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

Friday, 14 December 2012

Dáil Éireann Debate
Vol. 786 No. 4

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(Speaker Continuing)

[Deputy Barry Cowen: Information on Barry Cowen Zoom on Barry Cowen] It will sap their financial capacity, increase difficulties in respect of rents and limit their capacity to maintain existing stock - not to mention build new houses - into the future. It is a direct contradiction of expressed Government policy to cripple these voluntary housing associations with a tax that will undermine their ability to pursue the goals the Government has set them. In the months and years ahead these flaws will become all too apparent as the contradiction between the Government's housing policy and its property tax comes to the fore.

I have referred to the harsh impact of the tax on ordinary families, those who are struggling with mortgage arrears, people living in social housing and the organisations which help ensure there is adequate provision of housing for those of all needs and means throughout Ireland. There is another group that will be hit by the tax, namely, the elderly. These are the people who spent their working lives building and keeping their family homes. When they started out, they aspired to having a small corner of the world they could call their own, somewhere to settle down and start a family. Through good times and bad, they strove to get the money together to buy homes and toiled away to keep them. They took pride in rearing their children in warm and welcoming homes they worked hard to maintain. Now their working lives are at an end and they are looking forward to the rest and joy of a well deserved retirement. Their children have mostly left the nest to go and start homes of their own which reflect those their parents worked so hard to provide. The incomes of those to whom I refer are fixed and those on private pensions have suffered from the impact of the economic downturn. The property tax is going to have a direct impact on these elderly pensioners who will be punished in the autumn of their years for working hard in order that they might have family homes. The pride they took and the sacrifices they made are now being used against them. They will find themselves punished for the location and size of the homes for which they worked in a different time. The Minister's statement to the effect that they can defer the tax until they pass away means that it is nothing more than a "death" tax for them.

As Deputy Michael McGrath stated, despite the limited time allocated for this debate, we have always believed there is an obligation on the Opposition to put forward meaningful alternatives and offer viable suggestions. Opposition alone is not enough and we are giving the Government the opportunity to at least amend the worst aspects of the Bill. Fianna Fáil is tabling a series of amendments that would alleviate pressure on social housing, those in negative equity or mortgage arrears and families whose homes have been affected by pyrite. We hope this would go some way towards alleviating the impact of the property tax which is the wrong tax at the wrong time.

In recent days some savage measures against the vulnerable have been introduced. In this regard, I refer, in particular, to the budget which is marked by its gross unfairness and mean spiritedness. The property tax is another addition to the ever growing list of broken promises and harmful measures. It is one for which the people of Ireland will pay dearly. We are opposed to the Bill because it imposes the wrong tax at the wrong time. Our amendments offer the opportunity to try to take the worst out of it. However, the question arises as to whether Fine Gael and Labour Party Deputies will do at least this much to blunt the blade of this severe tax before it is plunged into the heart of families.

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt I call Deputy Pearse Doherty who is sharing time with Deputy Brian Stanley.

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty Yesterday two truly shocking documents landed on my desk. They also landed on the desk of every other Deputy in this House and those of Senators. The first of these documents includes the Central Bank's residential mortgage arrears and repossessions statistics for the third quarter of 2012, while the second is the Society of St. Vincent de Paul’s response to budget 2013. Anybody who is considering supporting the Government's family home tax should read these two very short reports. When they have read them, they should ask how the Government expects families that are already struggling to get by and pay their bills will be able to pay the so-called property tax next year and in subsequent years.

The figures contained in the Central Bank report to which I refer reveal that one in every four mortgage holders is in distress. When one adds those who are in arrears and whose payments have been restructured, one discovers that some 179,370 homeowners were unable to pay their mortgages at the end of September. That is a massive number and it continues to rise. Between July and September, 115 new families fell into mortgage distress each day. As a result of this, the current position is that 23.5% of all residential mortgages are in distress. If the Bill is passed, these are the individuals the Government will expect to pay the family home tax. One out of every four people with mortgages cannot meet his or her repayments and the Government expects him or her to pay a new tax on his or her home. That does not make sense.

The Society of St. Vincent de Paul report states "Budget 2013 once again placed the heaviest burden onto the shoulders of people who are struggling" and that "those who have already borne the brunt of cutbacks are unable to take any more". It details four case studies of how the budget will impact on the household incomes of four typical families. It shows how cuts to child benefit and the back to school clothing and footwear allowance, the increases in prescription charges, carbon tax and motor tax and the introduction of the family home tax will leave many of the State's poorest families worse off by up to €1,000. These are the people the Government expects to pay the family home tax if the House allows this measure to be enacted.

When one reads the reports of the Central Bank report and the Society of St. Vincent de Paul consecutively, one can only reach a single conclusion - that, thanks to the measures introduced by Fine Gael and the Labour Party in the budget, 2013 will be the worst year of the mortgage crisis to date. Next year is the one in which the Government wants to introduce a family home tax. Are those in government mad? Have they lost their senses? Do they not understand what the reports to which I refer are telling them? One in four of the people about whom I have been speaking cannot pay his or her mortgage. This means that there is a risk that they could lose their homes. Instead of developing solutions, the Government is now asking them to pay tax on their homes at a time when they cannot meet the mortgage repayments on those homes. That does not make sense. The Government is failing to understand the extent to which ordinary people will be unable to pay these new charges.

As Deputy Michael McGrath stated, when Fine Gael and the Labour Party were in opposition, their views on this matter were very different. In 1994 the Taoiseach opposed the introduction of a property tax and stated, "It is morally wrong, unjust and unfair to tax a person's home." I agree. During the most recent general election campaign the Tánaiste, Deputy Eamon Gilmore, promised not to introduce a property tax on residential homes and stated, "We have to remember that many people have already paid a property tax on their residential home." In this regard, he was obviously referring to stamp duty. Many paid over tens of thousands of euro in the form of stamp duty, but the Government does not care about this. It wants to hit them again, even though they have already made their contribution. During last weekend's edition of "The Week in Politics" we received an insight into Government thinking when the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, commenting on broken promises, stated, "Isn't that what you tend to do during an election?" It is clear that neither Fine Gael nor the Labour Party ever had any intention of living up to the words they had uttered during the election campaign. There is only one thing I can say about this matter - those in the parties to which I refer are absolute hypocrites and were completely cynical about what they said in order to get into office.

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