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

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] This is, unfortunately, a failed tax and no level of spin can change that. The Government is coming to the table for two reasons: to admit the value of a home does not equate to the tax one pays and to put a cap on it because there is an election around the corner and Government party Deputies are under considerable pressure.

An Leas-Cheann Comhairle: To answer the Deputy's question, two and a half hours have been provided for Second Stage and 30 minutes for Committee Stage. That was ordered yesterday.

  For the Technical Group, I call Deputy Catherine Murphy, Deputy John Halligan, Deputy Shane Ross, Deputy Paul Murphy, Deputy Richard Boyd Barrett, Deputy Clare Daly, Deputy Mick Wallace and Deputy Joan Collins.

Deputy Catherine Murphy: Information on Catherine Murphy Zoom on Catherine Murphy There are four of us sharing the slot if that is all right.

An Leas-Cheann Comhairle: There is a total allocation of 30 minutes.

Deputy Catherine Murphy: Information on Catherine Murphy Zoom on Catherine Murphy When the Minister of State made his opening statement he referred to property tax being a secure fund. Motor tax was a secure fund and local authorities were previously provided with resources from it through the local government fund. The guarantee from 1997 was that the fund would be ring-fenced. Property tax has essentially become a replacement for the local government fund.

When one tracks motor tax year on year, one can see how it has been stripped down to the point where there will not be a general purpose fund and local property tax will be that fund. In fact, an amount is taken each year as a subvention for Irish Water. There is no reference to that in the Bill this year but there has been a reference in previous years so I assume that will continue to be the case. This is exactly what is happening, so let us frame it correctly. The 2016 to 2019 period gives people certainty in terms of valuation and benefits those who have the most expensive homes, in particular ones that do not have a mortgage. It is noteworthy that the measure is coming in advance of a general election. This picks up on a point made by the previous speaker, although I would not be giving Fine Gael the election at this stage-----

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín No.

Deputy Catherine Murphy: Information on Catherine Murphy Zoom on Catherine Murphy -----about coming back in 2019.

Deputy Simon Harris: Information on Simon Harris Zoom on Simon Harris It could be a Sinn Féin and Fianna Fáil Government.

Deputy Peadar Tóibín: Information on Peadar Tóibín Zoom on Peadar Tóibín Or a Fianna Fáil and Fine Gael Government.

Deputy Catherine Murphy: Information on Catherine Murphy Zoom on Catherine Murphy It is obvious that the county that pays the most is Dublin. There are net contributors to the fund and net recipients.

There are positive changes on pyrite but only a very small number of people have availed of relief. There is a big omission in terms of people whose houses have tested positively for pyrite but do not yet have damage. Who would buy such a house? What value does such a house have? That is the big omission in terms of giving people relief. There is a blight on locations until such time as people feel there is certainty about the potential damage. No engineer carrying out a structural assessment would give a clean bill of health to a house that has been proven to have pyrite. An engineer will be alert to that if an estate has pyrite in it. That is a big gap.

The inability to pay is not addressed. The rate at which people are charged if they pursue the inability to pay option is approximately 4%, when European Central Bank money is in the negative in terms of borrowing rates. That is punitive and it is very unfair that there should be some benefit to the Exchequer from people who have been able to prove an inability to pay on very tiny amounts of money. Perhaps the Minister of State would address that in his response.

It is difficult to understand the disability categories but it appears there are some positive elements to the scheme. Could a simple explanation be provided? This week we had a big exposé on fairly simple forms not being filled in. I do not know if the Minister of State filled in a tax form recently, but I helped somebody to fill one in and it was pretty difficult. In this case the form was from Revenue. The forms are complicated. Could we have an assurance that we could get them in simple English because different local authorities have different criteria? Reference was made to a cost to the Exchequer but it is the people’s money as it comes from the local property tax. I always find that language pretty odd given that it is a cost on people’s pockets.

In terms of net contributors and net recipients, the Small Firms Association and IBEC said property tax was a good thing before it was introduced because they thought it would broaden the tax base and that there would be a prospect of reducing commercial rates. Of course, they were fooled because all it amounted to was a replacement tax. Property tax is not additional. There are several major flaws. First, people are being charged for property when they are in negative equity. They are paying property tax on a debt. In terms of how the tax is distributed, a small number of local authorities are net contributors and a larger number of local authorities are net recipients. The difficulty is that there is not an equality of service. One could end up being a net contributor in a county such as the Minister of State’s county of Wicklow or my county of Kildare where there are growing populations and needs but that is not factored into the equation. Those counties are punished by virtue of the fact that their baseline was not established at a particular point in time. The needs and resources model was pretty unsatisfactory from that point of view.

If, for example, one looks at staffing levels, the staffing in Meath, for example, is 50% of the staffing in Kerry. I understand Kerry is a net contributor as well, but in Meath the staffing is 50% less. How does one provide services with a lower number of staff? In some local authorities, for example in County Kildare, there are two swimming pools. We need another swimming pool in north Kildare and I have gone on about it for years. The standard is one swimming pool for every 50,000 people and in Kildare we have one swimming pool for every 100,000. That is not factored into a cost to be maintained. If one does not have a service, that is too bad. That is a very substantial flaw if one is asking people to pay a property tax for services and there is not an equality of services for those people. It is possible to make a very clear comparison with people in other local authorities who are perhaps getting a reduction and paying less in property tax but have better services. To be perfectly honest with the Minister of State, this is a very flawed model and I have highlighted some of the flaws that are inherent in the system in the short time available to me.

Deputy Paul Murphy: Information on Paul Murphy Zoom on Paul Murphy What we have from the Government are some pre-election crumbs. They are not even crumbs from the Government’s own cake but crumbs from the people’s cake that the Government has taken from them in the form of the property tax. Even then, it is giving tiny crumbs of it back to them. I can see the leaflets now from Fine Gael in particular but also from the Labour Party, which is completely hypocritical considering the points Deputy Tóibín made about the arguments Labour Party councillors have made on local councils. They will target areas with higher property values explaining that Fine Gael and Labour have managed to stave off the revaluation of people’s homes, saving them a certain sum of money. I do not think people will buy that because they are not stupid. They know the Government - Fine Gael and Labour - introduced the property tax in the first place and so while they say they are saving people from yet more attacks, they did introduce this austerity tax.

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