Next Tuesday, October 13, the Minister for Finance Michael Noonan will announce Budget 2016.
It will be the final budget in the term of the current Government and similar to other years it has been preceded by an array of demands from farm organisations.
The IFA has said it is clear that in Budget 2016, the Government must deliver on its funding commitment to the Rural Development Programme (RDP).
Funding of €580m, which has already been committed as part of the RDP, must be provided for farm schemes in the Budget and that this funding will underpin the economic recovery of rural Ireland.
The ICSA has called for full matching funding to facilitate Rural Development programme spend of €580m to cover maximum participation in GLAS; Knowledge Transfer (discussion groups) including possibility of being in beef and sheep; Beef Data Genomics Programme (BDGP) and so forth.
Meanwhile, the ICMSA has repeatedly called for the extension to farm families of the same tax relief for farm leases as that available to non-related families.
Following a meeting of September 17 with Ministers Noonan and Howlin the ICMSA is also reasonably content that the need to extend to 2018 Stock Relief and the Stamp Duty Relief for Trained Young Farmers has been taken on board and will be acted upon.
Staying with young farmers, Macra na Feirme is calling for the renewal of 100% Young Farmer Stamp Duty Relief and retention of 90% Agricultural Relief.
Here are the pre-Budget submissions:
Expenditure priorities for farming in Budget 2016 are:
- Funding of €250m must be allocated for agri-environment schemes in Budget 2016, with full payments for 50,000 participants.
- Funding of €65m for the suckler cow herd must be provided through the Beef Data and Genomics Scheme in Budget 2016.
- A funding allocation of €15m is required for the rollout of Knowledge Transfer programmes for farmers across all sectors in 2016.
- Funding of €40m is required for the TAMS II programme in 2016, to cater for all sectors.
- A targeted payment for the ewe flock, requiring a funding allocation of €25m in Budget 2016.
- An increased funding allocation for the TB Eradication Programme, to include increased consequential loss payments for farmers.
The taxation priorities for farming in Budget 2016 are:
- Introduction of a farm transfer incentive to maximise the productive capacity of the farm enterprise and to support two generations through the transfer.
- Introduction of an Earned Income Tax Credit for self-employed workers to restore equity in the income tax system.
- Retention of 90% Agricultural Relief for farm transfers and adjustment of CAT thresholds to reflect asset price changes.
- Extension of the Stamp Duty Young Trained Farmers exemption and Stock Relief measures past their current expiry dates of December 31, 2015.
- Extension of income averaging to forestry clear-felling income.
Macra na Feirme
Macra’s pre budget submission outlines many of the key taxation and resource issues of importance to young farmers including:
- Renewal of 100% Young Farmer Stamp Duty Relief.
- Retention of 90% Agricultural Relief.
- Renewal and increased flexibility in the 100% Young Farmer Stock Relief.
- Addressing income volatility and the creation of a young farmers fund.
- Access to credit through the European Investment Bank fund for young farmers.
- Resourcing the provision of Agricultural Education.
- Supporting rural youth and rural areas including the implementation of the CEDRA report.
- Reduction in the USC by 1% and end to different USC rates for self employed
- Increase in Capital Acquisitions Tax Category A threshold from €225,000 to €300,000 (Category A) and equivalent increases for Category B and C.
- Provision to put profits in a good year into “rainy day fund” exempted from income tax until drawn down subsequently in a bad year.
- Want full matching funding to facilitate RD programme spend of €580m to cover maximum participation in GLAS; Knowledge Transfer (discussion groups) including possibility of being in beef and sheep; BDGP etc
- Want to see sheep fencing back in TAMS and examination of a sheep scheme under pillar 2.
- Want acknowledgement that process of reversing Disadvantaged Area cuts (i.e.max area reduced to 30 ha should be gradually brought back up to 45ha) will begin in line with reversal of Public Sector pay cuts.
- Want to see more Gardaí deployed to tackle rural crime.
- A direct ‘cut-and-paste’ of the Australian’s Government’s Farm Management Deposit Scheme (FMDS) or some variant of it.
- An improvement on the USC on the gross incomes of farm families.
- Extension to farm families of the same tax relief for farm leases as that available to non-related families.
- Extension to the 2018 Stock Relief and the Stamp Duty Relief for Trained Young Farmers.
- ICMSA were assured the tax free thresholds for Capital Acquisitions Tax were going to be looked at in the context where the present figures of €250,000 is now widely accepted as hopelessly unrealistic.
- On Capital Gains Tax the need for a reintroduction of Indexation – withdrawn in 2008 – is now absolutely obvious and that the first €5000 of an individual’s chargeable gain (net of allowable losses) should be exempt.
- ICMSA proposes the introduction of a choice to write-off capital expenditure on plant, machinery and farm buildings over a period of between three and eight years to facilitate maximum utilisation.
- ICMSA proposes that the ‘floating allowance’ which was available as part of the enhanced capital allowance for pollution control should be reintroduced.
- On the question of safety we would like to see farmers being allowed to claim back the VAT on farm safety equipment clothing and also the introduction of the Scrappage Scheme on PTO shafts as recommended by the Seanad Public Consultation Committee Report on Farm Safety.