Tuesday, 2 March 1965
Dáil Eireann Debate
That a supplementary sum not exceeding £1,775,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1965, for Grants to Local Authorities in Relief of Rates on Agricultural Land.
The Estimate in the Book of Estimates for 1964-65 under this heading was for £9,422,000 and I am now asking for an additional £1,775,000. Added to the year's Estimate for £9,422,000 were certain matters provided for in the Budget where it was proposed to increase the primary allowance from 70 per cent to 80 per cent and the supplementary allowances from 25 per cent to 30 per cent. The round figure in the Budget was £1,400,000. In fact, the amount required was £1,359,000 which was £41,000 less. In addition to that, there was under-estimation in the original Estimate amounting to £416,000 and that gives the total of £1,775,000 which I am asking for now. I might say that the gross rate levied on land during the current year was £17.4 million which, of course, was the highest ever paid. Agricultural grant was also the highest at £11.2 million. Paid by the farmers in rates for the year was a figure of £6.2 million which, I am glad to say, was the lowest paid by farmers for land in ten years.
Mr. Sweetman: In view of the fact that the Minister has announced there was under-estimation of £416,000 apart from the additional Budget figure, is the Minister prepared to tell the House now how many such similar additions he will require apart from the large number of Supplementary Estimates we have down for discussion? Is there to be any end to the amount of additional money the Minister proposes to extract?
Dr. Ryan: The cause of the under-estimation here is quite different from  the other cases. The Minister for Local Government, who advises me in this matter, estimated at the beginning of the current year that he would require six per cent. In fact, the grant he required was 11 per cent.
Mr. Donegan: If one were on the Government side of the House, one might, perhaps, suggest that this is good news for the farmers. It is, however, not such good news at all because it must be remembered that rates are going up. I do not accept the Minister's statement that this will result in a lower rate being paid by farmers than they have paid for some years past.
Mr. Donegan: On land, yes. That qualification makes some difference, but it is not a major difference. I believe the farmers will pay considerably more in rates. The Government are paying £1,775,000 more in respect of three-tenths of the rates raised on the total valuation. Surely, if the Government are paying more, the farmer will also have to pay more? If one takes the grants given by the Government over the years, one finds they have increased considerably and the burden of rates was such that the Government were compelled to meet it to some extent. Otherwise, there would have been such a political and public outcry the Government would have been brought down.
This is rather like a sop to Cerberus. It is also very like patching the hole in the political dyke so that the Government will be in a position to state that they are helping the farmer  to some extent with his rates. What are the facts? The last major change occurred in the financial year 1962-63 when the Government gave 25 per cent and remission on valuations over £20. In that year the amount paid by the Government was £8,530,000. This year it will be £11,197,000. In 1962-63, the Government raised the 25 per cent to 30 per cent. If one takes the total payments of rates by farmers, it is extremely difficult to pursue the computation but it will be found that farmers this year will pay something in the order of £4 million more than last year. One has to take a great many estimates and find what will be the average increase in the £ in rates. Even taking into account the Government's £1,775,000, I believe it can be proved that the farmer will pay £4 million more this year as compared with last year and it can be proved that the farmer paid an additional £6 million in rates since 1962-63.
What are the causes? The first thing one has to remember is that rates in relation to a farmer are quite different from rates in relation to anybody else. A man with an income of £700 or £800 does not pay income tax, if he has a wife and child. On the other hand, a farmer with an income of £700 or £800 pays rates, not only on his house and outbuildings, the use of which he enjoys, but also on his land. I like to refer to this as part of his stock-intrade. Whether he has 13 children or none, whether or not he is married, he must pay this impost. In equity, it would appear quite impossible to justify the continuation of various items, such as health, coming within rates expenditure.
The figures I have mentioned are quite conservative. They will probably be exceeded. We on this side of the House maintain that the farmer will pay an extra £4 million in rates this year and that he has paid since 1962-63 an extra £6 million in rates. This is a very serious matter because of its disastrous effect on agricultural expansion. It is because of that we on this side of the House prefer to be conservative in our criticisms. It is impossible for the Minister to controvert  the figures I have given. They are correct.
What are the causes? It can quite properly be argued that a farmer uses the roads more than the urban or town dweller does. From that point of view, it can, perhaps, be argued that more should be charged against him from the point of view of roads. The idea 50 years ago was that the rates paid for the roads and small items such as the very restricted medical services, the county homes, and home assistance. Since then the pattern has changed completely. The rates now have to pay 50 per cent of the cost of health services. A farmer, earning £700 or £800, with five or six children, would, if he were an employed person, pay neither PAYE nor any other sort of tax. As a farmer, he must pay rates regardless of family commitments. It is our policy that the cost of health services, outside of hospitalisation, should not fall upon the rates. This would result in reducing the rates by something like 4s. in the £. There is no more justification for a situation in which a man, who would not have to pay income tax, or any other sort of direct taxation, has to pay rates, and that without any consideration at all, for his responsibilities to the children God has blessed him with.
I have given the relevant figures. They are conservative. If the Minister wants to play politics—I am sure he does not—he may throw back at me something which may apparently put my figures awry. One must take into account that you have the primary grant varied from three-fifths to 80 per cent and the secondary grant over £20 valuation changed from 25 per cent to 30 per cent. These changes were, of course, forced upon the Government because of the fantastic impost of rates. I describe this as a sop to Cerberus. This is the action of the man who puts the piece of rag in the hole in the dyke in the hope that it will hold the water in. There is no hope for any alleviation in rates until there is a major change in policy. One of the changes should be the removal of the health charges, outside of hospitalisation, from the rates.
This Estimate is necessary to patch  the hole in the dyke. From that point of view we accept it. It is not evidence of solicitude on the part of the Government for the farmers. It is not evidence of the Government's solicitude for the farmer in the position in which he finds himself in relation to rates. This is a political expedient. The Government have to do this because of the increasing burden falling on the farmers since 1962-63.
Mr. McQuillan: For the past few years the Government have been hoodwinking the farmers in regard to examining their problem of rates, particularly as it refers to land. The aim of the Government—and, I presume, of the main Opposition Party—is to increase output from the land. If proper use is made of the land, we can give the community greater social benefits, embark on more desirable educational programmes and provide the health services to which the people are entitled. We have few sources of wealth in Ireland, apart from the land. One would imagine, therefore, that the Government would take all possible steps to ensure that the maximum production is achieved from the land. Instead, we have this annual tinkering with inducements to farmers to increase output.
This measure of relief to the farming community will not increase output by one iota. I will go further and say that, as far as the expenditure of this money is concerned, 50 per cent of it is being misspent and should be channelled in a different direction if the Government are serious about increasing production. The people who will benefit from this relief measure are mainly the large farmers. I worked out the figures for the Minister last year, showing beyond contradiction that aid is being given, not to the man who deserves it most and who has to produce in order to exist —the small man—but to the bigger man. No attempt is being made by the Government in this measure to segregate the gentleman farmer, the telephone farmer, the rancher, the race-going farmer from the working farmer. No attempt is made to segregate  the absentee farmer, particularly in the midlands, from the small farmer. He will get the same benefits in proportion to the size of his holding, although his land may not be producing one-tenth of what it is capable of producing.
Surely the time has come to examine that situation? What the Government are doing is subsidising inefficiency and laziness, subsidising those who can spend two days a week going to race meetings and other sporting functions. They are being given relief of rates at public expense in order to have a good time for themselves. It is time that outlook was changed. We have in Ireland from 11,000 to 12,000 holdings with a total poor law valuation of £2¼ million. That represents three per cent of the holdings of Ireland. We have another 200,000 holdings, representing 70 per cent of the holdings in the country, with a total poor law valuation of less than £2 million. Therefore, we have three per cent of the holdings in Ireland with a greater poor law valuation than 70 per cent. We can see straight away where the money is going which is given towards the relief of rates.
If the Government are serious about the implementation of the Land Bill, they should spotlight those 12,000 holdings to which I have referred and which between them have a bigger valuation than 200,000 holdings. One of the ways the Government could acquire the necessary land to produce the 45-acre holding is by going after the people in that limited group. What do they do? They pass legislation to ease the burden of rates upon them. Twenty years ago a commission reported on the methods by which incentives could be given to small and medium farmers to increase output and, at the same time, to create a pool of land which would enable a greater number of economic units to be established. One of the recommendations was that, instead of helping inefficient farmers by giving them relief on rates, the rates should be doubled and trebled on every acre they had above a certain figure. That recommendation was made by Most Rev. Dr. Lucey, Bishop of Cork. I am glad I have him behind  me when I make it. That is one method by which the necessary pool of land could be acquired. If we go on voting money on the basis we are asked to do so today, no pool of land will be made available. Instead, we are helping these people with anything from 300 acres to 2,000 acres—some of them with chain farms of 300 acres or 400 acres each—in a country where the majority of the small farmers are huddled together in groups on uneconomic holdings.
I want the Minister to realise—the major Opposition Party should realise it, too—that a political promise to completely derate land is not for the benefit of the small farmer. The small farmer is not the fool he is taken for by the people who make this promise. Those who will benefit by that type of action are the large farmers, the inefficient farmers. The people who talk about this should tell us whether they are serious in saying they will completely derate agricultural land for those farmers who do not know what to do with their money and who are not concerned with getting the utmost out of the land.
Mr. McQuillan: It is easy to talk about the cost so far as the small farmer is concerned. The man under £25 valuation has at least two-thirds remission already. Does the Deputy think he is conferring some wonderful benefit on the small farmer by suggesting his rates be completely remitted but, at the same time, he will be contributing to a health scheme in another form of rates contribution to which the Deputy has referred?
Mr. McQuillan: He must be if you bring in a contributory scheme. However, there is another time and another Estimate for debating the question  of removing the burden of the health services from the rates. That is a matter which deserves most serious consideration, so that the public will be under no illusions as to what benefits are to be conferred on them if such action is contemplated.
Mr. McQuillan: Here we have this latest relief of rates measure which I say will be a blanket relief, irrespective of what type of land you have or the amount of land, or whether or not the land is being efficiently used. I should like the Minister at this stage to have examined in his Department the possibility of making available, as soon as possible, funds for local authority which is prepared to aid the farmers whose lands are flooded for six months of the year.
I think this House would be unanimous in supporting the Minister if he said that instead of giving a substantial sum of the taxpayers' money to the rancher in the form of rate relief, he would instead divert that money, or portion of it, to the small farmer in any part of the country whose land is subject to flooding. The position at the moment is that along the river Shannon and the river Suck, and along the major tributaries of the Shannon, the small farmers have in many cases more than 50 per cent of their land flooded from October to March. I know many farmers who do not see their land from October, and perhaps sometimes from November, until the beginning of March.
Why is it not possible to aid these people? Surely it is a terrible condemnation of a Government that after years of waiting, and of promises that our drainage scheme would be undertaken, these people are still waiting for relief in that respect? While they are waiting for the necessary drainage works to be implemented, they still have to pay rates on land which they cannot use. I cannot picture the Minister, or any Deputy, deprived of his income or salary for six months of the  year and then being asked to pay income tax on that portion. I know the row that would be kicked up.
We are asking farmers whose lands are flooded for five or six months of the year to a depth of three inches, or even two to three feet, to pay rates on that land. The Minister has first-class officials advising him, men who would be able to devise a suitable scheme whereby the necessary funds could be channelled towards the relief of the type of farmer to whom I have referred. There would be far greater support from the general public for such a measure if they felt it was contemplated that these people were to get aid rather than some of the people concerned, that is, the combines, the telephone farmers, the absentee landlords and the haw-haw gentlemen who seldom see their estates except for two or three months of the year.
As regards Deputy McQuillan's talk, he said this is only tinkering. This is an expensive type of tinkering, I can assure the Deputy, because providing £11.72 million for farmers' rates can hardly be regarded as tinkering. My idea of tinkering is something small and trivial and not of much use. I cannot agree with Deputy McQuillan, though he has made the statement before, that it is the larger farmers that get relief rather than the smaller farmers. After all, as the Deputy is aware, on the first £20 valuation, every farmer, whether large or small gets 80 per cent relief of rates, that is, he pays only 20 per cent of the rate. That must benefit the small farmers and, in fact, very much more than it would the bigger farmers.
According to Deputy McQuillan, about 80 per cent of the farmers are under £20 valuation and, therefore, they get this relief of 80 per cent. Consider the amount it takes to pay for these various subheads: primary allowances, £8 million, or within £25 of it; employment allowances, another million and supplementary allowances to landowners over and above the £20  valuation, £2,250,000. On that division, therefore, it is evident the small farmer is benefiting very considerably from the way the grants are administered.
There is one other item I should like to mention. When Deputy Donegan spoke about the new health scheme which is proposed, did I understand him to say that the small farmer would not have to contribute at all?
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