Johnny Brady (Meath, Fianna Fail)

I compliment the Minister for Finance on a marvellous budget. It provides a massive boost for rural areas and hard-pressed farmers. I welcome the renewal and extension of a series of farm tax reliefs, income tax relief and capital gains tax relief at a cost of €14 million in a full year. The two farm stock reliefs are being renewed. The general stock relief allows 25% of any increase in stock values in a year to be allowed as a trading expense. For young trained farmers, the relief is set at 100%. The stamp duty relief for farm consolidation, where two farmers exchange land, will now apply where only one farmer meets the consolidation criteria. The amount of the tax exemption for long-term lease of farmland is being increased to €20,000 per annum for leases of a duration of ten years or longer. An exemption from capital gains tax applies to disposals of farm land outside the immediate family on retirement. The present threshold for the exemption is €500,000 and this is being increased to €750,000 from 1 January 2007. Where farmland that has been owned and worked by a farmer for over ten years is leased for less than five years and is subsequently disposed of to the person leasing the land, the present retirement relief will also apply.

The last three changes are aimed in particular at encouraging the transfer of farm assets to younger and more progressive farmers. The various measures will require EU state-aid approval before they are implemented. The farmers' flat rate of VAT is being increased from 4.8% to 5.2% with effect from 1 January 2007, at a full-year cost of €16 million. This flat rate is designed to reimburse non-VAT registered farmers for the VAT they pay on their inputs. This increase reflects a number of changes in the method of calculating this refund rate following consultations with the farming bodies. These consultations are ongoing.

A competitive farming sector is the key to developing a sustainable rural community. Speaking to the leaders of different farming organisations and people from the farming community in general here yesterday they were pleased with the Minister, Deputy Cowen's provisions for rural Ireland in this budget. It is important that, as farmers are increasingly freed from the constraints of production quota and price supports, they are given the necessary assistance to enable them to invest and innovate and by so doing to be in a better position to compete in an increasingly globalised market for farming produce. It is also important that such assistance is prioritised to young farmers and to those farmers who have risen to the challenges posed by changes arising from the reform of the Common Agricultural Policy and WTO negotiations. The package of rural development measures recently agreed with the farming organisations as part of Towards 2016 has been widely welcomed. It means Government support for farming will more than double in the next rural development period compared with the present one.

This is a time of great change in farming. New schemes of aid for restructuring in the food processing sector, while not directly involving farmers, provide an essential underpinning to adapting our agriculture and food sector to the new realities in EU and world farming. Increases of 15% in forestry premiums and 17% in REPS payments, as well as substantial support for on-farm investment to help meet the requirements of the nitrates directive, reflect our growing concerns about the environment and our awareness of the important role farmers play in protecting our environment.

I welcome the extra €100 million for health-related disability and mental health services announced in the budget. This continues and expands the Government's €900 million multi-annual investment programme announced in budget 2005. This extra €100 million will provide additional residential, respite and day places and other service improvements. The funding will also support the introduction of Part 2 of the Disability Act, which provides for assessments of need and service statements for people with disabilities. These important provisions will start for children under five years with effect from 1 June next year. The funding will also support the continued implementation of the plan for mental health services, A Vision for Change. This builds on the national disability strategy which is a comprehensive and wide-ranging approach to improve the quality of life for disabled persons and to underpin their participation in society. The strategy, backed by considerable levels of investment, also promotes greater co-operation between Departments in the planning and delivery of services for the disabled. The budget acknowledges and reinforces this valuable work. In 2006, we allocated €3.3 billion for disability-specific services across Departments. This has been increased by another 10% for 2007.

I am delighted that the budget will make it easier for ordinary taxpayers to claim and receive their rightful entitlements. Claiming reliefs must be made simpler and easier.

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