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Finance Bill 2014: Second Stage (Resumed) (Continued)

Wednesday, 5 November 2014

Dáil Éireann Debate
Vol. 856 No. 2

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(Speaker Continuing)

[Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming]  When a country comes out of a recession, there are economic wounds which cause suffering for many families and individuals. However, there are also social wounds, which are twice as deep and twice as divisive. This budget actually serves to aggravate those social wounds. It might heal the economic wounds for some people on higher incomes, who will be a little better off, but it will exacerbate the social wounds. The budgets for this year and next should have seen the allocation of resources focused on healing some of those festering social wounds. It is not surprising that people are dissatisfied with all the political parties. As they see it, we are not looking after ordinary people. We all are aware of the view that, when it comes to politicians, it is essentially a case of "A plague on all their houses." This is not confined to my party or the Minister of State's party; it is across the board.

What is lacking in the budget is a social conscience. It may be the case that the Government intends to take a calculated gamble that people will vote not with their conscience but according to their pockets. Perhaps some will do so, but that is too clinical for me and it is not the way to go about rebuilding our society. People certainly do want to see planning for a recovery, not just minor tweaks here and there. Even though there are some good things in the budget, including a small increase in child benefit, it is really an example of old-style politics. There is no vision and no social conscience, simply gimmicks and a few bob given out here and there. The only thing that was not done was to increase the price of the pint, although cigarettes were hit.

Deputy John Deasy: Information on John Deasy Zoom on John Deasy If anybody on this side of the House is engaging in gimmicks, he or she did not lick it off a stone.

Deputy Sean Fleming: Information on Seán Fleming Zoom on Seán Fleming Both of our parties engaged in this type of politics in the past. I hoped people had learned a little bit and would want something better from the Oireachtas than a few bob here and there.

Several colleagues opposite referred to agricultural relief. I hope the Minister will listen to what has been said on both sides of the House and by the Irish Farmers Association in this regard. Even before the IFA issued a press release, several farmers in my constituency were on to me about the issue. The Finance Bill is full of little nooks and crannies that will help foreign direct investment companies, investment schemes, share schemes, stamp duty schemes, dividend schemes and so on. Farming is our largest industry, but there is much less on offer here for it.

There is a problem with the definition of "active farmer". In my own parish and the neighbouring parish there are only a handful of people who are full-time farmers, deriving their entire household income from the land. One must be a dairy farmer on a fairly large scale to be able to do that. Certainly, it is not the norm. I accept that the Minister's intention is good here in that he wants to assist with the hand-over of farms and separate full-time farmers from hobby farmers. Unfortunately, however, the definition he uses is counterproductive. It suggests an individual with an off-farm source of income for which he works a 40-hour week would need to farm for another 40 hours in order to qualify as an active farmer. On the other hand, a farmer with no off-farm employment would have a lower time commitment to qualify, as his or her normal working time might be only 30 hours in some cases.

Teagasc has indicated that 43% of cattle-rearing farmers, often known as suckler farmers, have an off-farm source of income. In my local town of Mountrath, the marts now take place midweek and in the evening. After leaving this House on a Wednesday night at 9.30 p.m., I often drive through a Mountrath that is chock-a-block at 11.30 p.m. These are farmers with daytime jobs who must go to a mart that begins at 7.30 p.m. and runs until 12.30 a.m. or 1 a.m. After selling their cattle, they must be up at 7.30 a.m. for their day job before returning home to farm at night.

I am not sure how these things can best be measured, but the 40 hour restriction must go. What is happening in Mountrath is happening in towns in every county in Ireland. There are still Friday evening and Saturday marts, but some of the busiest are the evening marts. The definition of "active farmer" should be amended in light of what has been proposed by the IFA, which is in the spirit of what the Minister said he wanted to do. This issue affects farmers in a range of ways, including when it comes to stamp duty relief between family members. There is a big word for it, consanguinity, which does not mean much to most people but is well understood by legal practitioners. We want to make sure people are not caught out in that way. A farmer in his early 60s who came to see me explained how his son has a full-time job but also puts in a lot of hours on the farm. If the son wants to take over the farm, he will either have to give up his job to qualify for the relief or else keep his job and pay the top rate of capital acquisition tax. The problem is that the farm income is not large enough to support both the son and his family as well as his parents. I hope the Minister will make the change that the IFA has proposed.

In regard to forestry and clear felling income, there is an issue in that a lot of the income comes in at the very end of the period and can thereby shove people into the high income earner restriction. I submitted a parliamentary question some weeks ago which pointed out that when one sells land for any crop in Ireland, the whole thing is subject to capital gains tax, the exception being where one sells land that is forestry, in which case the land is subject to capital gains tax, but the crop - namely, the trees - is deemed to be income. Forestry crops are treated differently from every other crop, with the former, because it is considered income under the tax code, subject to PRSI and the universal social charge. When one sells land with forestry which is near maturity, as some people have to do, a large chunk of it will be deemed to be income arriving in the one year and will be subject to PRSI, USC and income tax at the top rate.

There are many issues to discuss. Many of the details in the Bill are good, but my concern is that it is coming out of an unfair budget.

Acting Chairman (Deputy Marcella Corcoran Kennedy): Information on Marcella Corcoran Kennedy Zoom on Marcella Corcoran Kennedy Deputies John Deasy and Joe O'Reilly have proposed to share time. Is that agreed? Agreed.

Deputy John Deasy: Information on John Deasy Zoom on John Deasy I will focus on measures in the Bill which relate to what is commonly referred to as the double Irish tax arrangement. I will also touch on the relevance of legislation which would introduce mandatory collective bargaining, and the impact of such legislation on what is in this Bill. The relationship between our tax code and corporations, particularly overseas companies, is changing rapidly. What has become clearer in recent weeks is that this is not a situation for which we opted voluntarily. The reasons behind the ending of the so-called double Irish regime have more to do with the OECD and the European Commission than any decision made by Cabinet.

In his introduction of the Bill last night, the Minister, Deputy Michael Noonan, said that the double Irish provision was damaging Ireland's reputation. That is fair enough, but I am less concerned about that than I am about the impact its removal will have on inward investment. The reality is that the OECD rules on base erosion and profit shifting are changing.

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