John Dardis (Progressive Democrats)

There are two sides to the argument concerning capital taxes. One relates to capital gains tax, while the other relates to inheritance tax and other capital taxes. They are not at a level that would be a disincentive to farmers. The Minister rebutted Senator Ryan's point. There is a level, although I do not know what it is, at which taxation is a serious disincentive to people to act and put money into the economy, and to inward investment.

It is important that farmers are able to transfer property to the next generation, without undue burden, during their lifetime. The inflating value of land reflects developments in the construction industry and elsewhere and feeds back into rural society, which requires examination. A case ran for several years about siblings living in expensive dwellings in Dublin, whereby one sister died and the surviving sister, living in the house, was subject to such high capital tax that she would have to sell the house. That was remedied, rightly so, because there can be hardship in such cases. Anything that can be done to ensure the transfer of land and farms to the next generation, on the consolidation issue to which Senator Mansergh referred, should be done.

I come from County Kildare where the bloodstock industry is very important. There is a perception that the mega-wealthy gain from this. A few do but many small breeders have benefited from the tax exemption which applies only to stallion fees, although it is represented as an exemption on all the breeders' activities. This is a flagship industry. It is mobile because the stallions can travel around the world, and it would be unfortunate to lose good stallions by removing the exemption.

While I understand the pressure coming from the European Commission on this matter, the exemption is positive. Perhaps the way to deal with it is as the Minister has suggested for other exemptions, namely, by applying a cap. Everything above the ceiling would be liable for tax and everything below would be exempt.

This has been a useful debate. Senator Feighan seemed to suggest that the minimum wage affects our competitiveness. The converse is to abolish the minimum wage, which I am sure Senator Feighan would not do. We saw on television last night children in Bangladesh breaking bricks. That is a good example of what could happen if the minimum wage were abolished. That is where unfettered competitiveness leads.