Wednesday, 23 May 2018
I thank the Minister of State for coming to the House. I have a few specific questions related to agriculture and particularly the relationship between Revenue and his Department. What is the position on approval by the European Commission of a levy on a lower rate of stamp duty for the purposes of consolidation? Farmers are keen to know when it will happen. Will it be applied retrospectively from January?
Will the Minister of State consider making changes to the age limits for farm transfers to young trained farmers to enable those who want to take up farming to purchase from non-relatives at the lower stamp duty rate in order that they will not have to be aged under 35 years. I am particularly mindful of returning emigrants who wish to purchase land for a farming career.
Some of this year's budgetary measures related to agriculture contain sunset clauses which will end on 31 December. I refer, in particular, to stock relief for young trained farmers. Is work being done to extend it beyond this year?
Low income farmers faces pressures in complying with Revenue requirements as they have to engage accountants and so on. That is expensive when, more often that not, they record little or no profit. I acknowledge that newspapers are reporting today that dairy farmers are making increased profits, but that is not the case for many farmers in the west, particularly in County Mayo, from where I come. Simplicity is one of the attributes of an effective and good tax system. Can the reporting procedures be made simpler for farmers, particularly those on low incomes?
I am concerned about the impact of vulture funds on the farming community, particularly now that more loans will be sold off. My experience in talking to farmers who find themselves in this position is that they have performing loans but that they need them to be restructured to suit their business or income. Will the Minister of State do everything he can to force the vulture funds to engage with farmers to work out a restructuring plan with them because the vulture fund-farmer relationship is in danger of having detrimental short, medium and long-term effects on the fabric of communities in rural Ireland?
The script I have been given relates mainly to the final issue raised by the Senator, but I will get to the other points she raised.
While the Minister for Finance and Public Expenditure and Reform has responsibility for taxation matters generally, the Minister for Agriculture, Food and the Marine liaises closely with him on agri-taxation policy. A public consultation process on agri-taxation was launched recently by the Departments and we consult regularly in that regard with the farm bodies. The Senator might consider making a submission as part of the consultation process on the earlier issues raised by her.
Operationally, the Revenue Commissioners have responsibility for taxation matters. They have assured me that they understand temporary cash flow difficulties can arise for taxpayers, including farmers, from time to time. When cash flow related challenges arise or are expected to arise, Revenue encourages early engagement with it as a means to agreeing a way forward in achieving tax compliance. I am also informed by Revenue that, in its experience, where such early engagement occurs, it is generally possible to arrive at an accommodation that gets the taxpayer successfully beyond the payment pressure point. The Government has committed to assisting all viable small and medium enterprises operating in Ireland to support economic growth and employment in the economy.
Primary responsibility for banking policy lies with the Department of Finance which liaises with the Central Bank and the Financial Services and Pensions Ombudsman on consumer protection in the area of personal banking, the purchase of financial products and financial issues generally. I am informed by the Department that the sale of a loan does not change the terms and conditions attached to it before it is sold. Borrowers have the same protections and rights and obligations as they have before the sale. They include the consumer protection code, the code of conduct on mortgage arrears and the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Lending to Small and Medium-Sized Enterprises) Regulations 2015, as amended. Notwithstanding the fact that borrowers are protected under the existing framework, the Government is supporting the Consumer Protection (Regulation of Credit Servicing Firms) (Amendment) Bill 2018 that was introduced by Deputy Michael McGrath last February. The Bill which was passed on Second Stage in the Dáil in March will require credit owners to be regulated. With the approval of the Government, officials from the Department of Finance are engaging with the Office of the Attorney General, the Central Bank and Fianna Fáil to resolve technical issues with the Bill and draft amendments.
I urge people who are having difficulty in making repayments to financial institutions to seek professional assistance in finding ways to resolve the issue. I am aware of the work being done by some of the representative organisations in helping farmers. I am conscious that the prolonged winter will have put some individual farmers under pressure in respect of cash flow. In recognition of this, the Minister for Agriculture, Food and the Marine recently met the chief executive officers of the main banks and discussed the current cash flow and liquidity position of the primary sector. The Minister emphasised to them that they should recognise the temporary and exceptional nature of the current position and that they should be flexible and put in place measures to support their customers. They indicated that there were no signs of a liquidity issue in the sector as a whole, while acknowledging that there might be pressures in individual cases. They assured us that they would provide supports such as extended overdraft facilities and term loans for their customers and asked that those in difficulty contact them as soon as possible. The Minister asked them about their approach to non-performing loans and stressed that any sale of farm assets impacted negatively on the ability to meet ongoing commitments. The banks that have sold or are selling such loans have informed us that the proportion of farms affected is relatively low and that sales occur mostly in cases in which there has been no meaningful engagement with the banks.
I thank the Minister of State for his reply. I appreciate that I asked a number of specific questions that were not indicated in the matter raised by me. I will seek further answers from the Minister for Agriculture, Food and the Marine. It is important that there be better congruence between the Departments of Finance and Agriculture, Food and the Marine to ensure farmers who are struggling with all of these issues will be given clear and accurate information and that officials within the Department of Finance and Revenue understand the nature of farming and the flexibility needed in that regard in that farmers may find themselves without an income for a number of months.That is due, in no small part, to delayed payments by the Department of Agriculture, Food and the Marine. Such delays can be caused by computer problems, issues with commonage framework plans and so forth. That congruence can create an easier climate for farmers to be able to meet their obligations but also to be helped where needed.
I thank the Senator. Some of the issues she raised at the outset including stamp duty, stock relief and changes to the limits merit further consideration. Stock relief has certainly rolled in the past. The same is true of the capital acquisitions tax relief, the value of which has increased recently. In 2012 and 2013, a full agritaxation review was conducted for the first time in a generation. As a result of that review, there has been a more continuous and ongoing collaboration and communication between Revenue, the Department of Finance and the Department of Agriculture, Food and the Marine. That must be welcomed and it must continue so that we can fine-tune our agritaxation policy to reflect realities on the ground. That is something to which we are all committed.