Amendments Nos. 118 and 119 are related and may be discussed together.
SECTION 131.
I move amendment No. 118:
In page 151, paragraph (c), line 8, to delete "and".
Amendment agreed to.
I move amendment No. 119:
In page 151, between lines 8 and 9, to insert the following:
"(d) by the substitution of the following subparagraph for subparagraph (ii) of paragraph (a):
‘(ii) does not carry a right of conversion into stocks or marketable securities (other than loan capital) of a company having a register in the State or into loan capital having such a right,'
and".
Amendment agreed to.
Section 131, as amended, agreed to.
Sections 132 and 133 agreed to.
NEW SECTION.
Amendment No. 120 is an alternative to amendment No. 121 and both may be discussed together.
I move amendment No. 120:
In page 153, before section 134, but in Part V, to insert the following new section:
134.—Part VI of the Finance Act, 1983 is hereby repealed with effect from the 6th day of April, 1995.".
Part V of the Finance Bill relates to residential property tax. As I said in my budget speech, I propose that residential property tax be abolished. Amendment No. 120 states that "Part VI of the Finance Act, 1983 is hereby repealed with effect from the 6th April, 1995.". This would repeal the legislation regarding residential property tax.
This tax was introduced in 1983 and some changes were made in last year's budget which caused more of a furore than the amount of revenue accrued to the State. Property taxation has been debated by all political parties in the House at various stages. Unfortunately, the nearer one comes to an election, the more the ardour of all politicians, including those in my own party, regarding local authority funding as it applies to some form of property taxation, seems to dissipate. Such issues should be dealt with in the early stages of a Government. Since 1983 - we were in Government after that — I have always maintained that the residential property tax is a Mickey Mouse one; it is not a property tax or an income tax. It was a grandiose idea to create a halfway house in the 1982-87 Government. The Government suggested we have a further debate about local authority funding and, possibly, property taxation. I was first elected to the House as a result of a proposal in a very famous manifesto. Otherwise I probably would not be here. I do not know if Irish life would have been better or worse off if I had not been elected.
Probably worse off. Is the Deputy condemning that manifesto?
The residential property tax is not worth the candle for the small amount of money it raises. This was proved last year by the furore caused by the minimal changes made to it. It is neither one thing nor the other. I am now lucky enough to be in a position, as spokesperson on finance, to convince my party that this section should be repealed. I am gladly availing of the opportunity to say so because I said many years ago in Opposition that the tax should never have been introduced.
I support my colleague on this issue and wish to make one other point about how the tax is outrageously unfair. If a person buys a property as an investment for his or her family and future and takes a very large mortgage out on that property, that person is also liable for this tax. It takes no account in real terms of ability to pay in the context of the size of the mortgage. I would have no objection if many of these taxes were looked at on the basis of the net value of property as opposed to what one might owe to a building society or bank. It would be a much fairer way of looking at these taxes. We must all collectively face up to this. I agree with Deputy McCreevy. The state of local government is disastrous and this tax did nothing to improve the situation. The income from it nationally is a total waste of time given the anger and angst it caused.
We should not cower before the wrath of the higher income classes, which was stoked unscrupulously by the then Opposition parties.
The Deputy would not even support service charges for the past 15 years——
The Deputy's party had the opportunity between 1989 and 1992 to do something about it if it wanted to do so. The revenue from this tax should be made available to local authorities rather than to the Central Fund.
I am delighted that two parties in the Dáil are committed to the abolition of this tax. Heretofore it was only one. I reiterate the offer I made during the debate on every Finance Bill to which I proposed an amendment along these lines, that my party will participate in an all party committee, at the end or the beginning of the life of a Dáil or at any time during it, to examine the question of funding local government.
I reject Deputy Derek McDowell's suggestion that the proceeds of this tax should be given to local authorities. It would have no effect. The amount of money raised in Mayo, for instance, would be practically zero. We need an honest approach to this. I reject the notion that this is a question of pandering to the upper middle classes. In Dublin South East, the constituency of the Minister - and mine - virtually every house is now liable for this tax. A person cannot buy a modest terraced red brick house anywhere in our constituency south of the canal which is not liable for the tax. These houses are not owned by upper middle class people.
This tax is ideological, unwanted and inpractical. It gives the question of any tax other than a tax on income a bad name and it should be repealed immediately. There is a commitment in the programme for Government to examine this tax. The Government should get on with this examination. If it wants to adopt an all party approach in replacing it, it should ask for it. The present cowardice is not acceptable.
This committee has a duty to look at what is causing high unemployment. We had a great deal of debate yesterday and the day before about the impact of taxation and the excessively high levels of income tax. We over-tax everything dynamic and under-tax everything static. Property taxes are unavoidable if we are to address unemployment. There is far too much humbug and talk about all party committees and reducing a modest tax.
The proposal is that we throw out the whole idea of property tax, whereas there should be amendments proposed to it. If there are faults in the tax, such as that it is not related to net values, as Deputy Cullen said, we should table amendments on those lines. Unless we, as politicians, are prepared to address the reality that static things have to be taxed more and dynamic things taxed less, we will not in any significant way address the unemployment numbers.
Amendment put.
A division has been challenged on this amendment and it is postponed until 1.30 p.m.
Sections 135 to 139, inclusive, agreed to.
NEW SECTION.
I move amendment No. 122:
In page 154, before section 140, to insert the following new section:
140.—Subsection (1) of section 2 of the Principal Act is hereby amended by the insertion of the following definition after the definition of ‘valuation date':
‘"year of assessment" has the meaning assigned to it by section 1 of the Income Tax Act, 1967;'.".
Amendment agreed to.
I move amendment No. 123:
In page 155, subsection (1) (d), lines 3 and 4, to delete "real property which is agricultural property" and substitute "agricultural property, other than crops, trees or underwood,".
Amendment agreed to
Section 140, as amended, agreed to.
NEW SECTION.
I move amendment No. 124:
In page 155, before section 141, to insert the following new section:
141.-Paragraph (a) of subsection (5) of section 52 of the Principal Act is hereby amended by the insertion of the following subparagraph after subparagraph (x):
‘(xi) the refusal of an application for an appeal hearing,'.".
Amendment agreed to.