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 Header Item Finance (Local Property Tax) (Amendment) (No. 2) Bill 2015 [Seanad]: Second Stage (Continued)
 Header Item Business of Dáil
 Header Item Finance (Local Property Tax) (Amendment) (No. 2) Bill 2015 [Seanad]: Second Stage (Resumed)

Friday, 11 December 2015

Dáil Éireann Debate
Vol. 900 No. 3

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(Speaker Continuing)

[Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín] If the Government does that, then, according to EU rules, the money will have to be taken from public services. Therefore, not alone is the Government destabilising the economy and shifting the stability of the taxation base in doing so, it is also destabilising future public services.

Another issue raised by the Irish Fiscal Advisory Council in the context of stability relates to the fact that mid-term forecasting by the Department of Finance is not accurate. The council said the Department needs to use more accurate tools and highlighted the inaccuracy in the corporation tax estimates. Interestingly, anybody who took an interest in the banking inquiry would be aware that one of the main issues arising was that the forecasts of the Department of Finance were not accurate. Fortunately, a significant level of external factors are blowing behind the country and bringing it to a healthier economic space. These factors include low interest rates, favourable exchange rates, quantitative easing - which is flushing cash through the system - and low oil prices. However, we should not forget that in Bertie Ahern's time as leader of the Government, there were extremely low external interest rates blowing behind the economy and we had little control over those.

What we need to do to create stability is to create a stable, indigenous export sector, which hardly exists here at present. This sector is very small in comparison to those of countries of a similar size. We also need to ensure we have a broad taxation system that focuses on ability to pay. In the 1980s, a school of economic thought existed which suggested that taxation would be better levied based on the ability to pay. The Government has sought to divorce itself from that concept and separates taxation from ability to pay and the reason this Bill is before us is the failure in that regard. When the Government introduced the property tax, it stated that property was a form of wealth and income within a household and, therefore, that it is a reasonable way to focus on the wealth or income of a family. However, the truth is the crash we have experienced has sundered the value of houses and the income or wealth of families. For example, people could face a property tax on a house worth €300,000 but they could owe €400,000 on that property. In that case, the property tax is a tax on their debt, which is incredible.

I know a pensioner in my constituency who worked all her life but who finds things tough. Her heating oil was stolen from her tank during the summer and she had to replace it. In order to be able to afford that, she stopped getting up early and now gets up around noon, thereby saving money by not having breakfast. She has a small lunch and then goes to her daughter's house where she has dinner. She has done this to save enough money to get the oil to heat her house. Despite her low income and circumstances, this woman must pay property tax.

We now face an extreme situation where tens of thousands of people throughout the country are knee-high in water, with farms waterlogged and people in extreme difficulty. Some of these individuals cannot even live in their houses at present.

Deputy Anthony Lawlor: Information on Anthony Lawlor Zoom on Anthony Lawlor The Deputy should be asked to stick to the Bill.

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín They are likely to have to eat their Christmas dinner elsewhere. Members of the Government will stand in the photographs highlighting this disaster while the people to whom I refer will still be expected to pay their property tax. That is cynical.

I find this Bill cynical because it represents an admission that the value of a house no longer represents the wealth of a family. A recent study has shown that if house prices continue to rise, the average rate of property tax will increase by €189 per family.

Debate adjourned.

Business of Dáil

Minister of State at the Department of the Taoiseach (Deputy Paul Kehoe): Information on Paul Kehoe Zoom on Paul Kehoe Notwithstanding Standing Orders or anything in the Order of the Dáil of 10 December 2015, there shall be no suspension of the sitting today.

An Leas-Cheann Comhairle: Is that agreed? Agreed.

Finance (Local Property Tax) (Amendment) (No. 2) Bill 2015 [Seanad]: Second Stage (Resumed)

  Question again proposed: "That the Bill be now read a Second Time."

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín If property price inflation continues, the average family will face a property tax bill approximately €180 higher by 2019. As a result, the Fine Gael backbenchers from south Dublin and elsewhere come into the House and create a racket and burn the ear off the Minister for Finance. They say that now, as the election approaches, people are facing a massive increase in property charges on their houses and ask what the Government is going to do about it. They say seats are on the line and call for a change in policy. Cynically, the Government decides to freeze the charge and leave it to the next Government to make a change. The question that should be asked is whether property reflects the wealth and income of a family. It does not because the crash has sundered that relationship and the Government thinks the people are naive in regard to what it is doing through this Bill today.

This Bill is an admission that the local property tax system is broken. For a long time, Sinn Féin has been saying the property tax is an unfair and broken model. We need to ensure we have a fairer model.

Deputy Anthony Lawlor: Information on Anthony Lawlor Zoom on Anthony Lawlor Will Sinn Féin vote against this today?

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín There are no Labour Party Deputies present in the House. However, Labour Party Deputies have been singing about this matter during the past year. Where they are on local authorities with Sinn Féin, which has been using its mandate to reduce local property tax, they have been criticising what Sinn Féin has been doing and saying it is hollowing out the income of local authorities, which is required for local authority services. Now we will see the Labour Party is happy to row in behind Fine Gael on this Bill and do what, in effect, Sinn Féin was trying to do, namely, ameliorate the impact of an unfair tax on those finding it difficult to pay that tax. It is disappointing no Labour Party Members are present.

I am also disappointed that this Bill just tinkers around the edges of this tax and does not address the issue as it should. Exemptions are mentioned but Sinn Féin in government would exempt every family from the property charge. We would seek a taxation system that reflects ability to pay. The Labour Party has spoken about a wealth tax for properties valued at over €1 million. Very little has been achieved in that regard. The property tax has a greater impact on those on low incomes.

It is a pity this debate is being rushed. I take it that, as a result of what the Chief Whip has announced, we may get a longer time to debate the Bill.

An Leas-Cheann Comhairle: There are just two and a half hours for this debate. The Deputy has 16 of his 30 minutes remaining.

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín Sinn Féin has submitted amendments and I hope we will have time to debate them. It will be a travesty if we do not. I hope the Government will respond and say that it will amend the Bill to ensure that exemptions will include people suffering as a result of the floods. Mention was made of exemptions from the tax for people whose homes have been affected by pyrite but only 80 people have benefited from that exemption. Only 5% of those people whose homes are affected have benefited so far and the paperwork required to deal with gaining recognition of their pyrite problem has almost cost more than what has been gained through the exemption.

I am disappointed the Minister has not sought to provide a similar exemption for those affected by the mica block issue in Donegal or for the people in Longboat Quay or in Riverwalk Court in County Meath. Many people live in accommodation which is not fit for purpose and does not comply with safety regulations, yet the Government is blind to that in respect of this tax. These residents are left outside the scope of the exemptions and are forced to make declarations on their own behalf. It is unfair to place the legal pressure on their shoulders.


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