Oireachtas Joint and Select Committees

Tuesday, 17 November 2020

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach

Finance Bill 2020: Committee Stage (Resumed)

Photo of Denis NaughtenDenis Naughten (Roscommon-Galway, Independent) | Oireachtas source

The difficulty I have is that not only are we discussing the increase in carbon tax from next spring but we are looking at increasing the carbon tax for agricultural fuel from now until 2030. I will deal with this incremental increase in carbon taxes in far more detail when discussing one of my later amendments. Specifically at this point, we are looking at an additional carbon tax on the agricultural sector of €27.3 million next year. This is a sector that does not have an alternative available to it.

The objective behind all of these carbon taxes is that, over time as people buy new cars and upgrade their heating systems, they would move to more carbon efficient alternatives or zero carbon alternatives. This is the objective behind the introduction of carbon taxes. This should be done in incremental blocks rather than annually because if it is done on an annual basis, people tend to absorb it rather than being motivated to change. In the case of the agricultural sector and the farming community, there is not an alternative for them to move to. Diesel is the only fuel that can currently be used in the agricultural sector. Farmers cannot go and get an electric tractor. The machinery is not available.

The Minister made a point regarding the rebates in the agricultural sector. They are all well and good if someone has a significant tax liability but the reality is, as shown consistently by Teagasc farm surveys, that many farmers are not making enough income on their farms to generate a tax liability in the first instance. As a result, they are not in a position to claim the relief back for diesel. The practicality is that farmers do not have an alternative so why are we taxing them in the manner we are? This is turning out to be purely a tax rather than an environmental tool to get people to change.

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