Vol. 472 No. 8
8 Mr. Cullen asked the Minister for Finance the plans, if any, he has to abolish the residential property tax; and the plans, if any, he has to reduce the levels of tax relief which will be made available to the PAYE taxpayer for the forthcoming tax year in respect of the residential property tax. [24143/96].
The Government's programme of renewal indicated that the future of residential property tax would be considered in the context of a professional study of local government financing undertaken by the Minister for the Environment. As part of the study process a report, The Financing of Local Government in Ireland, was published by that Minister on 27 June of this year.
The Minister has recently indicated that he will publish a strategy statement on local government before the end of this year. The question of residential property tax will also be considered in the context of this strategy statement. Any taxation proposals in relation to the PAYE sector will be announced in the budget. I do not plan to outline these at this stage. The burden of tax on this sector has been reduced in the last two budgets and it is hoped to continue this reform in 1997.
Perhaps the Minister could bring back to his colleagues in Government, particularly the Minister for the Environment, the suggestion that he stop testing the public water by various leaks as to how this should be paid for. About two weeks ago a kite was flown regarding road tax. That was quickly shot out of the sky. Another kite is now being flown about stamp duty and increasing the price of petrol. Will the Minister bring his well known attribute of commonsense to bear on some of his colleagues in Government and ask them to make up their minds?
Deputy McCreevy is sufficiently experienced to cast a cold eye on all such speculation in the newspapers. All matters affecting budgetary considerations, the PAYE and other sectors will be given extensive and careful consideration by the Minister for Finance and his Government colleagues. They will direct the structure of the budget and its taxation aspects.
What is the Minister's view of the suggestion that the abolition of residential property tax and service charges should be financed by increasing the price of petrol and stamp duty on certain houses?
I would be cautious about assessing newspaper speculation in a vacuum. Budgetary considerations must be looked at as a whole. All aspects of taxation must be considered together and that will be done carefully. The Deputy may be assured that all aspects will be taken into account and the correct decisions will be made. However, we must await their announcement in the usual manner on budget day.
Will the Minister indicate whether there is division at Cabinet on the future of the residential property tax? The Minister did not address the present media speculation about other means of recouping revenue that might be forgone with the abolition of residential property tax or water charges. Is there a consensus emerging on the matter at Cabinet?
I restrain myself from engaging in speculation about media comments based on little or no substance. I assure the Deputy the Government is solid on its taxation policies. It will produce the next budget as it produced the last, with unanimity, great care and concern for the economy. For the first time in 40 years there may be a reduction in the national debt in real terms, apart from ongoing reductions in the ratio base. It is a remarkable achievement which is testament to the Government's economic, employment and taxation policies. They will be followed through in the same vein in the 1997 budget.
The Minister referred to speculation in a vacuum. Are we to assume there is no proposal until the strategy document is published by the Minister for the Environment? Are we to assume from what the Minister said about the matter being addressed in the 1997 budget that the strategy document will be followed by implementation in the budget? Will the Minister indicate whether, in those circumstances, it is fair to suggest that the idea floated about giving local authorities discretion with regard to motor tax was entirely speculative and did not come from the Minister for the Environment or his Department?
Deputy Michael McDowell has sufficient experience to know what weight to place on the ongoing media reports. The Deputy would be better engaged looking at the economy's performance than at media speculation from reporters trying to make names for themselves. The issue of taxation will be dealt with carefully and prudently in the budget. I know Deputies are anxious to glean information as to what may be in the budget but, as is usual, they will have to be patient. The good news will come in the fullness of time. The improvements in taxation will be continued in the budget and will be to the satisfaction of Deputies. The economy is doing well, indeed, it has never been better. The trends are excellent and the Government aims to continue on that course in a prudent manner. Let us forget speculation and look at the facts which speak for themselves.
Does the Minister agree that all parties, including the Progressive Democrats and Fianna Fáil, presided over the operation of the residential property tax? Does he further agree that in this year's budget the Minister for Finance for the first time reduced the number of households and the amount of revenue pro rata from this tax?
I agree with the Deputy.
Since all parties have been mentioned will the Minister take the opportunity to agree with me that the residential property tax was an unmitigated disaster and should not have been insisted on by the Fine Gael Party, as we have learned from Dr. Garret FitzGerald's memoirs?
It cannot possibly have been an unmitigated disaster. If it had, Deputy Michael McDowell's party would have abolished it when it was in Government.
9 Mr. O'Malley asked the Minister for Finance the total amount received in residential property tax by county and by postal district in Dublin for the tax year 1995-96; and if he will make a statement on the provisional yield of such tax in the current tax year. [24159/96]
25 Mr. Molloy asked the Minister for Finance the total amount received in residential property tax by county and by postal district in Dublin for the tax year 1995-96; and if he will make a statement on the provisional yield of such tax in the current tax year. [24160/96]
I propose to take Questions Nos. 9 and 25 together.
I am informed by the Revenue Commissioners that the analysis of residential property tax payments by county and by Dublin postal districts for the valuation date 5 April 1995 is as shown in the following table. I am informed that an equivalent analysis is not as yet available for the 1996 valuation date. However, it is anticipated that the 1996 breakdown will not differ substantially from that for 1995. The projected yield for 1996 is £14 million which includes receipts for the current valuation date 5 April 1996 and arrears for previous valuation dates.
TABLE*
Residential Property Tax Payments
Analysis by County and Dublin Postal Districts
Valuation Date 5 April, 1995
|
County |
Tax Paid |
Dublin Postal District |
Tax Paid |
|
£ |
£ |
||
|
Carlow |
16,929 |
Dublin 1 |
16,874 |
|
Cavan |
12,052 |
Dublin 2 |
180,080 |
|
Mayo |
25,698 |
Dublin 3 |
186,333 |
|
Kilkenny |
32,238 |
Dublin 4 |
1,071,475 |
|
Kildare |
208,937 |
Dublin 5 |
40,069 |
|
Clare |
35,715 |
Dublin 6 |
806,777 |
|
Longford |
2,954 |
Dublin 6W |
94,129 |
|
Donegal |
41,011 |
Dublin 7 |
38,375 |
|
Leitrim |
2,215 |
Dublin 8 |
9,180 |
|
Louth |
45,900 |
Dublin 9 |
58,221 |
|
Monaghan |
21,533 |
Dublin 10 |
0 |
|
Limerick |
152,679 |
Dublin 11 |
7,845 |
|
Westmeath |
24,153 |
Dublin 12 |
9,001 |
|
Sligo |
21,316 |
Dublin 13 |
462,222 |
|
Offaly |
18,675 |
Dublin 14 |
584,090 |
|
Galway |
216,096 |
Dublin 15 |
312,234 |
|
Dublin |
7,381,344 |
Dublin 16 |
128,777 |
|
Kerry |
51,845 |
Dublin 17 |
6,075 |
|
Laois |
7,039 |
Dublin 18 |
906,048 |
|
Tipperary |
77,163 |
Dublin 20 |
8,790 |
|
Cork |
487,873 |
Dublin 22 |
1,469 |
|
Roscommon |
4,537 |
Dublin 24 |
9,189 |
|
Waterford |
74,363 |
Dublin County |
2,440,401 |
|
Meath |
140,592 |
Dublin Unknown |
3,690 |
|
Wexford |
33,083 |
||
|
Wicklow |
382,139 |
||
|
Unclassified |
13,480 |
||
|
Total |
9,531,559 |
Dublin Total |
7,381,344 |
* Position as at 5 January 1996.
Deputy Costello should note that despite the first ever reductions in this tax he claimed were made in last year's budget, the amount of the yield from the tax has increased. Will the Minister comment?
Deputy Costello's comments speak for themselves. This tax has been in operation for some years, during the lifetimes of Governments involving all parties in the House. It will be considered carefully by the Minister for Finance and the Government in the context of the 1997 budget.
To what extent does the yield of £14.6 million exceed the budget estimate? Will he explain the reason for the increase given that, according to Deputy Costello, there was a reduction in the number of households involved?
I do not have that figure.
Given that the yield has shot up to £14 million, it is just as well the Minister did not increase the tax in the budget. If he had done so, the yield would probably be £30 million to £40 million.
Deputy Costello said there are fewer houses involved. Other considerations apply. As Deputy McDowell knows, household income, house valuations and so on are taken into account in assessing liability for residential property tax.
Is it the case that the number of households involved has reduced?
I do not have that information but it could be the subject of a very good second question. I invite the Deputy to table it.
Does the Minister regard residential property tax as fair and equitable? Does he have information which suggests it is biased against residents in Dublin? If he does not regard it as being unfair, what features suggest to him it is fair?
I will give the Deputy the same reply I gave to Deputy McDowell. If the tax was so unfair, the Deputy's party, Fianna Fáil, would have abolished it in all the years it was in power. Under no circumstances would it support a tax it considered to be unfair.
I did not ask the Minister about my party, I asked him about his.
However, it ran with it and increased it on occasion. That is not to say that its terms, like those of every other tax, will not be carefully considered and examined in the context of the 1997 budget.
By how much did house prices in the Dublin area increase in 1995 and 1996? Has any thought been given to transferring the tax to private property in the ownership of landlords?
I do not know by how much house prices have increased but I recall reading a report in recent days which suggested that they increased substantially during the past 12 months.
That is the key to the question raised by Deputy Fitzgerald. What has made this tax more unfair and grotesque since its introduction by Dr. Garret FitzGerald and Deputy Eithne Fitzgerald before her appointment as Minister of State——
It was retained by the Progressive Democrats.
——is that more and more ordinary family homes in this city are being swept towards it by a tide of high house prices over which individual taxpayers have no control. Will the Minister agree it is deeply unfair on hard-pressed families struggling to make ends meet in ordinary homes in this city that their bill can be doubled from £300 to £600 out of post-tax income because of buoyancy in the housing market over which they have no control?
The Deputy is waxing lyrical on this subject but it rings rather hollow. House prices have been increasing year on year for many years.
Since 1969.
The Deputy's party continued to operate this tax when in Government. House prices are not the sole criterion, household income is also taken into account. Deputy Fitzgerald's party also continued to operate it happily when in Government. Most people will see it in that light.
Does the Minister consider the tax is heavily biased against Dublin residents? Will he face up to this?
The Deputy's party continued to operate it when in Government and increased it on occasion.
The Minister should answer the question.
All taxes will be reviewed in the context of the budget. When the tax was reviewed in previous years, the Deputy's party did nothing about it.
