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Finance (Local Property Tax) Bill 2012: Committee Stage (Continued)

Tuesday, 18 December 2012

Dáil Éireann Debate
Vol. 787 No. 3

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(Speaker Continuing)

[Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett] It was understood what that meant. It meant that there were some people who had lots of wealth and property and there were some who had little or none.

This is not a tax being imposed on those who have huge accumulations of wealth and property. This is a tax being imposed on every ordinary citizen in this country regardless of their ability to pay. It is a tax simply on the roof over their head, which is effectively a tax on the right to live in a civilised way. It is an obnoxious attack on ordinary citizens, utterly disregarding their capacity to pay it, to survive, to pay their bills, to educate their children and to manage in this extraordinarily difficult situation in which so many find themselves.

Earlier today in the Dáil the Taoiseach effectively admitted this. When Deputy Higgins asked him, given that four years ago he railed against any attempt to put a tax on the family home, why he is now imposing just such a tax, he said that things had changed and that we are in an extraordinarily difficult situation. He was referring, of course, to the financial collapse caused by developers, bankers, speculators, bondholders and all the rest of it. In other words he was acknowledging precisely the point we were making in referring to it as a bondholders' tax and that is what it is. There was no morality or progressiveness to it - it was simply an austerity tax being imposed in order to satisfy the troika and ensure the protection of the bankers and bondholders and to make ordinary people pay for that fact. It clearly confirms what we and everybody else in the country knows and believes to be the case. That the Government persists in trying to pretend it is progressive or a property tax in any sense that ordinary people would understand is pure dishonesty and spin on its part.

Another piece of evidence of how dishonest the attempt to call it a property tax is illustrated by what is happening in the local authorities. I presume what happened in Dún Laoghaire-Rathdown County Council this week is being replicated everywhere else. The Dún Laoghaire-Rathdown county manager was asked why the budget going through the council this week makes no mention of the property tax even though Dún Laoghaire-Rathdown County Council will be required to pay €7 million to the central government to meet its obligations under this property tax. The county manager was asked where he would get the money if he is sent such a bill by the Revenue Commissioners and he said it would go onto the rents of council tenants. So people who have no property will have this imposed on them by the local authority, which clearly indicates this is just a tax on ordinary people. It is not a property tax and the bill will be paid by local authority tenants.

Similar points have been made about people in negative equity. This is taxing the ball and chain around people's legs. This is like attaching a ball and chain to somebody, throwing them into the river, asking them why they cannot swim and threatening menaces and punishments because they cannot swim. It is outrageous. The homes of people, whose mortgages are like an albatross around their necks, some of which are damaged by pyrite or have major structural problems such as in Priory Hall cannot in any meaningful sense be described as property - as a form of wealth - on which it is legitimate to levy a tax.

The real giveaway which totally exposes the lies being used to justify the Bill is that it is being collected by the Revenue Commissioners, the people who collect income tax, and not by the local authorities. It will not increase in any way the provision of services or the funds available to local government. In fact, as I have just explained, local government will have to give money back to central government, having less money for services and punishing their tenants. That it is being collected by the Revenue Commissioners exposes the implication that somehow ordinary people have a different pot of money. The Minister is guilty of using the sort of mythology we tell children when they ask where we will get the money and they are told that it is on the money tree in the back garden. Does the Minister believe that hundreds of thousands of citizens, who are unemployed or have had their incomes savaged and are in mortgage distress, have money trees growing in the back garden and that they will be able to go and pick the money from the tree on their property in order to pay this tax? It is ludicrous.

Why does the Minister not tell the truth at least in the title of this tax and call it what it is? It is a tax to satisfy the greed of the bankers and bondholders being imposed on the roofs over the heads of ordinary citizens of this country regardless of whether they own that roof, regardless of their ability to pay it and regardless of their ability to keep food on the table for their children. It is shameful.

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt I call Deputy Michael McGrath. I point out there are a good number of speakers.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath I understand and I thank the Leas-Cheann Comhairle for giving me the opportunity to speak to section 1. Sometimes I despair about how we conduct our business in the House.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan Me too.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath I do not believe there is an organisation anywhere in the country that would make a decision of any importance in the way we are making this decision. This is an historic Bill and probably one of the most important Bills this Dáil will discuss. It has 159 sections and there are 88 Committee Stage amendments. Here we are with less than three hours left before the Bill will be rammed through the House.

Deputy Michael Noonan: Information on Michael Noonan Zoom on Michael Noonan The first half hour has been wasted by the Opposition on total bombast.

Deputy Joe Higgins: Information on Joe Higgins Zoom on Joe Higgins No it is not; it is telling the truth.

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett The truth the Minister does not want to hear.

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt Deputy Michael McGrath has the floor.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath The Minister will not hear any bombast form me. I will make a few points and I want us to get down to the detail of the Bill. I remind the Minister as other Deputies have done that he does not have any mandate to introduce this property tax Bill because he said he would not do it. In the general election campaign he and his party campaigned on the basis that it would not introduce any annual recurring tax on the family home. His party claimed it would be unfair and it was considering alternatives such as increasing user charges for waste. The central idea it had was a local site sale profits tax. It claimed that both of those would be fairer and more economically sensible than an annual recurring property tax. That is the basis on which Fine Gael contested the election and got the votes. The Labour Party advocated a site-value tax but suggested that people in negative equity should be taken into account as should people who paid stamp duty. It also argued that certain categories would need to be exempt. So there is no mandate for the introduction of this property tax by the Government.

At the heart of it, the flaw is that the Government is not taking into account in any way the ability to pay. It is not taking into account the respective value of the mortgage attached to the property. The Minister concluded his Second Stage speech by saying: "This tax is also structured to adhere to the Government's other key objective to be fair and progressive - the wealthiest will pay the most". That is absolutely untrue. This is not a tax on wealth because if it was the Government would allow people to net off against the value of the property the respective value of the mortgage. That would be a start in this debate. Let us not dress up this Bill as something it is not - it is not a tax on wealth and it takes no account of ability to pay. As I said to the Taoiseach in this House earlier, a family with two, four or six children with a gross weekly income of anything more than €480 per week will not be able to defer this tax in full, which is ridiculous. The Government is giving people in mortgage arrears the choice of paying a property tax or trying to service their mortgage in some way. This is in no way a fair tax.

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