, the fixed plant and machinery on the farm building which we dealt with this morning.

An increase of up to 30 per cent per annum is the amount of farm buildings allowance that may be claimed on such expenditure which can be written off over a period of four years, instead of eight years as hitherto. These are all real, positive developments, recognised to be such by the farming organisations. That is, however, not the end of it. In this Bill, we are also introducing provisions for the improvement of stock relief. I have noted, in the course of this debate, that while one gets perhaps a quick welcome from the other side in relation to all these welcome adjustments, as soon as that is done, it is said to be not nearly enough, or is simply a measure of a grudging reaction on the part of the Government, or something like that, which is not the case at all.

In relation to stock relief, we are increasing the rate of relief from 75 per cent to 100 per cent. We are allowing the relief in respect of stock increases over 10 per cent of profits instead of 20 per cent of profits, thus increasing the amount qualifying for relief, and we are introducing special provisions to deal with problems when disease strikes livestock. This has all been done as real, practical measures which demonstrate as clearly as I could, or any Government could, our recognition of these problems.

We have also introduced simplified accounts. Some Opposition members were saying that these poor creatures with £40 or £50 valuation would have to waste their money in engaging an accountant, and waste the talents of the accountant. That is not the case at all. I am sorry to have to disullusion them, but the reality is that there is no such requirement to get an accountant to vouch for the farmer's financial situation. We have, after consultations with the farm organisations, drawn up a simple form of accounts, not just for those with valuations between £40 and £50 coming into the tax net for the first time, but also for other small enterprise farmers above £50 valuation. Certainly, that should diminish the notional—and I can use this word properly in that case—imaginary burden that the Opposition Deputies suggested yesterday that we were imposing on farmers the engagement of accountants in this area.

I have also in this case distinguished between farmers and others when it comes to the date of payment of tax. Where traders and other professional persons are asked to pay their 1981 tax in one sum on 1 October farmers will pay only half of their 1981 tax on that date and the other half will be payable on 1 January.

I am not wanting to make a great boast of any one of these areas but I am anxious to demonstrate that they prove very conclusively that the attempts made to present doom, gloom and lack of interest in the farming community, or what it represents in our economy, do not measure up to the facts. It is fair to say—and this is very important—that in addition to those special reliefs which apply to farmers only, the actual income-splitting provision, on average, will apply to them more than others. As anyone who knows much about the farming community will admit, if ever there is a case where the wife remains at home and is not in receipt of a separate, earned income, it is the wife of the farmer. Though the benefit is not for the farming community alone, it has been recognised by the farmers themselves—the Opposition do not want to recognise any significant adjustments here—it will mean for them a very significant concession, a significant recognition of the importance of that provision to the tax liability of the farming community. For instance this would mean that most married farmers who have to pay tax will be paying at a 25 per cent rate and it is unlikely that there would be many who would be paying tax at a higher rate than the standard 35 per cent. Even then it is important to recognise that any tax payable would be after credit has been allowed for the rates payable, a provision introduced in 1978. There is also the easement in section 74 we shall be coming to in relation to the capital acquisitions tax, but I shall leave that until we come to it.

Those are some of the major adjustments incorporated in this Bill in connection with our recognition of the importance of agriculture. Therefore it would appear that the Opposition are on a line they want to pursue—but one on which I do not think anyone else will follow them—when they talk about the crushing burden of tax we are trying to impose on the farming community and that I in particular, as Minister for Finance, am determined, hell bent, to impose, when the record is quite the other way.

Of course tax represents one area of Government action only. It is one way in which the Government can demonstrate their interest in or commitment to any particular sector. Perhaps much more important—as the farmers themselves recognise and have stated very clearly—is the level of financial commitment through the various agencies of the Government, in particular the Department of Agriculture, to farm development. This is something of which I am especially conscious. In the course of our discussions with the farm leaders—something I very much welcome—we spent much more time discussing the programme for farm development and how it could be encouraged further to realise its great potential within our economy. Those are the issues about which we spoke, although the Opposition would try to convey that we were hung up on one aspect of the farm package and went to battle on it. In relation to certain aspects of the package, including the resource tax, we had detailed discussions, we reached agreement and understanding. But the main thrust of what we were about—which is their function as well as mine—was to create conditions for the effective economic development of agriculture, thereby creating conditions for the effective development of the economy because of the important role agriculture plays in that respect.

Let me put some other facts on the record that have been referred to this morning as if this Government had no interest in or awareness of the farming sector beyond screwing them for whatever tax we could get from them. Here the old Latin maxim applies—res ipsa loquitir—the facts speak for themselves. Indeed the facts throw up some stark contrast between what speak for themselves now and what spoke for themselves when they had the opportunity of taking action in this area. For instance, one would never guess that in 1976 the amount of money actually applied by the Government opposite for farm modernisation was £13.3 million. That compares with an estimated £33.8 million this year, over 2½ times what was made available then. Yet we are told that in 1976—it was re-echoed on those benches quite a bit this morning—the economy was in a much healthier state than it is now, they would suggest, due to Fianna Fáil mismanagement. One cannot have it both ways: if the economy was in a healthier state certainly their level of commitment to agriculture did not reflect the importance they attached to it. If one looks at the programme for education research and advisory services, and inspection services, they increased in the same period from £19.3 million to £33.2 million. Arterial drainage has increased from £2.9 million to £7.2 million. It is important to recognise that all of these figures are net of any EEC recoupment of farmer contributions. The total estimated expenditure on agriculture this year—this is from the State alone, and there is another important element to which I shall refer here—is of the order of £184 million as distinct from the figures in the Coalition's last year in office of £156 million.

All of these facts to which I am now referring do not accord with the case presented here by the Opposition in this area—their contention that we had no immediate concern for farm development or for the farming community generally. Indeed they have suggested we have no concern beyond that of squeezing the last penny of tax out of them. Despite the fact that somebody opposite suggested only a short while ago that the farm package agreed in Brussels is totally inadequate and, they would suggest, is a measure of the failure of the Government to get very much more, let me put some things on the record in that connection also. It is less than a few months ago that one of the main concerns that prompted demonstrations throughout the country, one of which was held in my home town which the Leaders of both Opposition parties took time off to attend, was the super levy, which was the main concern at that time. I am sure both Opposition Deputies present recall it very well. It is not now the main concern because the Government dealt with the matter, and the Minister for Agriculture in particular, must be given full credit for the outcome. He managed almost single-handed to change the attitude of his colleagues, not just of the Commission. He was at one time a man alone amongst eight others but he negotiated so that eventually that super levy which was the cause of all the demonstrations is not now being applied.

Surely the demonstration in Nenagh, plus the presence of the two Leaders of the Opposition parties was of great help to the Minister——

——as well as the Irish Members in the European Parliament.

I suppose I have more respect for my home town than most others but I do have to say, allowing for that, that action in Brussels on an issue in respect of which Brussels was the battleground is probably a little more effective than talk in Nenagh.


Order, please.

So the most important element in this community knew where this Government stand. Far from undermining the confidence so vital in them, we can demonstrate to them that there was also—as Deputies opposite must know—at that time the proposal to suspend the provisions for intervention beef during the summer months which would have had a drastic effect on the farming sector. Once again, due almost entirely to the efforts of the Minister for Agriculture, that has been changed. I do not know how many more examples one has to quote to demonstrate how we can and have been showing our interest in all of this area. Although it is not for me to say, this is recognised by the farm organisations in difficult times for everybody, including the farmers.

In addition to the prices package we talked about this year, remember there is also a special development programme for agriculture in the west which will cost over £300 million over 10 years. This will include improvements of rural infrastructures, land improvement, investment aid for farm production and improved processing of agricultural products. All those facts are ranged on the one side to prove the opposite to what the Opposition Deputies suggest.

Consultations with representatives of farm organisations are but the beginning of continuing and, I hope, even more positive discussions leading to more positive conclusions in the future. I told the representatives that, even though their main contacts in Government would be with the Minister for Agriculture, because of my responsibility for economic planning my officials will not only be available for but will actively participate in discussions with farm leaders. This is a vitally important element as they see it, and as I see it. It is much more important than isolating the one small section of a package of farm taxation which is under review. It is important to demonstrate our confidence in the farming community and in the role they have to play in the economy. The on-going discussions on issues of taxation are continuing and will continue during this year. The importance of these consultations has been recognised and the proof is the outcome of these discussions some of which were demonstrated in the Bill today. I may be the first Minister for Finance to come from a rural constituency but despite that and any family contacts I might have——

That is not true. Mr. Gerard Sweetman was a rural Minister for Finance.

I am the first rural Minister for Finance for some time. Anybody sitting in my seat at this moment, whatever his background, would have to recognise the special significance of agriculture to our economy. One of our major problems is our balance of payments because of increasing oil prices, which unfortunately do not show any signs of decreasing—if anything, the trend will be the other way. If there is one section of the economy which is better equipped than most to make a major contribution to correcting the balance of payments—and unfortunately there will not be any self-correcting mechanism—it is the agricultural sector. Any Minister for Finance, wherever he comes from, would have to recognise that fact and hopefully demonstrate it to the community in a way that they too will recognise, whether they are factory workers in Coolock, county council workers, businessmen or professional men, that this is the area which holds the key to overcoming the difficulties which surround us.

There are two approaches one can take. One can express confidence in the agricultural sector, demonstrate it to everybody, as I have been doing in this Bill and since I took on this responsibility. One can give them confidence and express one's trust in them, or one can do the other, as the Opposition have been attempting to do, that is, implying that the Government do not care and that the resource tax is proof of that. That may be an understandable political approach, I do not know, but it will not contribute anything to the restoration and maintenance of confidence in the agricultural sector.

I recognise that last year was a very bad year for agriculture. Quite a number of extensive farms, because of the operation of the notional system particularly, did not make any contribution to revenue over a period of four or five years.

Were they in the very high valuation category?

From £200, £300 and £400 valuation upwards.

(Cavan-Monaghan): The same could be said right across the board in business, the professions and so on.

I know. The scheme that then existed was applied by them after advice. That is a different matter from evasion; it is avoidance. I said in my budget statement that the line between the two at this stage is rather thin. Farmers recognise that in the interests of equity it must be seen that each farmer is paying his share. Until we get a proper form of accounts under way we should try to strike a reasonable balance to ensure that some of those people pay some tax this year.

Would the Minister agree that their avoidance was made easier by the absence of a wealth tax?

We are in Committee and Deputies should make their own contributions.

I know where Deputy O'Leary and his party stand on this subject. This morning a number of Fine Gael Deputies criticised us for introducing, in a different form, what they were against, namely, the wealth tax. They implied that our opposition to the wealth tax was unwarranted, unfounded and was not justified. The Labour Party are opposed to the wealth tax because of their experience when in Government. They had a better opportunity of observing its effects than we had because we were in opposition.

That did not stop Fianna Fáil from opposing it.

Deputies are implying we were wrong to oppose the wealth tax but they are doing the same themselves now. They say we are introducing another form of wealth tax, but we are not. It is a very limited application of a resource tax and will apply only for a limited period.

Our objection is that it is limited.

Let me give some examples. Deputies say they oppose this "in principle". They did not necessarily object to the amount, which is not too surprising. The farmer with a £70 valuation will pay £24.50 resource tax; the man with £71 will pay £49.70; and the man with an £80 valuation will pay £280. I am not saying that this is nothing but I suggest it is not such even in this year as would drive any farmer underground. If it did so the viability of the unit would have been in question anyway. The man with a valuation of £100 will have to pay £350 and the farmer with a sizeable holding having a valuation of £300 will have to pay a little more than £1,000. Taking account of all the other adjustments which have been made since the budget, these people will be receiving a reduction similar to what they will now pay in resource tax. It is overstating the case to say it is such a crushing burden that it will drive the farming sector into further depression.

We were all concerned last year about the lack of understanding between the farming community and the trade unions. These two matters are vital to our economic development and to the extent that I could do so I was determined to try to bring about a better understanding between them so that we would not have continuing public hassle leading to lack of confidence generally. My consultations and those of the Government have been based on a calm appraisal of what is involved. It is a tribute to the leaders of the various groups that the acrimony has diminished and the Government have certainly made some contribution. It is recognised that we all need to act collectively in the face of problems which will continue to present themselves from outside. I wish to pay tribute to the farm leaders whom I have met at regional and national level and the responsible attitude they have taken. I am not expecting them to sing the Government song because that is not their role.

I hope that the views I have expressed in reply to the points made and also in relation to agriculture generally will help to make a contribution to further understanding. If Deputies opposite wish to present a different picture, it is for them to do so but I do not think it will be supported by farming organisations.

(Cavan-Monaghan): The resource tax which section 25 imposes would seem to run completely contrary to the main objective enunciated by the Minister in his budget speech, namely, to introduce greater equity into the taxation system. I cannot think of any more inequitable system of taxation than the resource tax. It is measured by a yardstick which is in itself unjust and discriminatory as between taxpayers; I refer to the poor law valuation system. It has been put on the record earlier that this system was introduced between 1850 and 1865. By the time it was completed it was already out of date and it is admitted by all to be an unfair system of taxation, particularly as between the valuation in one county and another. For example, County Monaghan is one of the most harshly treated counties, although it is one of the 12 western counties for the purposes of all assistance schemes. Some parts of the county qualify for headage grants under the EEC scheme, yet valuations in County Monaghan are as high as in County Kildare. A valuation of £70 in County Monaghan represents 100 statute acres and a similar valuation in County Kildare represents 95 statute acres. It is almost unbelievable, but it is a fact; and this is the yardstick which will be used in assessing the amount of resource tax which farmers in these two counties will have to pay. It cannot be justified. Statistics show that there can be a difference in gross profit of as much as £13,000 on the same valuation as between one set of counties and another. This is the system by which the Minister intends to bring in more equity.

I know of a case in County Monaghan where a farmer with a valuation of £81 was in receipt of a disabled person's allowance because of family circumstances and the condition of his health. This allowance, which is payable subject to a very rigid means test, was paid to this man last winter but was cut off in the spring because he was able to keep body and soul together. The Minister knows of this case and wrote a letter saying that hard cases make bad law and there was nothing he could do about it. That man will now be asked to pay £280 in resource tax. Can the Minister justify that?

This is a year in which farmers are suffering a reduction in income of at least 10 per cent and this is the time the Minister chooses to impose a resource tax, regardless of ability to pay. This section is completely contrary to the alleged objective announced in the Minister's budget speech to introduce greater equity into the taxation system.

Progress reported; Committee to sit again.