Pat Deering (Carlow-Kilkenny, Fine Gael)

Like previous speakers, I thank the Ceann Comhairle for the opportunity to speak on this Private Members' motion.

As a rural TD, I was appalled to read the motion, and particularly the last sentence, where it "calls on the Government to abandon its anti-rural bias and adopt a fair and balanced approach to the budget". Nothing could be further from the truth.

Never before has agriculture or rural Ireland been mentioned as often in a budget as happened on this occasion. It is hypocrisy from the Deputies opposite to mention this issue when they, in their four-year plan, proposed to reduce the capital agricultural budget by €20 million over the next four years to €150 million, which was totally unacceptable. In this budget, we were in a position in Government - I commend the Minister for Agriculture, Food and Marine, Deputy Coveney - to ensure that the capital budget for the next four years will be €168 million rather than the €150 million those opposite had budgeted for.

In this budget there is a large number of taxation issues which will have a significant effect on agriculture and rural Ireland, a few I which I want to mention. The measures encourage farmers and a return to a career in farming. In the past ten or 15 years, agriculture was treated with disrespect by the vast majority of the outgoing Government. It was unpopular to be a farmer in rural areas or to have anything to do with it. Everybody was encouraged to go and lay blocks, be it in Dublin or in large urban areas.

This budget provided incentives to farm partnership and greater production at farm level. It also stimulates land sales and land transfers. It facilitates new enterprise opportunities in farming and helps the agri-food business innovate and export.

There are a couple of main areas on which I want to dwell. One of the most significant measures introduced in the budget is the new stock relief incentive to encourage farm partnership. For registered farm partnership, the current rate of 25% stock relief will increase to 50% and for certain young trained farmers entering partnerships, a rate of 100% stock relief will be available. This new incentive will run until December 2015 which will encourage an increasing number of farmers into the system where, especially as we approach the ending of the milk quotas in 2015, it will encourage more farmers to develop their quotas.

The stamp duty reduction is important. Budget 2012 reduces the stamp duty rate on agricultural land from 6% to 2% with immediate effect, which is very important. In addition, the half-rate of 1% rate will be applicable on transfers to close relatives up until the end of 2014. This change will substantially reduce the stamp duty payable to the transfer of farms by land gift or sale and it should stimulate the stagnant land market. As Members will be aware, in Ireland land transfers and land mobility is very different from most parts of Europe. I understand that land in Ireland only transfers in one in every 400 years compared to an average of one in every 75 years around Europe.

The capital gains tax relief is also important. Budget 2012 has restructured the retirement relief available on capital gains tax to provide an incentive for early retirement and the transfer of farm assets to the next generation. There has not been a change to the 90% capital acquisitions tax. This means that farms worth up to €2.5 million will continue to be fully exempt from CAT with regard to the transfer to a farmer's son or close relations.

Other tax measures that are beneficial to agri-industry include the additional supports for research and development. The new VAT rate is also to apply to open farms such as pet farms. This is beneficial as the rate increases from 9% to 23%. One of the most important issues, one which was flagged early on and on which we made a commitment in the programme for Government, was the review of the universal social charge and this affects a large number of farmers and seasonal workers in the farming area. Consistent also with the programme for Government on carbon tax, farmers will be able to double the income tax deduction in respect of increased costs arising from the charge in carbon tax. The carbon tax is to increase from €15 to €20 per tonne as and from May 2012 for agricultural diesel. This is very important.

Also, a number of other schemes were introduced such as the AEOS scheme I mentioned earlier. Once we came into Government, the Minister for Agriculture, Food and the Marine did his best to ensure that we had an AEOS scheme. An original scheme was announced with no funding for it.

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