Oireachtas Joint and Select Committees

Wednesday, 6 November 2019

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

Finance Bill 2019: Committee Stage (Resumed)

Photo of Denis NaughtenDenis Naughten (Roscommon-Galway, Independent)
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I move amendment No. 78:

In page 88, between lines 13 and 14, to insert the following: “40. The Minister shall, prior to 1 May 2020, publish a report on reducing the impact of carbon tax on agricultural production in light of the fact that there are no viable low carbon alternatives available to farmers.”.

This amendment specifically examines the impact of carbon tax on the agriculture sector. Deputy Pearse Doherty articulated many of the issues quite well earlier. Carbon tax is, and should be, about trying to drive change. It should and must differentiate between those who can avoid the tax and those who do not and are prepared to pay it by choice. The difficulty with agricultural carbon taxation is that there is no alternative available to farmers. The objective is to make the country far more sustainable and less dependent on fossil fuels. It should not be about bringing in additional income for the Government. It is about getting people out of their cars and onto buses and trains. As somebody commented when the carbon tax was increased, one cannot put cattle onto buses. That is the reality. We do not have electric tractors and I do not know if there are even hybrid tractors in this country.

There is a provision in current taxation law that allows farmers to get a rebate, which is welcome. However, it is only available to farmers who are liable for tax. The Minister is well aware of the income crisis in agriculture at present. We all have seen the pickets outside meat plants throughout the country. Aside from the beef processors, I could count on one hand the number of beef farmers who will have a taxable income this year, so beef farmers will not be in a position to get a refund in respect of the carbon tax they pay on their green diesel. I accept that this is a complex area, but we must review the mechanism relating to taxation. The difficulty is that carbon tax is a regressive tax for people living in rural communities. They will pay disproportionately far more than people living in urban areas, yet urban areas already have the infrastructure for alternatives in place.

I will give the Minister a practical example. A typical working family in a rural community that commutes to work is facing a carbon tax increase of probably €6 per week. Their counterpart living in the city is probably facing a carbon tax increase of approximately 30 cent per week. The family living in the city has public transport, with buses passing outside their door. There is a State-subsidised alternative available to the family. That is not available in rural communities and that is the challenge we have in terms of taxation. That was articulated earlier, but I wish to focus on agricultural production and farmers. The mechanism in place does not address the issue for the vast majority of farmers who do not have a taxable income. They cannot claim a refund for the carbon tax they are paying. We must find an alternative mechanism to ensure we are not taxing people who do not have an alternative, viable or otherwise, available to them to avoid paying these taxes.