Budget 2017 is set to deliver a package of measures which should ease some of the many problems farmers are facing. As the Dáil resumed on Tuesday, there was widespread acknowledgement of the stress on farms, primarily due to recent weather, not helped by poor prices in most sectors.
Budget 2017 is set to deliver a package of measures which should ease some of the many problems farmers are facing.
As the Dáil resumed on Tuesday, there was widespread acknowledgement of the stress on farms, primarily due to recent weather, not helped by poor prices in most sectors.
Fianna Fail’s support for the budget is essential, and they are backing the measures floated for farming.
Cashflow is a real problem on farms, with looming tax bills set to eat up much of the advance BPS payment due in a fortnight. In that regard, IFA’s taxation proposal makes a lot of sense. It wants income averaging to be revamped to combat volatility.
The suggestion is that farmers could, in a disastrous year, take a holiday from income averaging, only applying the liability on the income for the current year. The balance would be carried into future years – it is deferral and not avoidance.
Averaging
This takes away the big problem with averaging – a whopping tax bill in a low-income year. IFA also proposes extending averaging to farm families with a PAYE income.
It is estimated that €580m is required this year for the Rural Development Pogramme, as schemes crank up into the spending phase.
“These expenditure measures are primarily keeping the commitments made in the RDP in 2014,” according to Martin Stapleton, IFA’s farm business chair. “If Government steps up to the plate and honour these commitments in the Budget, it will put money back in farmers’ pockets.
“It’s about reinforcing the commitment to GLAS and to TAMS. The BDGP can get to the stage where we are providing €200/cow, and the new sheep scheme will put €20m into the sector next year.”
Listen to an interview with Martin Stapleton in our podcast below:
Another boost will come from an increase in the tax credit for self-employed people. Introduced last year as a parallel measure to the PAYE allowance, it is due to double this year, from €550 to €1,100. This is the second phase in a three-year plan that will deliver a €1,650 allowance, matching the PAYE allowance. The IFA wants the full €1,650 to be delivered this year.
Farm Assist
The Farm Assist and Rural Social Schemes are likely to be improved. Social Protection Minister Leo Varadkar has indicated he will at least partially redress the cuts imposed in 2014. This will be a welcome boost to the most economically vulnerable farm families.
ANC boost
However, the similar restitution of funding to the Disadvantaged Area (ANC) scheme is probably on hold for another 12 months. While it is planned in the programme for Government, it is not due until Budget 2017, and the feeling among Government TDs is that it won’t be possible to bring that forward.
Some form of concession on the Fair Deal Scheme is likely. Currently, farm assets are liable to nursing home charges under the scheme, with a five-year clawback on land transferred. This has caused a lot of hardship. The IFA and others want the scheme to reflect the earning potential rather than the asset value of the farm.
The expectation is a partial exemption of land assets in means testing.
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