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Financial Resolution No. 5: Excise (Continued)

Wednesday, 5 December 2012

Dáil Éireann Debate
Vol. 785 No. 2

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(Speaker Continuing)

[Deputy Denis Naughten: Information on Denis Naughten Zoom on Denis Naughten] Farm families have suffered a 22% drop in income this year. Taking into account the changes to tax and PRSI that affect everyone in the economy, it will put major pressure on families throughout the country and, in particular, farm families. On top of that, there were further announcements on the suckler cow welfare scheme, the sheep grassland payment and the disadvantaged area scheme. These announcements affect farmers in the west disproportionately. The farm assist scheme will have an effect on household income. The resolution before us will take €21 million out of the pockets of farmers. There is an EU calculation on how VAT is paid to farmers but my understanding is that the rate is based not on the value of VAT that has been paid in the previous three years but on the rate of VAT over the previous three years. There is a significant difference because farmers do not receive a refund of the VAT they have paid, only in respect of the average rate over the previous three years.

A further difficulty is that agricultural inflation is increasing. As a result, farmers are being short changed. Preliminary estimates for agricultural price indices for 2012 show energy costs have increased by 8.6% and feedstuffs by 5.5%, well in excess of the rate of refund proposed of 4.8%. The resolution before us means that if a farmer goes to the mart and sells an animal after 1 January for €1,000, he will receive €4 less per head as a result. While the basis of this is to ensure it is not intended as an aid or assistance to the farming sector, it is supposed to be fair compensation for VAT incurred by farmers. The way the system is structured, it is not based on the value of VAT paid over the previous three years by the agricultural community. It does not take into account the difficulties caused by the increase in agricultural inputs and the fact that the returns farmers receive for produce has decreased this year. The rate of return to the farmers, as a percentage of VAT, has also decreased.

We have an unregulated supermarket sector putting further pressure on farm gate prices and farmers are losing out on the double. I ask the Government to look at this again because farmers are being short changed. The structure of the system means farmers are not getting a true and accurate return with regard to the amount of VAT they pay.

Deputy Dessie Ellis: Information on Dessie Ellis Zoom on Dessie Ellis It is very disappointing to see increases in VRT, motor tax and the trade licence plates. Not only will this affect ordinary citizens, it will affect the motor industry. We talked about giving a fuel rebate to the haulage industry, which is welcome, but we are obliterating it through these increases. The Taoiseach said his main reason for basing this on lower emissions was the loss of revenue. This is not a good enough excuse. We originally advertised for people to buy cars on the basis of low emissions and we made a big meal of it. Now, we are reneging on the promise and it is unacceptable. Part of the promise was the Kyoto Agreement on emissions. The measure was beefed up as if it would help on the emissions side. Where does that leave us if we are in breach of the Kyoto Agreement as a result? This has not been properly examined. Could we not have introduced a scrappage scheme or something for the motor industry? That would have been a good idea.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath This budget has been punitive for farmers. Whatever Deputy Tom Hayes says, it applies more to small farmers. PRSI, farm assist and this VAT measure make it very serious. The agriculture industry has been suffering over the past year. Although it had a lift in the past two years, the weather was bad over the summer and is bad again now. The sum of €21 million is a lot to take from small rural communities and will have a major impact.

With regard to motor tax, there is a total breach of faith and trust. It happened also in the previous two years beginning with the former Minister, Brian Lenihan.

Deputy Paul Kehoe: Information on Paul Kehoe Zoom on Paul Kehoe Deputy Mattie McGrath supported that Government.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath I did and we can all learn from our mistakes.

Deputy Paul Kehoe: Information on Paul Kehoe Zoom on Paul Kehoe Deputy Mattie McGrath is still supporting them.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath I am also supporting the farmers in Wexford. How will we encourage communities, such as a school or a family, to do something for the environment? The Minister for the Environment, Community and Local Government might be in Doha, or wherever he is-----

Deputy Michael Healy-Rae: Information on Michael Healy-Rae Zoom on Michael Healy-Rae He is busy.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath -----but people voted with their pockets and bought cars with low emissions. I need a big car because I have a big family but the breach of trust is not fair.

Deputy Tom Hayes: Information on Tom Hayes Zoom on Tom Hayes I knew Deputy Mattie McGrath's van would be sold.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath I cannot believe the vehicle registration measure. I am being magnanimous in that I do not know if Richie Ryan is late or if he is still alive. I do not want to be mean to him. The budget of Richie Ruin contained a terrible thing but now the Government is taxing the hearse. Will it tax the shroud or the habit next? I cannot believe the sneaky things that are included here.

Deputy Paul Kehoe: Information on Paul Kehoe Zoom on Paul Kehoe Deputy Mattie McGrath should explain himself. We do not know what he is talking about.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath It is punitive in the extreme. The Government has increased the tax on the hearse, the vehicle that will bury us all when we are deceased. Richie Ryan did not do that.

Deputy Paul Kehoe: Information on Paul Kehoe Zoom on Paul Kehoe The Deputy is mixed up

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath I am not mixed up. The habit and the shroud are not safe.

Deputy Paul Kehoe: Information on Paul Kehoe Zoom on Paul Kehoe Deputy McGrath is thinking about some other budget.

Deputy Mattie McGrath: Information on Mattie McGrath Zoom on Mattie McGrath It is in the book.

Deputy Michael Healy-Rae: Information on Michael Healy-Rae Zoom on Michael Healy-Rae I put on record my total opposition to another attack on small farming communities at a time when our farming communities and small family farms have had the worst eight or nine-month period ever. They see the Government letting them down and taking money out of their pockets at a time when off-farm income has diminished. Farmers might have had a part-time job during the better years but that work is gone and they still have the same costs imposed upon them every day. The money being taken out of their pockets will have a real impact on them.

With regard to motor tax and vehicle registration tax, it is a poorly thought out decision because we should be trying to encourage people to motor. When people are motoring, they spend more money because they go places and they do more things. Unfortunately, the cost of motoring is prohibitive so people will not engage in the travelling they might have done in the past. I voice my opposition to these measures, which are poorly thought out. They will hit the most vulnerable in society, those who must keep a motor car and must travel to work. I appreciate that excise duty on fuel was not increased but if fuel halved in price tomorrow morning it would still be very expensive. If the average car or van takes €100 to fill, it would still be a lot of money if it was €50. I am thankful to the Government for not increasing excise duty on fuel but I do not like to see changes to VRT and motor tax.

Deputy Tom Hayes: Information on Tom Hayes Zoom on Tom Hayes Is Deputy Healy-Rae thinking of coming over to join Deputy Mattie McGrath?

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett As it now is 8.50 p.m. and the time allocated for debate has expired, I must put the question, "That Financial Resolutions Nos. 3, 4 and 5 be agreed to".


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