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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 Peter Mathews: Information on Peter Mathews Zoom on Peter Mathews]   I commend Deputy Mitchell's contribution in which she pointed out the unfairness in terms of Dublin vis-à-vis Donegal with regard to what it costs to run local authority services per capita and how they can be funded. This taxation proposal is not fair in that regard.

  There are three pairs of shoulders that could bear this load. First, a three-year national recovery levy of 4% could be placed on those on high incomes - that is, salaries of more than €120,000 - across the board; second, a 2.5% levy could be placed on multinational corporations or indigenous corporates, which would raise another €600 million at a minimum. If one adds up the revenue that would be derived from those two levies, it would amount to €1 billion. Third, a 5% betting tax could be placed on turnovers of €5 billion, which would produce further revenue. Those are three simple ways this revenue could be raised - three pools of reserves that could shoulder the burden of the sudden change that is needed for the next three years.

Deputy Clare Daly: Information on Clare Daly Zoom on Clare Daly I would like to share my time with Deputies Boyd Barrett, Wallace, Donnelly and Higgins.

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt That is agreed.

Deputy Clare Daly: Information on Clare Daly Zoom on Clare Daly As a committed socialist, I can assure the Minister that, contrary to his earlier assertion that this tax on the family home is a tax on capital assets or some form of Marxist ideology, it certainly is not. The idea that a home for which people have spent a lifetime paying or to which, in other instances, they are shackled for another 20 or 30 years is some form of asset to be sweated is a total outrage which has struck fear into the hearts of residents the length and breadth of this country. It is not good enough for backbenchers to wax lyrical and voice their concerns in a weak-kneed manner. The Government needs to get real. For many people in our State, homes are a liability that they would get rid of if they could, but they would not realise even a fraction of what they paid for them. The idea that council tenants and tenants of voluntary housing bodies will have an extra debt burden foisted on them is abhorrent. The idea that the solution to the problems facing those in mortgage arrears, who cannot make ends meet, is to foist another debt on them is outrageous. To add to that, the sop given by the Minister - that the situation of those who have houses afflicted with pyrite, whose homes are valueless, will be examined in the finance Act - is not good enough. What sort of tax relief will they be given and who will determine the granting of such relief? Who will determine the certifiable level of pyritic heave? Who will pay for the testing and so on? Apart from all those people who are in dire economic straits, to add insult to injury, it is considered that people who are poor can have the privilege of paying extra. The Government deigns that the poor can pay more and that their families can pay more when they are dead. This is one of the most draconian Bills that has ever been put before the House.

People often talk, sometimes in exaggeration, about taking food out of the mouths of families or children, but that is literally what this legislation proposes. What the Minister is proposing, unlike any of his predecessors, is to forcibly put his paw into the pockets and into wage packets of workers and take from them moneys that they would otherwise spend on electricity, food and so on. The idea that he can do this without provoking a reaction is an absolute fallacy. He has clearly chosen to wage war and he will be met with outright resistance. In my opinion, this property tax, which is a home tax, will be the match thrown into the dynamite factory of Irish society. The Minister let the cat out of the bag and exposed the backdrop to this - that the reason he is doing this is not to improve our situation but to pay for the private debts of bankers and bondholders and the deficit in this State. The idea that taking money from people will only, as he said, have a small adverse effect on economic performance is rubbish. Next year he proposes not to take half a year's property tax from people but to take a year and half's property tax.

The Minister asked what our alternative is. I will give it to him in 20 seconds. Our alternative is that if he were even to enforce the existing rate of corporation tax - he would not have to increase it - he would get €4 billion in revenue, which is the equivalent of eight years of home tax revenue. People realise this is nothing more than daylight robbery and they will strenuously resist this measure.

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett I believe Deputy Mitchell said that this measure might provoke a revolution and I certainly hope it does. Even short of a revolution, it may well be the rock on which this Government perishes and I hope it is for the sake of the country and our economy. If the Minister proceeds with this measure, there is no question but that he will be driving hundreds of thousands of families into poverty and despair and he will devastate the already devastated domestic economy.

When we say that people cannot pay this tax, that is clearly apparent; the facts speak for themselves. Some 1.3 million people have less than €50 a month after they pay their bills, 40% of population have to borrow to pay their bills as matters stand and 22% of households are jobless. These figures are worse than those in Greece and Spain, for all the Minister's claims that we are in a better place than them. Some 160,000 people are in mortgage distress or have had their mortgages restructured. Those people, many of whom face an overlap of difficulties, are hit by all the different aspects of this crisis and they cannot afford to pay this tax.

If one's house in Dublin is worth €200,000, one will have to pay property tax of €405 per year or €33 per month. If one has two children, that tax liability will be on top of the loss of €20 in child benefit and, if one is working, the loss of €20 a month due to the removal of the PRSI exemption. That will push tens of thousands of people over the limit. They simply cannot afford to pay this tax. The imposition of the tax is a guaranteed, sure-fire recipe for plunging hundreds of thousands of low- and middle-income families into poverty. They will have no choice but to revolt and, believe you me, they will revolt. If the Minister thought he saw a major popular explosion against the household charge, wait until he sees the revolt that will occur as a result of this.

I appeal to the Labour Party and to the Fine Gael Deputies who have rightly spoken out against this measure and appealed to the Government, even though its members have not listened, to examine fair alternatives that would involve taxing the profits of corporations or those who have the money to pay, to break ranks with the Government, because it is sending the country down the Swanee. I appeal to them to stand with the people who elected them, to stand with this country and with the ordinary citizens and to break with this Government which will destroy the economy and devastate the lives of hundreds of thousands of families.

Deputy Mick Wallace: Information on Mick Wallace Zoom on Mick Wallace The property tax, at this difficult time, lacks fairness and good economic sense. The decision to give special new powers to the Revenue Commissioners to take money from people even when they may be struggling to put bread on the table is draconian in the extreme. This property tax, on top of all the existing challenges that many people face, will contribute to driving our domestic economy further into the ground, driving more of our young people out of the country and driving more people into poverty.

The political philosophy that drives this form of government thinking is not new; it is called neoliberalism. The world-renowned political writer Noam Chomsky describes it as the defining political economic model of our time. The term refers to policies and processes under which a relative handful of private interests are permitted to control as much as possible of social life in order to maximise their personal profit. Neoliberalism can rationalise anything from lowering taxes on the wealthy and scrapping environmental regulations to dismantling public education and social welfare programmes. Any activity that might interfere with corporate domination of society is automatically suspect because it would interfere with the workings of the free market, which is advanced as the only rational, fair and democratic allocator of goods and services. At their most eloquent, proponents of neoliberalism sound as though they are doing poor people, the environment and everybody else a tremendous service as they enact policies on behalf of the wealthy few. The economic consequences of these policies have been the same just about everywhere and exactly what one would expect - a massive increase in social and economic inequality, a marked increase in severe deprivation for the poorest nations and peoples of the world, a disastrous global environment, an unstable global economy and an unprecedented bonanza for the wealthy.

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