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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 Robert Troy: Information on Robert Troy Zoom on Robert Troy] One in four family home mortgages is either in arrears or has been restructured. The simple reality is that 180,000 mortgage holders are experiencing difficulties in repaying their mortgages. How can the Minister expect them to pay a household tax when they cannot pay their mortgages? This comes on top of the Government's failure to support people facing mortgage difficulties. It has permitted the State-owned banks to increase mortgage interest rates and has given them a veto on the Personal Insolvency Bill. It has changed the qualifying criteria for people who apply for mortgage interest relief to make it much more difficult for those who are most in need of support. Now it is arguing that it is fair to tax their family homes because it is done in other countries. It is like giving a glass of water to a drowning person.

I have more to say about those who paid stamp duty or are in negative equity. This is a regressive tax. Take two houses in Mullingar valued at €150,000. In one house a family earns €20,000 per annum while the family in other house comprises a working couple who earn €70,000 or €80,000. Both families will pay the same household tax and both will take the same hit to child benefit payments, fuel surtaxes and PRSI charges. This tax takes no account of people's ability to pay it.

The budget was regressive, just like the last one. Is the Government that out of touch with the people it purports to represent? We proposed a fairer route to recovery which involves taxing those who earn more than €100,000 because they have broader shoulders, but the Government does not care about that. It wants to treat everyone the same, whether rich or poor. It is disgraceful that I will not even get ten minutes to speak on this Bill because of the guillotine. The Government does not want to hear the hard truths about how many people are suffering. How many members of the Cabinet know what it is like to live in a negative equity house? How many know what it is like to be unable to put food on the table? How many know what it is like for old people to turn the heat off in their homes at night because they cannot afford oil? I suspect that not one member knows or cares. What they are doing is utterly disgraceful.

Deputy Charlie McConalogue: Information on Charlie McConalogue Zoom on Charlie McConalogue How much time have I left?

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett I am supposed to call the Minister at 5.45 p.m.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan I hope Deputy McConalogue will make a better contribution than the previous speaker.

Deputy Charlie McConalogue: Information on Charlie McConalogue Zoom on Charlie McConalogue I hope the Minister was listening to the previous speaker because, unfortunately, the Minister has not been listening to the points raised by others. This is yet another regressive tax in a regressive budget. It will hit families on small and medium incomes in the same way it will impact on those on higher incomes. Other regressive measures in this budget include the removal of the PRSI exemption on lower incomes and changes to the car tax regime. These measures will impact on all families and, unfortunately, they are being introduced in a way that rolls back on the promises made by Fine Gael and the Labour Party. I join my colleagues in objecting to the way in which business was ordered for the House this week. I do not doubt the Government guillotined this Bill and the Social Welfare Bill because it does not want to allow the Opposition to challenge it on its failure to stick to the promises it made 18 months ago. Its efforts to stifle debate show it does not want the public to be reminded of the approach it is taking.

Deputy Troy noted that one in ten mortgages is more than 90 days in arrears. Those people, who cannot afford their mortgages, will be forced to pay the property tax. However, those who have not yet purchased a house are to be given an exemption from the tax for several years, even though they will be purchasing at the bottom of the market.

I ask the Minister to address an issue with the penalty system for the second home tax whereby some people who were not aware of the tax for genuine reasons which were not their own fault are now facing arrears of several thousand euro. Local authorities are taking a non-negotiable position on the payment of these arrears. I understand the Minister intends to keep the second home tax for another year. I ask him to consider the arrears issue and, at a minimum, draw a line underneath the accrual of arrears by the small number of people who are only now finding out about the tax.

Overall, I am disappointed to see the cavalier attitude with which Fine Gael and the Labour Party have treated their mandate and the promises they made to the public when they entered government only 18 months ago. I object to the Bill and to the property tax.

Minister for the Environment, Community and Local Government (Deputy Phil Hogan): Information on Phil Hogan Zoom on Phil Hogan In preparing for my contribution on this debate, I reflected on the passage of the legislation which gave effect to the household charge one year ago. Dire predictions were made at that time by certain Deputies, some of whom augured or even advocated mass civil disobedience. Nobody in any government of which I am aware would desire to introduce a new tax, but it has to be done if we are to comply with the memorandum of understanding which was negotiated by our predecessors.

Deputy Michael McGrath: Information on Michael McGrath Zoom on Michael McGrath That is not what the Minister for Finance says.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan The need for it arose due to the economic and fiscal difficulties which we inherited. People were coming in the door from the troika and the Members of the then Government did not even know they were on their way. This is the serious matter we have inherited.

Deputy Charlie McConalogue: Information on Charlie McConalogue Zoom on Charlie McConalogue Why did Fine Gael promise not to introduce a property tax?

An Ceann Comhairle: Information on Seán Barrett Zoom on Seán Barrett Please allow the Minister to reply. I do not want to keep interrupting.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan I recognise that certain Fianna Fáil Deputies are suffering confusion about the matter. They negotiated this tax with the troika but now they are in Opposition, they are against it.

Deputy Charlie McConalogue: Information on Charlie McConalogue Zoom on Charlie McConalogue Fine Gael promised in its election manifesto that it would not introduce a property tax.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan We still have a bit to go on the new Fianna Fáil. Despite grave warnings about doomsday scenarios by people who regard themselves as socialists, I am pleased to report the household charge has been a success.

Deputy Robert Troy: Information on Robert Troy Zoom on Robert Troy The Minister is operating under an illusion.

Deputy Barry Cowen: Information on Barry Cowen Zoom on Barry Cowen In his rush to Brussels, he will say anything.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan Deputy Cowen should know better than anyone how this was negotiated. The household tax has raised almost €113 million and 70% of liable owners have registered to pay it. That is a big difference from the 30% Deputy Healy predicted last year. I take this opportunity to thank the silent majority of the people who understand the difficulties we face and are prepared to contribute to local services.

Deputy Clare Daly: Information on Clare Daly Zoom on Clare Daly They will not thank the Minister.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan Despite the efforts and rhetoric of Deputy Higgins and others, the majority have complied with this law. They are legally compliant because they want to be responsible citizens in helping us to overcome our economic and financial difficulties.


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