Martin Ferris (Kerry North-West Limerick, Sinn Fein) | Oireachtas source

The Finance Bill as it deals with farm-related revenue issues has some positive aspects. Capital gains tax relief will assist in farm restructuring. The extension of the 50% stock relief has also been welcomed. On the other side, however, the increase in capital taxes and the 10% reduction in capital acquisitions tax threshold as applied to farms will have a negative impact. Most capital taxes applied to farms are on intergenerational transfer and do not represent an actual tax on a capital gain. That will further impede the necessary transfer of land to younger farmers on top of previous cuts to installation and other schemes designed to encourage farm transfers in a situation where a significant proportion of Irish farmers are over 65 and would like to pass their land on if the proper structures were in place. One of the most negative measures was the ending of the early retirement scheme in conjunction with the end of installation aid.

Small to medium farmers, particularly in the western counties, also suffered from other budgetary measures. Among these were the changes to the disadvantaged area scheme and a €5 million cut to the suckler welfare scheme. Many struggling farm families will also be severely impacted by the cuts in the farm assist programme administered by the Department of Social Protection. That has played a significant role since its introduction in providing some relief for low income farm households, many of which depend on farm assist to supplement income levels well below the national average. I doubt there is a Deputy in the House who has not had representations from small family farmers who are practically destitute and completely dependent on the farm assist scheme to put food on the table. The cut was one of the most retrograde and disgraceful aspects of any budget.

The cuts are actually far more severe than other social protection programmes and entail a significant cut in farm income for many farm families. Between the cuts made in last two budgets, a family with three children would have seen farm assist cut by 50%, from just over €200 per week to a little over €100 per week. There are currently 11,000 farm families who are part of the farm assist scheme but the majority of those families are in the western part of the country, with the Taoiseach's own County Mayo alone having over 1,800 families who rely on the scheme

Another issue that threatens farming families is the proposal to base third level grants on the market value of the land and other assets rather on the actual household income. Many farmers who have what would appear to be above average holdings earn well below the average industrial wage and it is unfair to effectively deny children the opportunity to attend third level based on an arbitrary change in the criteria for the awarding of grants.

Farm families, and rural families in general, have been impacted along with the rest of the population by other negative measures introduced as part of the austerity programme. Among them is the property tax, which has generated considerable opposition with reports of large crowds turning out at meetings around the country. It is also clear, as we can see from the meeting of front-line public sector workers in Tallaght on Monday, that despite the euphoria that was being talked up regarding the Government's deal on the bank debt, people do not perceive there will be any benefit to them, in spite of the claim that the burden will be significantly reduced. Indeed, the longer austerity continues and the more people realise the negative impact it will continue to have on all aspects of their lives, the more it will dawn on them that the extension of the debt repayment schedule, with no relief for Irish people themselves, is a bad deal.

The indications from the IMF and elsewhere seem to signal clearly that it would not be in the least bit happy if the Government or its successor were to use the potential easing of the debt burden to reduce the level of cuts or perhaps even to inject some badly needed capital into a stalled economy. One must suspect, however, that this idea finds a willing reception among members of the Government who, apart from the bank debt and the fiscal crisis engendered by it, are in any event ideologically committed to cutting public provision and attacking the public sector by undermining wages and conditions, and by selling off lucrative parts of State companies and State assets. It is clear that we need a stimulus programme but the commitment is to go in the opposite direction, including the short-sighted sale of State assets which could be utilised as part of encouraging economic growth.

In a reply to a question I put last week regarding NewERA, the Minister for Agriculture, Food and the Marine stated that the Government still intended to use it to supervise the investment strategies of State companies that could work together in certain areas, specifically in the general area of energy, which would involve the ESB, Bord Gáis, Bord na Móna and Coillte. Unfortunately, the clear intent as signalled by the McCarthy report on State assets, and the Government decision to follow its recommendations, is in the opposite direction, and will involve not the positive utilisation of public companies and their assets, but their sale or lease to the detriment of any longer term plan of public investment. Indeed, one doubts whether the initial concept of NewERA, which involved a specific investment sum, would be tolerated by the troika, which is clearly opposed to any public investment of this type to help stimulate growth.

The lack of such stimulus and the commitment to austerity is why we have this Finance Bill with the measures that flow from the last austerity budget in December. Contrary to what democratic economies and societies learned from the 1930s on, some people have still not learned that we cannot cut our way out of a recession. If there is leeway in repayments on the debt, that should be regarded as a potential opportunity to inject some stimulus into the economy. The evidence from around the country is crystal clear. Just as every euro invested in growth and job creation has a positive multiplier effect, so every euro taken out of the economy has an opposite and negative impact. This Finance Bill is part of the mechanisms of austerity by which it is being implemented and that is why my party will be opposing it, just as we opposed the budget on which it is based in December.

I mentioned many aspects of the budget in my remarks this evening. As a Deputy from rural Ireland, I know the significance of each small contribution to survival on the family farm, such as farm assist. I cannot understand how rural Deputies who know the crisis faced by small farmers could come in here and vote in support of the disgraceful cut by the Government to that lifeline.

Not alone is the Government voting away that lifeline, it is penalising ordinary innocent decent people who kept the struggle going in a way of life, and the previous Government, and now this Government, have carried out a policy of driving them off of their holdings. That is what is happening here. Farm assist could help some to get over the current impasse but, by reducing it and by also taking away the installation aid and early retirement from the farming sector, the Government has done untold damage to that community. I will leave it at that.

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