Budget will have negative impact on co-op industry
ICOS, the umbrella body for co-operatives in Ireland, said business in general will have to fund the exchequer deficit through increased capital allowances, the increases on the VAT rates and other measures.
President Dessie Boylan said the abolition of rollover relief is worrying for co-operative business, and it will have to review Finance Minister Charlie McCreevy’s speech before making further comment.
Mr Boylan said the lack of a fiscal initiative in tackling spiralling insurance problems that had been consistently highlighted by ICOS and other business organisations in recent months was also disappointing.
It was also a matter of deep regret that the minister had not reduced the employers PRSI burden. As part of the pre-Budget submission, ICOS had called upon the minister to reduce this to more sustainable levels.
Meanwhile, the prospect of the farm lobby pulling out of talks with the Government on the formation of a new national partnership agreement has increased.
Farm bodies have already put their participation in bilateral talks with officials on hold pending a clarification meeting with Taoiseach Bertie Ahern.
But tax changes in the Budget, combined with sweeping cuts of €117 million in the agriculture estimates and a doubling of disease eradication levies on farmers to raise an additional €10 million, has raised new fears about their participation in further negotiations.
IFA president John Dillon said he would also be seeking immediate clarification from the Department of Finance on the implications of capital gains tax changes for land being acquired under an IFA agreement on national roads.
Unless there was an early response on IFA land leasing proposals and reassurance that vital farm schemes will be maintained in 2003, it could only conclude farmers were being written out of the national partnership negotiations by the Government.
ICMSA president Pat O’Rourke said the Budget provides major obstacles to continuing to negotiate on a new national agreement. The Budget and Book of Estimates had added extra costs and taxation on farmers.
Furthermore, the further increase in the PAYE allowances means that a farm family with both spouses contributing to the running of the farm could end up paying €1,600 more than a PAYE family with the same income.
Macra na Feirme president Seamus Phelan welcomed an extension of the young trained farmer relief for a further three years at an estimated cost of €12 million in 2003 and €13 million in a full year.
But he criticised Minister McCreevy’s decision not to renew the 100% stock relief measures for young trained farmers. The removal of the relief was a major setback for forward thinking young farmers who were trying to grow their business.
