I am opposed to this section. In 1978 within a year of coming to power, the Jack Lynch-led Fianna Fáil Government had concluded that the most suitable form of agricultural taxation should take the form of a resource tax. This was clearly indicated in their Green Paper of June 1978 entitled, "Development for Full Employment. This argument was developed further in the January 1979 Government White Paper entitled, "Programme for National Development 1978-1981." It was stated in that programme that, and I quote:
The Government see taxation in the agricultural sector, as in other sectors, not only as a means of raising Exchequer revenue but as a positive instrument for the development of the sector. It was in this context that the Green Paper put forward the option of a resource tax, an instrument which has many development advantages. However, farmers' representatives, in their submissions on the Green Paper, stated their opposition to such a tax. ...
The Fianna Fáil programme went on to state:
Much Irish land is under-used. A resource tax acts as an incentive either to use available land effectively or to release it to those willing to use it; furthermore, such a tax, since its marginal rate on additional income is zero, does not constitute a disincentive to higher output. These advantages have been recognised by the NESC in their Report on Policies for Agricultural and Rural Development (No. 42). The introduction of a resource tax was also recommended by the Inter-Departmental Committee on Land Structure Reform which reported in May 1978. The Government are in favour of a resource tax in principle. They recognise that local authority rates on land are to a large degree a resource tax but that the present reliefs from rates provided through the Agricultural Grant weakened the effectiveness of rates as one of the means of ensuring proper use of our land resources...
In line with this and in response to the trade union campaign for a fair taxation system, the then Minister for Finance, Deputy Colley, issued a statement on April 24, 1979 detailing the Government's farm tax package for 1980-81. The resource tax part of this package could only be regarded as a first step. Of about 120,000 full-time farmers only 14,000 were expected to pay this resource tax — those on holdings of £70 rateable valuation or more or, in other words, on holdings roughly exceeding 140 acres. The tax was to be levied at a rate of £3.50 per pound rateable valuation and was to bring in about £7 million per year or an average of £500 per year per farm in respect of the minority of 14,000 big farmers who would be liable to pay it.
Before the year was out Deputy Haughey had become Taoiseach and subsequently there was a Cabinet reshuffle. On budget day 27 February 1980, the new Minister for Finance, Deputy O'Kennedy, did indeed introduce a resource tax along those lines for 1980-81. A week later, however, the Taoiseach made it clear that he intended disowning the Government's commitments in this regard. On 5 March 1980 he told the Dáil that his Government looked on resource tax as a short-term expedient, adding that it was not the Government's intention that this should be a permanent feature of the system. This was tantamount to tearing up the previous year's Government White Paper. On budget day one year later, January 28 1981, another Fianna Fáil Minister for Finance, Deputy Fitzgerald, confirmed this Fianna Fáil somersault when he told the Dáil that the Government decided earlier that the resource tax would be discontinued after one year and that he was confirming that decision. He went on to say that the consequent saving to the farming community would be more than £6 million a year on the basis of the tax provisions introduced in the previous year. He added that resource tax due in the previous year but not paid remained due and would have to be collected during the course of the year. The 1981 Fianna Fáil election Manifesto boasted of the abolition of resource tax and by implication the tearing up of the Lynch Green and White Papers of 1978-79. Obviously, Fine Gael acquiesced in this abolition by virtue of their complete silence of the issue in their 1981 election Manifesto. But this silence meant also that so far as the electorate as a whole were concerned there was no Fine Gael attempt to outbid Fianna Fáil on this issue by promising that the resource tax due in 1980 would not be collected or that the amount which had been collected so far would be returned to the farmers. Accordingly, when the Irish Farmers' Journal on May 30, 1981, ran a feature on Fine Gael's farming manifesto, they did not find it possible to hold out any promises regarding the 1980 resource tax. Within a week, however, Fine Gael campaigners for the farming vote held out a promise which had no place in the manifesto that they had seen fit to put before the people as a whole. On June 6, the Irish Farmers' Journal reported:
On the farming taxation issue, Garret FitzGerald has now made very clear commitments which he repeated for the Farmers' Journal....
They went on to say that:
Fine Gael has also pledged to pay back resource tax already paid and cancel existing bills for it.
Nevertheless, Fine Gael did not win the election outright. While promises to the farmers which had been written into their election manifesto did find their way into the Coalition Government programme, this extra nod-and-wink understanding did not. The Coalition document, "Programme for Government 1981-1986", accordingly allowed no scope for any behind-the-scenes understanding between Fine Gael and farmers that the resource tax due for 1980 would be given back to the farmers. When the Labour Party conference endorsed the Coalition arrangement, they certainly did not endorse what remained excluded from the Government programme. Still less did the Dáil when it endorsed Deputy FitzGerald for Taoiseach on June 30 last year. Therefore, it is not surprising that when the Irish Farmers' Journal on July 4 1981 ran its first feature on the new Minister for Agriculture, Deputy Dukes, and quoted from what he had to say on Government policy regarding farm taxation, not a single word was said about handing back the 1980 resource tax. More significantly still, when the new Minister spoke during the budget debate on July 22 last year he did not make any mention of any such intention. However, three weeks after the Dáil had risen for the summer recess the behind-the-scenes deal came out into the open.
In its issue of August 14 1981 the Irish Independent carried a front page report which revealed, and I quote:
The Government is to take the unprecedented step of returning about £700,000 to farmers, collected under the controversial Resource Tax which operated for 1980 only. And rates on agricultural land are to be finally abolished from next year's budget — a move which will cost the Government £35 million in 1982 in compensation to local authorities. The original target for revenue for Resource Tax introduced in January 1980, by the Fianna Fáil Government, was £7 million in the first year.... Most refused point-blank to pay it...
The Irish Independent incorrectly stated that the refund had formed part of the Fine Gael election manifesto as did the Irish Farmer's Journal in its report on August 22, 1981, ignoring the fact that they could find no such promise in reporting on the manifesto on May 30. In the issue of August 22, that paper reported:
The Government is to refund farmers the £700,000 collected under the controversial Resource Tax. This announcement was made by the Minister for Agriculture last week... Alan Dukes described the refund as a significant step, as the tax had been legally collected... It was payable by about 14,000 farmers, but was fully resisted ... It was implemented for the year 1980 but was discontinued by the farmer Taoiseach...
That is a misprint in the Irish Farmer's Journal; perhaps a Freudian slip—
... Charles Haughey, when he came to power. It will probably be late in 1981 before the refunds are made.
Deputy Dukes had no mandate for such a retrograde step. The Fine Gael Party did not include such a promise in the manifesto which they saw fit to place before the electorate as a whole. Fine Gael and Labour included no such promise in the Coalition programme which they placed before the Special Conference of the Labour Party. The Coalition Government never even gave a hint of any such promise in Dáil Éireann.
It is important to stress that only a small minority of the richer farmers were liable for the resource tax in the first place. It is true that the majority of farmers had a bad year in 1980. The average family income per full-time farmer was £3,685. There are about 120,000 full-time farmers in this State. Many did better than average. For example, 31,000 had an income in excess of £5,000 in that year. More significantly still, 15,000 full-time farmers had a family income per farm in excess of £8,000 for 1980. These figures are given in the Farm Management Survey, 1980, and are available to every Deputy. It is this category of better-off farmer for whom the resource tax was intended. The minority of 14,000 farmers liable for resource tax were expected to contribute only £7 million under it — in other words, an average of £500 each per year, or £10 per week. In the event, only £700,000 was collected, or an average of £50 each for the whole year. This shabby move contained in the Finance Bill is designed to hand back this miserable amount, £700,000, to the better-off or tight-fisted farmers, while workers continue to carry an even heavier burden of taxation measures.
I have no hesitation in opposing this section. To do otherwise would be dishonest, and wrong, and flying in the face of reality. The reality is that while workers in the PAYE and PRSI sectors are carrying a bigger burden of taxation than ever before in the history of the State, we are now proposing to hand back this miserable sum of £700,000 to people who have creamed off the profits of farming down through the decades. They paid it for one year at the miserable sum of £10 per week. Surely that is one of the most ludicrous proposals ever to come before this House in its 60 years history — to hand them back this money at a time when workers cannot get legitimate refunds or rebates of money which has been stopped incorrectly. It is very wrong at this time. The Minister says every amendment will cost more and therefore he is resisting it. In many cases I suppose he is right. It is his duty and his job to resist any attempt to add to public expenditure. On the other hand, he is now handing back quietly £700,000. He cannot defend that. Nor can Fine Gael defend their policy in this regard. Therefore, I oppose it.