Lukewarm reaction by farmers to Budget 2018
There has been a diverse range of reactions by farm organisations the Paschal Donohue’s announcement of Budget 2018.
IFA President Joe Healy said today’s Budget announcements of increased funding of €25m for low-income farmers through the Areas of National Constraint (ANC) and a low-interest loan package for farmers, provide some recognition of the market and income difficulties facing farming enterprises in 2017.
“The increased funding of €25m announced for the ANC reverses some of the cuts imposed on the lowest income farmers in previous budgets.
“This must be the first step in the full restoration of ANC payments, which were cut by €50m in Budget 2009”.
However, he said the failure of the Government to increase the Earned Income Tax Credit to match the PAYE credit, as committed to in the Programme for Government, maintains the inequity in the income tax system between employees and the self-employed and impacts disproportionately on lower income farmers.
Joe Healy said that the €200 increase in the Earned Income Tax Credit does not go far enough.
“The Government has chosen to continue the discrimination between employees and self-employed in the income tax system for yet another year. It is simply not right that a farmer earning €16,500 will be paying €500 a year more in income tax than an employee next year.
“The Government has reneged on a clear commitment in the Programme for Government that the PAYE and Earned Income Tax Credits would reach parity, of €1,650, by 2018”.
The President of ICMSA has described today’s Budget as very disappointing from the point of view of farm families and he described as inexplicable the fact that the Budget contained no measure whatsoever to the counter growing problem of price and income volatility that was trapping farm families in a very precarious financial position.
Comer said that farmers’s disappointment would focus on the non-introduction of a Farm Management Deposit type scheme that would have permitted farmers to deposit money in a government supervised and regulated scheme in ‘Good’ years which they could then draw down in ‘Bad’ in the event of price and income collapses of the type experienced so catastrophically in the dairy markets just last year after milk price fell below the cost of production for 18 months duration.
ICSA president Patrick Kent welcomed the announcement that land under solar panels would be classified as agricultural for the purposes of Capital Acquisitions Tax relief and Capital Gains Tax (CGT) retirement relief, subject to certain limitations.
However, he lamented the fact that there was no increase in the thresholds for CAT liability, which remains at €310,000 for category A, €32,500 for category B and €16,250 for category C.
Macra na Feirme National President James Healy has given a lukewarm welcome to Budget 2018 saying the budget offers, ‘something for everyone but it didn’t go far enough for our young farmer base.’ He continued, ‘In many ways Budget 2018 is an inch deep and a mile wide.’
The organisation welcomes the Brexit Loan Scheme, President Healy remarked, ‘Access to funding is a struggle for young agri entrepreneurs, we welcome the €300 million announced for the Brexit Loan Scheme. Young farmers must be a strategic priority within this allocation.
The Minister for Finance specifically mentioned the intergenerational shift in farm ownership and management in his budget speech and with this in mind Macra na Feirme calls on Irish banks to prioritise young farmer access to this line of credit.
The maintenance of young farmer stamp duty relief for inter-family transfer is important in the context of a rising stamp duty on commercial property. This young farmer relief supports intergenerational renewal.’
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