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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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  8 o’clock

(Speaker Continuing)

[Deputy Paudie Coffey: Information on Paudie Coffey Zoom on Paudie Coffey] Of course, Sinn Féin points the finger of blame up there at Westminster, while here it points it at the Irish Government. The party always puts it on the other hand and the other finger. This is real populism at its very worst. Regarding the Independents and the independent socialists, I always thought that socialism promoted and supported the idea of progressive taxation, but not the unique group that we have, the motley crew in Dáil Éireann. They, and indeed Sinn Féin representatives, went around this country encouraging people, at marches and public meetings, not to pay the household charge.

Deputy Sandra McLellan: Information on Sandra McLellan Zoom on Sandra McLellan We did not do that.

Deputy Paudie Coffey: Information on Paudie Coffey Zoom on Paudie Coffey What was the result? They were competing with each other. Sinn Féin was competing with the independent socialists, going into communities and telling people not to pay their taxes. Where are they now, when those people have to pay more? They have codded the people and now they have deserted them. That is what Sinn Féin was doing - going around the country, cod acting and leading people astray.

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín Earth to cuckoo land.

Deputy Paudie Coffey: Information on Paudie Coffey Zoom on Paudie Coffey That is the ill-judged, populist politics in which Sinn Féin is engaging.

Acting Chairman (Seán Kenny): Information on Seán Kenny Zoom on Seán Kenny The Deputy is over time.

Deputy Paudie Coffey: Information on Paudie Coffey Zoom on Paudie Coffey The Sinn Féin Deputies come back in here and table parliamentary questions to Ministers in this House, encourage their local authority members to demand and insist on services and so forth, but they never demand to know where the money will come from.

Acting Chairman (Deputy Seán Kenny): Information on Seán Kenny Zoom on Seán Kenny The Deputy must conclude.

Deputy Paudie Coffey: Information on Paudie Coffey Zoom on Paudie Coffey That is the populism and the lack of leadership that Sinn Féin has and always will have.

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín That was a fact-free contribution.

Deputy Mary Mitchell O'Connor: Information on Mary Mitchell O'Connor Zoom on Mary Mitchell O'Connor On a quieter note, Deputy Doherty seems to have overlooked the fact that this property tax was voted for in here, in this Chamber, democratically only a few months ago. Why is the Deputy wasting our time putting forward such a Bill at all? It would be great-----

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín The Deputy should ask her constituents.

Deputy Mary Mitchell O'Connor: Information on Mary Mitchell O'Connor Zoom on Mary Mitchell O'Connor I will answer that point shortly. It would be great if we could get on with more pertinent matters such as-----

Deputy Aengus Ó Snodaigh: Information on Aengus Ó Snodaigh Zoom on Aengus Ó Snodaigh We could go on about private schools, for example, as the Deputy did yesterday.

Deputy Mary Mitchell O'Connor: Information on Mary Mitchell O'Connor Zoom on Mary Mitchell O'Connor -----how the taxes are returned to the constituencies. Dún Laoghaire constituency had one of the highest compliance rates for the household charge at 89%. By comparison, Donegal, represented by Deputy Doherty, had the lowest rate of compliance, at 65.8%. It is unthinkable for my constituents to be forced to subsidise Deputy Doherty's flock.

Deputy Aengus Ó Snodaigh: Information on Aengus Ó Snodaigh Zoom on Aengus Ó Snodaigh We have been subsidising the private schools in Deputy Mitchell O'Connor's constituency for long enough. The Deputy was crowing about them yesterday.

Deputy Mary Mitchell O'Connor: Information on Mary Mitchell O'Connor Zoom on Mary Mitchell O'Connor I will be insisting that 79% to 80% of the constituency's moneys be returned to Dún Laoghaire, to match the compliance rate. The distribution of local authority funds must be fair and proportionate to revenues collected. I will not countenance some counties paying for everything while others pay for nothing. As my constituents in Dún Laoghaire are paying huge property taxes-----

Deputy Aengus Ó Snodaigh: Information on Aengus Ó Snodaigh Zoom on Aengus Ó Snodaigh The constituents of Dún Laoghaire are some of the wealthiest in the country, is that not so?

Deputy Mary Mitchell O'Connor: Information on Mary Mitchell O'Connor Zoom on Mary Mitchell O'Connor -----I will be seeking a further lowering of parking charges and commercial rates as a result of this money reverting back to the constituency. At a small-business meeting in Dún Laoghaire last week, the resounding cry from the SME representatives and traders present was that commercial rates were killing their business. This cannot continue. If Dún Laoghaire pays the most, then by God, they will get the most back to fund their roads, cemeteries, parks and so forth. Unlike Deputy Doherty, who is not in the Chamber at the moment, we in Government are more concerned with how we can improve this country rather than wasting time. If the Deputy had any real and relevant solutions as to how he would improve the country, I would love to hear them. He should stop wasting time, stop being populist and stop his antics.

Deputy Peter Fitzpatrick: Information on Peter Fitzpatrick Zoom on Peter Fitzpatrick A property tax is necessary to restore our public finances. We cannot continue to spend more money than we raise in taxes. We are borrowing approximately €1 billion per month and we still have to reduce the general Government deficit to below 3% of GDP by 2015. A property tax is a responsible way to reduce this deficit. The OECD commission on taxation and the ESRI agree that a property tax is less harmful for the economy than other forms of tax. It is a tax on assets rather than employment and, therefore, will not negatively affect job creation. The rate of the property tax will not be increased in the rest of the term of this Government, after it becomes fully operative in 2014. The Government property tax is fair and progressive, as more expensive properties are liable to more tax in cash terms. This is because the tax is a percentage charge of 0.18% of the value of the property. A further progressive feature is the higher rate for houses worth €1 million or more, which are liable to a rate of tax of 0.25%. This higher rate allows for a lower standard rate for everybody else.

A property tax is a form of wealth tax. Property is the main form of wealth for most people in this country and the best one to tax, as property cannot be moved abroad. A system of voluntary deferral arrangements for owner-occupiers will be implemented for cases where there is an inability to pay, where gross income does not exceed €15,000 for a single person and €25,000 for a couple. For income-stressed owner-occupiers who have an outstanding mortgage, an adjustment to gross income will apply such that 80% of the mortgage interest can be subtracted from gross income in determining an inability to pay. There are some exemptions from the LPT such as for houses in unfinished estates. There is also a three-year exemption from property tax for buyers of new homes and first-time buyers.

Sinn Féin's opposition to a property tax in the South does not appear to be shared in the North. While sitting in government in Northern Ireland, Sinn Féin agreed to an increase in household rates of over 10% from 2011 to 2014. This is on top of the existing high levels of tax. A house worth £200,000 in Derry is liable to household rates of over £1,500 per annum. Fianna Fáil would keep the household charge which this Government's property tax replaces. Therefore, Fianna Fáil would actually have a property tax but it favours a flat rate where everyone pays the same amount regardless of the value of the house.

Deputy Áine Collins: Information on Áine Collins Zoom on Áine Collins I welcome the opportunity to speak on this Bill. No one here wants to increase the tax burden for anyone. All of us would like to be in a position to improve the lives of our constituents. All politicians want to be in a position of announcing and implementing good news again for our constituents. However, some of us live in the real world and we have seen many examples of irresponsible attitudes in politics in the past. These have landed our country, our people and many of our families in an awful mess. Sometimes it is easy for us to forget that just two and a half years ago there was a real possibility that we would run out of money. There was a huge concern about how we would pay for essentials like social welfare payments and salaries for public servants such as nurses, doctors, teachers and gardaí. The money we needed to support our health and education services was under threat. We needed new taxation measures to raise revenue. Unpopular measures were needed in order to maintain basic services. This Government has had the courage to implement these measures and we have restored the financial integrity of the State by doing so.

It is internationally accepted that a property tax is one of the fairest and most effective ways of raising revenue. However, doing what is right is not always popular. It will cost the parties which implement such measures dearly in popularity terms. This Government is simply putting the country and our people first. There is no easy political gain in any of this. However, this Private Member's motion from Sinn Féin is nothing more than political expediency. Sinn Féin constantly tells us that it accepts the figure for the overall fiscal adjustment that is needed but it knocks every measure proposed by the Government to meet the adjustment targets. We must have a sustainable balance between our income and our expenditure, like any good household.

We have come a long way over the last three years. We can provide services, while at the same time sowing the seeds of recovery in our economy. That is exactly what is happening. It is wonderful to see that unemployment is finally decreasing - this is the fourth successive quarter in which the numbers are falling. I personally would like to thank the 80% of Irish householders who have paid their property tax to date.

Minister of State at the Department of Finance (Deputy Brian Hayes): Information on Brian Hayes Zoom on Brian Hayes I will start by taking up the point just made by Deputy Collins. On my behalf and that of the Government, I wish to thank the Irish people for their extraordinary patience and compliance. Had anyone suggested at the introduction of this new tax that we would obtain a compliance rate of about 90% within a short number of months, he or she would not have been believed. That is an extraordinary sign of the compliance and the support of the people for this Government. They know the direction in which we want to go. Shouting, roaring and screaming about things will not solve our problems.

Deputy Brian Stanley: Information on Brian Stanley Zoom on Brian Stanley Hear, hear.

Deputy Brian Hayes: Information on Brian Hayes Zoom on Brian Hayes As a society, a Government and a people, we need to chart a way forward. The point has already been made about the need to have a sustainable tax base. In that context, we should not forget one simple statistic. Under Fianna Fáil, in a 12 month period in 2008, tax revenues went from €51 billion to €37 billion. They collapsed because of the collapse of the property market. The task of this Government or indeed any Government, even one involving the Communist Party of Ireland or Sinn Féin, is relatively simple.


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