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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 Shane Ross: Information on Shane P.N. Ross Zoom on Shane P.N. Ross] It is creating an albatross around the necks of pensioners, who will have to carry it until the day they die. It will force people to sell their houses because they cannot raise the cash to pay this tax also.

This is not a progressive tax but a retrograde one. No one, whatever his or her ideological position, has been fooled by the so-called mansion tax introduced by the Government simply as a sop to the Labour Party to state it was doing something against those who were better off and had larger houses. This does not detract from the fact that the Government is also hitting those on social welfare and middle Ireland again. This is a cross middle Ireland is likely to resist. It will not accept the Government's argument that the IMF and the European Union are the responsible bodies for imposing this tax. It is a voluntary decision by the Government which it did not have to take. There are other sources which it could have taxed or cut.

Deputy Catherine Murphy: Information on Catherine Murphy Zoom on Catherine Murphy According to the Government, this tax is set to bring in €500 million. Let us suppose everyone pays it; it is reasonable for people to ask what they will get for it. What they get is a dysfunctional local government system. Local government fund spending has been reduced from €999 million at its peak in 2009 to €615 million in 2012, a reduction of €384 million or 38%. Local authority revenue streams such as commercial rates have contracted also. This tax will essentially fill the gap.

The historical development of local government shows a pattern of a strong, centralised authority reserving and guarding powers that would be better exercised at local level. During the years reforms have been piecemeal and timid. The Bill, far from being a departure to sustain local government, fits very well into the long line of measures from the Executive to extract funding from citizens without providing any semblance of a local service available in other countries. What is happening here is a smash and grab. The legislation will create monsters of the Revenue Commissioners by pitching them against a significant number of citizens to the point at which it will become an administrative nightmare for the Revenue Commissioners and potentially damage its ability to collect other taxes. It is easy to foresee the stampede of Revenue officials who will seek transfers or opt to leave. This is a very dangerous development.

The campaign of civil disobedience entered into by so many in respect of the household charge has filled the protest vacuum. When this measure is applied, people will see deductions from their wages or social welfare payments which, in turn, will take food off family tables. That will be the straw that will break the camel's back for those who are struggling to keep a roof over their heads.

The only part of the Bill that refers to what is local is the Title. This is a slush fund for the Minister for the Environment, Community and Local Government, who claimed that 65% of the revenue raised should be assigned to the relevant local authority. The other 35% will be distributed to other parts of the country in the same disgraceful and inequitable way the local government fund has been distributed. No developed country that is serious about proper local government goes about it this way. Abroad, local representatives vote on local taxation measures and the money stays in the locality. Here, we do it backwards.

There is a serious risk that section 143 is unconstitutional. I do not believe the family home can be invaded in the way envisaged in the section. I hope the Minister will withdraw its provisions next week.

Deputy Finian McGrath: Information on Finian McGrath Zoom on Finian McGrath I reject the Short Title of the Bill, Finance (Local Property Tax) Bill 2012, because this is, in fact, a home tax. In the current economic crisis this unjust tax is unacceptable for householders. As a result, I will be voting against this legislation. In the past, when he was just a Deputy, the Taoiseach said it was morally unjust and unfair to tax a person's home. Now he has done another U-turn.

The average householder is being hammered. Austerity is not working and it is bad for many young families in negative equity. During the week one constituent asked me why he had to pay a property tax when he was already paying other taxes. He outlined some of his other payments such as an annual refuse collection charge of €312, an estate management fee of €179, the television licence fee of €160 and a health insurance premium of €1,200, all of which come to €1,842 per year which is paid out of moneys already taxed. The Government will run the country into the ground unless it accepts the reality that one cannot tax or cut one's way out of recession, as has been proved across the world in different economies.

The Government is squandering taxpayers' money by pushing through excessive salaries for its advisers. However, families of people with disabilities have been hammered through the cut to the respite care grant, while poor families have suffered a cut of €10 to child benefit. Now the Government is bringing in a home tax.

Respond!, the housing association which provides 5,200 units of accommodation nationally, has slammed the legislation which will impose a local property tax on social housing organisations. It believes the tax will jeopardise the future of many of the housing charities across the country that provide accommodation for low-income and vulnerable families. It believes the move is short-sighted and could have long-term negative consequences for the future of social housing.

How dare the Government impose this tax on the people? People have already paid a property tax through stamp duty in the past 20 years. How dare anyone opposite claim this is connected to a wealth tax?

In recent weeks other measures to bring in extra revenue for the State have been proposed. Even some of the Government's backbenchers agree with some of the proposals made. I will be voting against this legislation and call on all Deputies to reject this unjust and unfair home tax.

Deputy Maureen O'Sullivan: Information on Maureen O'Sullivan Zoom on Maureen O'Sullivan Ireland is one of the few countries in the western world which does not have a property tax. There are examples of international best practice of fair ways of assessing and collecting property tax, how best to use it to provide essential local services and how to allow for exemptions and waivers. While everyone was delighted when the old local authority rates were abolished, there is no doubt that it was a regressive step. Abolishing rates was an election promise which was shackled to party-political whims for decades regarding local services. There is no doubt that this contributed to the speculators' property boom and planning corruption which has led us into austerity.

The problem with the property tax is that it is being introduced at the worst time in our history, during a recession when there are so many burdens on struggling families. Many reputable organisations made alternative suggestions to this tax, including the Commission on Taxation's proposal for a site value tax. Market value is problematic owing to mortgage costs being higher than the value of a home. A site value tax could have been considered to provide for more efficient use of land as well as to raise revenue. It might also have played a role in ensuring we did not have another property boom followed by a bust.


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