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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 Brian Stanley: Information on Brian Stanley Zoom on Brian Stanley] Now they are obliged to pay an additional tax for the very same services. Some households will also pay separately for fire services and so on, while every household is now paying separately to private companies for waste collection.

The Minister for Finance, Deputy Michael Noonan, is not in the Chamber tonight. He took over the management of this tax from the Minister for the Environment, Community and Local Government, Deputy Hogan, last year, but he has sent the latter in here tonight as a backstop for the Government. Deputy Noonan has disappeared, along with the Minister of State at his Department, who made false accusations before running out of the Chamber. The Minister for Finance must have woken up dizzy this morning after all the spinning he did yesterday. He claimed that Sinn Féin presided over domestic rates in the North, which he equated to a local property tax. He neglected to outline the services covered by that payment. He also forgot to mention that, unlike the family home tax in this State, the provision in the North includes a clause whereby people who have an inability to pay are exempted. People on disabled person's allowance, for example, pensioners and those in receipt of housing benefit do not have to pay.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan What about the principle of the tax?

Deputy Brian Stanley: Information on Brian Stanley Zoom on Brian Stanley The Minister stuck it to all those categories of people in this State. I am not here to defend the Six Counties.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan Yes; I thought the Deputy was in favour of a united Ireland.

Deputy Brian Stanley: Information on Brian Stanley Zoom on Brian Stanley We want to see an end to the Six Counties state. Republicans in Sinn Féin are committed to abolishing it. If the Minister, Deputy Hogan, is talking to his British counterpart at one of their many meetings he should say that to him.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan The Deputy's party talks to him too.

Deputy Brian Stanley: Information on Brian Stanley Zoom on Brian Stanley The Minister for Finance failed to acknowledge that the rates in the North cover such services as education, including school books, transport and meals, fire services, emergency services, health care, social services, roads with no tolls, waste collection, water, sewerage, including septic tank desludging, and leisure and recreational facilities. In this State, on the other hand, householders have to pay up to three times for some of these services, first through income tax, then through the family home tax and finally through local charges.

The Government is intent on forcing people, particularly low and middle-income families, to pay for this recession. It has failed utterly to ensure the pain is shared, instead heaping it on those least able to bear it, people who played no part in causing the economic crisis. After two and a half years in office, the Government's mantra of blaming the Fianna Fáil Party is beginning to wear thin.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan The Deputy was blaming Fianna Fáil a few minutes ago.

Deputy Brian Stanley: Information on Brian Stanley Zoom on Brian Stanley I assign that party the blame it is due. The family home tax is simply a tax too far. Yet people will also face bills for water next year, those charges being introduced, rather conveniently, after the local elections are out of the way. Is there no threshold below which the Government is not prepared to stoop in order to ensure the rich in our society do not have to pay?

The Minister of State at the Department of Finance, Deputy Brian Hayes, spoke in his contribution about taxation. He did not even have the relevant figures. I have them in my hand, direct from the Minister's senior officials in response to a parliamentary question. The figures show that people earning between €100,000 and €125,000 paid income tax of 21%. This information is on the public record, yet the Minister of State is not even aware of it. That is disgraceful. He does not have the information but he sees fit to make a false accusation before running out of the Chamber.

I understand that Michael O'Leary of Ryanair, who lives in a huge mansion in Westmeath which is reportedly valued at millions of euro, allegedly falls into category three of the property tax, which means a payment of €157 this year. That is amazing. The tax makes no distinction between rich and poor. Whether at the behest of Fianna Fáil, Fine Gael or the Labour Party, it is an imposition that punishes the poor and those on low incomes. It is they who are feeling the pain, not Michael O'Leary and others like him.

There are far more equitable ways of raising the money that will be taken through the property tax. We accept that moneys must be raised for the State so that services can be funded.

Deputy Paudie Coffey: Information on Paudie Coffey Zoom on Paudie Coffey There was no sign of that in the party's budget.

Deputy Brian Stanley: Information on Brian Stanley Zoom on Brian Stanley We put forward a host of suggestions for cutting the cost of local government, as the Minister, Deputy Hogan, is well aware. Reform in that area requires cutting out some of the deadwood and reducing the salaries of those at the top and the numbers of directors of services and other senior staff, while at the same time increasing the number of front-line staff. That will save money in both the short and the long term.

There must be a reform of the tax system. We are calling on the Government to do what other countries do, such as introducing a wealth tax or a 48% tax rate on incomes over €100,000. These are some of the same proposals put forward by the Labour Party before it went into government. The Minister for Finance said last night that the family home tax has reference to ability to pay. In truth, there is no such clause or provision, which means the Minister either did not read his own Bill or misled the House. He went on to claim yesterday evening that he was satisfied that the poor and vulnerable would be protected under the terms of this tax. That simply is not true. Payment can be deferred but there is no waiver. Moreover, people who opt to kick the can down the road will be penalised to the tune of 4%. People are terrified of that situation. The poor and the vulnerable will pay the exact same as the Taoiseach and the millionaires in our society. The only option for households that cannot afford to pay the tax is to defer and suffer the 4% charge or ignore it and pay the 8% penalty thereafter.

This is an unjust tax which should be scrapped. What is required instead is a system of progressive taxation. In the meantime, however, the family home tax must be repealed. People cannot wait until the next general election before that is done. I appeal to Deputies on the other side of the House to put their feelings of loyalty to the Government to one side and to vote for our Bill to progress to Committee Stage.

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín The first rule of any tax should be the ability to pay. Some weeks ago I spoke to a man who is at breaking point. He has debts of some €20,000 arising from a collapsed business and a mortgage which was approximately €160,000 several years ago and on which he has been unable to make repayments. His business debts have increased to €30,000 while the mortgage has gone up to €190,000 as a result of his failure to make payments. When he purchased his home, which is in negative equity, he paid tens of thousands in stamp duty. He and his wife are unemployed and he has two children who are students. This individual is faced with a debt mountain which he has no prospect of clearing. Yet the Government's response to people like him is to impose yet another charge they cannot hope to pay on top of existing unsustainable debt.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan If that individual is in receipt of mortgage interest supplement he would have been exempt from the charge last year.

Acting Chairman (Deputy Seán Kenny): Information on Seán Kenny Zoom on Seán Kenny Order, please.

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín I met a couple last week, of whom one has lost his job and the other is working 15 hours per week. For one week out of every month they have absolutely no money. In the winter, for example, they cannot afford heating for one week in every four. One of their children has asthma and each month they have to beg and borrow the money to bring the child 15 miles up the road.

Deputy Phil Hogan: Information on Phil Hogan Zoom on Phil Hogan Those people are fortunate they are not living in Northern Ireland.

Deputy Sandra McLellan: Information on Sandra McLellan Zoom on Sandra McLellan If they did they would have access to free prescriptions and transport.

(Interruptions).

Acting Chairman (Deputy Seán Kenny): Information on Seán Kenny Zoom on Seán Kenny Deputy Tóibín, without interruption.

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín Some 180,000 mortgages in this State are in distress, the home owners in question living in terrible fear of repossession. Credit unions have indicated that 1.8 million people in this State are scraping for less than €100 at the end of the month. Hundreds of thousands are in negative equity and imprisoned by the unsustainable debt created by a collapsed market. What is the Government's solution to all of these issues? It has imposed an unaffordable property tax on people who simply cannot afford it.

Deputy Paudie Coffey: Information on Paudie Coffey Zoom on Paudie Coffey What is Deputy Tóibín's solution?

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín I am happy to outline it if the Deputy will be patient. Some 400,000 people who had no job were given one in order magically to conjure up enough money to pay the property tax. People living in ghost estates who are obliged to be vigilant every day in ensuring their children do not fall into the holes where the paths should be are obliged to pay the tax. People who built houses on sites and paid €15,000 for services that were never provided are liable for the charge. People in local authority housing are obliged to pay it. Even if one accepts the principle of a property tax, it makes no sense to impose it at a time when earnings and incomes are completely ruptured from the collapse in property values. People are already dealing with cuts in child benefit, increased motor charges, carbon taxes, excise duties, prescription charges and VAT imposed by this Government, as well as the imminent introduction of water charges.

After affordability, the second rule of any tax is that individuals should only pay their fair share. Many people in this country have paid stamp duty on their homes. Anybody who paid €20,000, for example, has already contributed a multiple of the annual property tax charge. The third rule is that every tax should serve to improve society. The property tax, however, will make no difference to the provision of public services and will add nothing to the ability of local authorities to serve citizens.


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