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Finance (Local Property Tax Repeal) Bill 2013 [Private Members]: Second Stage (Resumed) (Continued)

Wednesday, 12 June 2013

Dáil Éireann Debate
Vol. 806 No. 2

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(Speaker Continuing)

[Deputy Dara Murphy: Information on Dara Murphy Zoom on Dara Murphy] I can tell the Minister of State at the Department of Finance, with regard to the measures already introduced, including the reduction in VAT, that there is a clear benefit in encouraging spending and domestic demand for the future, and hopefully for the near future, by continuing to reduce the tax on spending and, more importantly, by lowering the cost of work through reductions in income tax. However, in a time of crisis, income tax, VAT and excise can be changed up or down as an economy or people require. A property tax is a far more difficult thing to put in place. Notwithstanding the excellent compliance of people in this country, given that 90% have signed up, and while people want to pay as little tax as possible, there is an understanding that the reduction should come through taxes on work and spending.

I congratulate the people of our country on their intelligence and patriotism in seeing that this tax is an effort to recover our economic sovereignty in the short term and, in the long term, to establish a fair and broad tax base that is fit for purpose and that can adapt to the way an economy can fluctuate at any time. I reject the Bill and I question whether the so-called socialists have really looked at the ideological position.

Deputy Tony McLoughlin: Information on Tony McLoughlin Zoom on Tony McLoughlin Like many Deputies, I am amazed but not surprised that Sinn Féin has put a Bill to repeal the property tax before the House. It has been said on a number of occasions that Sinn Féin, in introducing this Bill, is speaking out of both sides of its mouth. Sinn Féin supported a property tax in Northern Ireland but vehemently opposes it in the South where, thankfully, the party is not in government.

The constant Sinn Féin rebuttal to this argument is that the property tax paid in Northern Ireland pays for school transport, refuse collection and some other school services, unlike here where none of these services is covered. That is true, and it is the message Sinn Féin is anxious to convey. However, the cost differential is enormous. In my constituency of Sligo-Leitrim, the average tax band is band 2, which is €224 in a full year. In County Fermanagh, the cost set out by the local council is £790, which is equivalent to €916. For the collection of refuse and the transportation of their children to school the good people of Fermanagh pay almost £700. The reality is that the property tax here is far less than the property tax in Northern Ireland which is defended by Sinn Féin.

The Taoiseach has constantly stated that this Government will not increase personal taxation or, as it is quite correctly described, tax on work. Clearly, this is the alternative. I oppose scrapping this tax, as is suggested. Clearly, we cannot return to the system of the 1980s, when I and many other people paid up to 65 pence in the pound in personal taxation. This country continues to run a current budget deficit of over €1 billion per month. The receipts from the LPT will ensure that the Government has a tax income that corresponds to our property prices, which may rise in prosperous times and remain low during difficult times for our people. This tax presents an opportunity for us to ensure that all users of our services, libraries and public amenities pay something, rather than almost always depending on the PAYE or self-employed sector.

Deputy Paul J. Connaughton: Information on Paul Connaughton Zoom on Paul Connaughton I am grateful for the opportunity to speak on this Bill. I agree with much of what Deputy Dara Murphy said in his contribution. When one considers the level of the deficit we faced when we came into Government, there were no easy choices. This certainly is not a popular tax, as has been stated. There is no point in saying otherwise. However, the decision was either to take this option or to increase income tax. As a commitment was given not to increase income tax, this is the option that had to be taken.

A number of people have approached me about the property tax over the last number of months. Instead of looking at what happened in the past, they are looking at what will happen in the future. People tell me that if they are going to pay a property tax that will go to their local authority, they want to see how it will be spent. Accountability in that regard will be very important. At present, local authorities simply cannot provide all the services they are required to provide. We must devise a transparent taxation system whereby we can point out to people where their taxes are being spent. The Government was correct to stay away from increasing income tax in so far as it could.

There is one matter among the concerns people have raised with me which we could examine in the next budget and, perhaps, tweak the system and make it fairer. I have been contacted by a number of people in estates in County Galway who are paying management fees. There is concern about that. Management companies have different levels of fee and some provide different services to the people who pay them. This is causing a great deal of anger, confusion and upset. People in those estates say they are getting as much as they can from the local authority. Perhaps we could work out a deal with them and their management companies to make it fair for them as well, because many of those people feel left out in this regard at present.

Deputy Michelle Mulherin: Information on Michelle Mulherin Zoom on Michelle Mulherin I do not wish to rehash the reasons we are in a situation that requires a property tax. Who wants to have a property tax? Who wants to impose rates on people and so forth? We should park those arguments. We had them not so long ago and we spent a long time talking about it. Tonight, we are spending more time on it.

Are we being asked to suspend reality here? The Chair has asked us to speak on the Bill, but the Bill is two pages in length. It states that we will cancel what has happened previously, because that is the populist thing to do, but what happens then? We have gone through the Bill. There is nothing constructive in it. I do not believe this is constructive opposition or that it contains anything to address the issues facing people. In fact, the more than 80% of people who have paid their property tax to date see that this Bill is a load of whitewash. It is catering only to a certain element of people - not all people - who do not want to pay for anything and do not think that anybody should have to pay for anything. However, that is not how things work.

What is being created in this Bill is something fantastical, as if we will suddenly change our minds. It is absolutely ridiculous. It is in the same vein as a previous Private Members' motion from Sinn Féin which sought to create a stimulus package that would spend the pension reserve once again and which contained another proposal to approach the European Investment Bank. The same party said we should not have paid the promissory notes. It has no credibility whatsoever. It is what I call the republic of fantasyland. That is all Sinn Féin proposes when economics are involved. I urge people not to go near it unless the party can come up with something a little more constructive.

In that context, there are many compliant people who do not like the tax but who understand the requirement for balancing books and understand that the tax must be levied in that spirit. The people who have paid their tax are apprehensive about one thing and that is the value of their property. They are apprehensive because they do not know if they are competent to value it. Who can value property at present, given the way things are? My request is that people who have valued their property and complied with the notice of estimate provided to them in their region will be afforded the comfort of knowing that they will not be audited or investigated by the Revenue Commissioners for the next three years until property prices recover and the country gets into a better position.

Deputy Paudie Coffey: Information on Paudie Coffey Zoom on Paudie Coffey I am glad to have the opportunity to contribute to this debate. Regardless of whether we like it, the property tax is needed to maintain essential local services in our communities. This Bill is an opportunistic, populist move by the Opposition. The same Opposition regularly calls for improved services in every local authority in the country and insists on more funding for communities in those same local authority areas, with no regard for where the money will come from or how it is raised. This is not the political leadership or responsibility that is required in this country at present. It is just scaremongering, peddling misinformation and encouraging people not to pay taxes that are passed by the democratic institutions of this State.

Fianna Fáil, the party that ran our economy onto the rocks, signed up for a property tax as part of the bailout terms it agreed with the troika. Now it is doing a U-turn for populist reasons. It is vote-gathering in a disingenuous way. Sinn Féin opposed the household charge and now opposes the property tax but in its so-called alternative budgets it did not make provision for the resulting shortfall of over €160 million.

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín We did.

Deputy Paudie Coffey: Information on Paudie Coffey Zoom on Paudie Coffey How would it pay for local services? It does not tell us. This is the great economic black hole that Sinn Féin has created. In the North it is happy to collect an average of £1,000 per household for spending on local services.

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