Finance (Local Property Tax Repeal) Bill 2013 [Private Members]: Second Stage (Resumed)

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

Deputy Luke 'Ming' Flanagan

I support the Sinn Féin Bill. Not for the first time, the Government has introduced a tax which does not do what it says on the tin. We have PRSI that does not provide one with anything and does not do what it says on the tin. The Government has introduced a carbon tax, the proceeds of which will not be spent on insulating people's homes or creating circumstances in which carbon emissions can be reduced. The proceeds of the tax which is the subject of the Bill before us do not go where they are meant to. Far from providing more money for local authorities, all the tax will do is fill the hole the Government has created by paying off debts we never accrued in the first place.

Even if that were not the case, there would be a problem in terms of accountability. If one spends money, there should be accountability in respect of what happens to it. Under the current local authority system and the one the Government plans to introduce, local authority members have and will have no power. They have the power to bow down to the Executive and keep quiet about waste, after which they might get a few crumbs. How can one back a system like that? Even if the money was not being taken from local government, it would simply be going into a bucket with a hole in it. Fix the hole first, please.

Deputy Thomas Pringle

I support the Bill. Many people have seen through the tax. They saw that the only reason it was introduced was to allow the Government to pay off debts to the IMF, ECB and European Commission. The tax is not about improving services to people in local authority areas. For every cent it raises, a cent will be removed from local authority funding. No additional services will be provided nor will it sustain the services that are there already. Across local authorities, people see services being removed and closed.

We must acknowledge that the registration rate has been very high. The Government should clap itself on the back for that. It has frightened, harassed and threatened people to the effect that it was coming after them and will get the money anyway. People recognised that and through fear and gritted teeth, they signed up to pay the tax. As the tax starts to be deducted from people's wages and incomes, their anger will get deeper and deeper. The Government has created that anger by introducing this completely unfair tax and imposing it on people solely to pay off debts to the troika.

I pay tribute to all those who resisted the household charge and the property tax as it was introduced. In particular, I pay tribute to the people of Donegal who resisted these unfair taxes tooth and nail right the way through. They have seen what the tax is doing and will do in future. It is sad to say, but if Sinn Féin had openly supported the campaigns over the last year and a half outside the House rather than opposing the tax inside the House only, we might have been able to build a movement that would have rejected the tax outright and forced the Government to climb down.

Deputy Clare Daly

The local property tax is misnamed. It is a home tax and a further burden on people who are already struggling and it should, of course, be abolished. I support the motion on that basis. It should never have been implemented in the first place. It is an absolute insult to homeowners struggling with hefty mortgages and people who have sacrificed all their lives to put a roof over their heads to find that taxation is being foisted on their shoulders when an alternative marginal increase in income tax on high earners could have yielded a similar amount of money. It is more insulting when one considers the sacrifices those people are making to pay the tax but that it will not be used to benefit local services. The dogs in the street know local services are under attack. Instead, this is a bondholders' tax.

We have listened to the Minister for the Environment, Community and Local Government, Deputy Hogan, and his Government colleagues bragging that they have brow-beaten people into registering for the tax. They may think they have convinced people but methinks they do protest too much. The tax is hated. The fact that the Government had to introduce such draconian legislation to brow-beat people into registering is proof not of its success but of its weakness. We do not know how many Mickey Mouses and Donald Ducks have registered for the tax but I would think it is quite a few. Many more registered who indicated that they will pay cash, but will not when it comes to the time. One way or another, people will resist this. The Government may succeed in squeezing it out of them in this way because of the Revenue Commissioners, but people will only end up failing to pay their mortgages and not being able to buy goods in the shops. The legacy of what the Government has robbed from them will be the price the Government will most definitely pay in the next election.

Deputy Joan Collins

I support the Bill to repeal the unfair family home tax legislation which should never have been enacted in the first place. Last year, more than 1 million households boycotted the household tax and thousands and thousands of households held off from registering until the very last minute, which is indicative of the opposition of ordinary people to the draconian legislation. It is not a wealth tax as the Labour Party has stated. Less than 2% of the revenue which will be collected will come from homes worth more than €1 million. People registered in anger, dismay, anxiety and distress. I had elderly people in my office who were crying as they asked what the hell was going on and why the Government was breaking them like this. The Minister for Finance, Deputy Noonan, says the public believes the tax is fair, to which I reply "codswallop". What is fair about draconian taxation that imposes penalties. if one cannot pay, of 4% simple interest? People were bullied and threatened and they could not afford not to pay. We saw the overvaluation of homes, issues with tax clearance certificates and the absence of an organised fight-back through the trade union movement, even though hundreds of thousands of workers put down motions at their conferences.

What is happening is exactly what we said would happen. VAT returns are already down by €250 million. I was in a local DID shop yesterday and was told that in January, February and March things seemed to be turning around whereas in the last three months trade has been as dead as a dodo. People are really getting frightened now as one sees when one talks to people on the ground. Tesco, which is one of the largest supermarket retailers in the country, has linked the fall in its sales of 3% directly to the announcement of the local property tax. This is a hated tax and this is a hated Government.

I will continue to oppose the family home tax. I agree with Deputy Pringle's point that it is well for Sinn Féin to come out and launch a national campaign to repeal the tax when it should have been out on the streets to oppose it before.

Deputy Seamus Healy

I support the Bill. The Taoiseach said "it is morally wrong, unjust and unfair to tax a person's home". He has reneged on that promise as he has reneged on many another policy during his period in government.

This is a form of double taxation as we have already paid these taxes. It pays no regard to ability to pay. As other speakers have said, not a single extra cent will go to local authorities for local authority services. In the last four years, more than €534 million has been taken out of local authority budgets. This is a rip-off to pay the banks and the bondholders. We know that because the Minister for the Environment, Community and Local Government himself has told us. Speaking in the House on 21 February 2013 on the Motor Vehicles (Duties and Licences) Bill, the Minister, Deputy Hogan, stated:

In 2012, €46.5 million of motor tax income was transferred from the local government fund to the Exchequer. This year, an amount of up to €150 million will be similarly transferred. These are necessary measures towards the reduction of the national debt.

Motor tax income is part of the local authority fund. We are paying banks and bondholders from the local government fund and replacing that fund with the hated local property tax.

Local authority tenants will also have to pay the tax through their rent and lower and middle-income families who own their house, even if it is in huge negative equity and mortgage arrears, are compelled to pay this tax. It is a shameful item of regressive legislation, introduced with the support of the Labour Party. It is certainly not a property tax, it is a family home tax and is called a property tax to attempt to fool the population. It is a hated tax and the public are waiting for the opportunity to give the Government parties a bloody nose. They will do so in the local and European elections in 2014.

The Labour Party has played a despicable role in this and I call on members of trade unions affiliated to the Labour Party to instruct their unions immediately to stop taking the political levy from contributions. This is a method of sending a strong message to the Labour Party.

Deputy Ciarán Lynch

This is nothing but a populist Bill with no credibility and it reflects the type of Darby O'Gill economics we have become used to from Sinn Féin. In the last budget, the Sinn Féin budget proposals were not costed by the Department of Finance, the first time in the history of the State an Opposition party has submitted proposals that were not costed. If this was a meaningful debate, we would discuss the legitimacy of property tax. It is bizarre that so-called left-wing Members of the House are opposed to the principle of property tax. They can argue about its construction and its progressiveness-----

Deputy Joan Collins

It is a family home tax.

Deputy Ciarán Lynch

-----and other matters but left-wing parties opposing the principle of a property tax beggars belief. In a meeting of the Joint Committee on Finance, Public Expenditure and Reform before Christmas, every economist from the left and the right spoke about the progressive nature of property tax as opposed to income tax. Even spokespersons invited before the committee by Sinn Féin agreed with the concept of a property tax.

The Labour Party has made a mistake on property tax and it made it in 1997. Back then, a property tax was introduced on the market value of houses over £101,000, which is what we were dealing in at the time. It equates to just under €130,000 today. A further requirement was an income in excess of £30,000, which equates to just under €40,000. The average industrial wage at the time was some €17,000, so this was a benign tax. However, following massive media pressure headed by Gay Byrne, which Fintan O'Toole referred to during the presidential campaign, the Government backed away from the tax. What a pity. The type of gatekeeping that would have been in place, if the tax had held, would have caused the abatement of the bubble. At the time, mortgages were issued at a ratio of 2:1 or 3:1 with regard to household income. If people had seen house values approaching €100,000 but wages remaining static, they would realise that something was wrong and that the property sector was getting out of control. In terms of normalising and managing a housing market, which is something the Government is doing through the insolvency legislation and other ways because of the need to have a housing market, the property tax is a critical part.

Who does the tax apply to? There are 1.6 million households in the country. Some 129,000 households are living in local authority houses, according to 2011 figures. Some 25,000 are in rent free accommodation, 15,000 are living in voluntary housing co-operatives, and 300,000 people are renting in the private sector. When talking about hardship, we are referring to the mortgage sector, people whose principal residence is their home. Some 1.1 million people are in that sector and the amazing thing is that half of the people who own their homes do not have a mortgage. In fact, they have not had a mortgage for years and the percentage is now greater than it was in 2011 because new mortgages have been at an all-time low since 2011 but people who entered mortgages in 1993 are now exiting. The proposal by Sinn Féin is not to tax people who can afford to pay a property tax. Half of the homeowners in the country do not have a mortgage and Sinn Féin does not want to tax them.

There is an issue of hardship and it is regrettable that the Bill did not look at equity and progressiveness. In that case we could talk about people in real difficulty rather than the approach of wiping the slate clean and finding €250 million elsewhere. That debate did not happen this evening and that is why we have Darby O'Gill politics coming from our colleagues in Sinn Féin.

The Fianna Fáil contribution last night was very interesting. It appears the Fianna Fáil finance spokesperson does not understand the deferral system. The deferral system is based on simple interest, so that people defer the sum and it runs for ten years. We are now arriving at the point where housing inflation is beginning to return. Even at a rate of 2.5%, if someone defers for ten years, the house will be worth more in ten years time than it is now and the sum deferred will be one third of the value added based on a 2.5% rate. It makes sense for an elderly person to defer because he or she is not leaving a debt but leaving an asset that acquires value at a modest rate of 2.5% over the next ten years.

Deputy Joan Collins

It is a family home.

Deputy Ciarán Lynch

That shows the nonsense of the proposal because the asset is being left to someone with a value. The person is not leaving behind debt but an asset that is increasing in value over the next ten years.

The goal is to get Ireland into a position of recovery. We have commenced work on it. One of the significant areas of the Irish economy that needs recovery is the normalisation of the housing market. We do not need a return to the days of boom and bust but a structured recovery built upon a sustainable model. Property tax is part of that and it is regrettable that Sinn Féin has taken this position. It did not even have the bottle to call for a boycott of the property tax. The earlier press release by Sinn Féin did not call for a boycott of the property tax because if it entered government, it would have to deliver on that promise and would not do so. I recommend the Bill is opposed in the strongest terms.

Deputy Anthony Lawlor

Let us talk about the chameleon known as Sinn Féin. Let us look at what the chameleon known as Sinn Féin is calling for, a repeal of the Act enacted last year. What about the five members of the chameleon known as Sinn Féin in the North of Ireland, who are members of the House of Commons? Have they ever tabled a Bill before the House of Commons looking for repeal of the district home tax in the North of Ireland? No.

Deputy Peadar Tóibín

We are abstentionists.

Deputy Anthony Lawlor

Let us look at what the chameleon known as Sinn Féin has done here with regard to councils. What have they asked council candidates for the next election to do? Council candidates will stand on the platform of reducing the local property tax rate in this country. What did the candidates for the chameleon known as Sinn Féin do in the 2011 election in the North? Did they mention they would reduce the district home tax in Northern Ireland, where they have control?

I would like to live in Castlereagh. It has the lowest district home tax in Northern Ireland because not one Sinn Féin member sits on the district council of Castlereagh. Where Sinn Féin has dominated, in places such as Newry, there has been a 50% increase in the value of the district home tax over the rate in Castlereagh.

Deputy Peadar Tóibín

Why does Deputy Anthony Lawlor not stand for election in Castlereagh? He would not get one vote.

Deputy Anthony Lawlor

The chameleon known as Sinn Féin operates on two levels. It does not tell the truth about what is going on down here.

Deputy Dara Murphy

Any well-run economy requires taxes to pay for its expenditure.

Deputy Peadar Tóibín

And emigration.

Deputy Dara Murphy

We have three of the main four types, including a tax on spending, VAT and excise; taxes on transactions, which have been severely hit because stamp duty receipts are a quarter of what they were in the boom; and a tax on work, namely, income tax. The Government has joined the well-run economies by broadening the tax base for the future and introducing a property tax targeted at providing community services.

I can tell the Minister of State at the Department of Finance, with regard to the measures already introduced, including the reduction in VAT, that there is a clear benefit in encouraging spending and domestic demand for the future, and hopefully for the near future, by continuing to reduce the tax on spending and, more importantly, by lowering the cost of work through reductions in income tax. However, in a time of crisis, income tax, VAT and excise can be changed up or down as an economy or people require. A property tax is a far more difficult thing to put in place. Notwithstanding the excellent compliance of people in this country, given that 90% have signed up, and while people want to pay as little tax as possible, there is an understanding that the reduction should come through taxes on work and spending.

I congratulate the people of our country on their intelligence and patriotism in seeing that this tax is an effort to recover our economic sovereignty in the short term and, in the long term, to establish a fair and broad tax base that is fit for purpose and that can adapt to the way an economy can fluctuate at any time. I reject the Bill and I question whether the so-called socialists have really looked at the ideological position.

Deputy Tony McLoughlin

Like many Deputies, I am amazed but not surprised that Sinn Féin has put a Bill to repeal the property tax before the House. It has been said on a number of occasions that Sinn Féin, in introducing this Bill, is speaking out of both sides of its mouth. Sinn Féin supported a property tax in Northern Ireland but vehemently opposes it in the South where, thankfully, the party is not in government.

The constant Sinn Féin rebuttal to this argument is that the property tax paid in Northern Ireland pays for school transport, refuse collection and some other school services, unlike here where none of these services is covered. That is true, and it is the message Sinn Féin is anxious to convey. However, the cost differential is enormous. In my constituency of Sligo-Leitrim, the average tax band is band 2, which is €224 in a full year. In County Fermanagh, the cost set out by the local council is £790, which is equivalent to €916. For the collection of refuse and the transportation of their children to school the good people of Fermanagh pay almost £700. The reality is that the property tax here is far less than the property tax in Northern Ireland which is defended by Sinn Féin.

The Taoiseach has constantly stated that this Government will not increase personal taxation or, as it is quite correctly described, tax on work. Clearly, this is the alternative. I oppose scrapping this tax, as is suggested. Clearly, we cannot return to the system of the 1980s, when I and many other people paid up to 65 pence in the pound in personal taxation. This country continues to run a current budget deficit of over €1 billion per month. The receipts from the LPT will ensure that the Government has a tax income that corresponds to our property prices, which may rise in prosperous times and remain low during difficult times for our people. This tax presents an opportunity for us to ensure that all users of our services, libraries and public amenities pay something, rather than almost always depending on the PAYE or self-employed sector.

Deputy Paul J. Connaughton

I am grateful for the opportunity to speak on this Bill. I agree with much of what Deputy Dara Murphy said in his contribution. When one considers the level of the deficit we faced when we came into Government, there were no easy choices. This certainly is not a popular tax, as has been stated. There is no point in saying otherwise. However, the decision was either to take this option or to increase income tax. As a commitment was given not to increase income tax, this is the option that had to be taken.

A number of people have approached me about the property tax over the last number of months. Instead of looking at what happened in the past, they are looking at what will happen in the future. People tell me that if they are going to pay a property tax that will go to their local authority, they want to see how it will be spent. Accountability in that regard will be very important. At present, local authorities simply cannot provide all the services they are required to provide. We must devise a transparent taxation system whereby we can point out to people where their taxes are being spent. The Government was correct to stay away from increasing income tax in so far as it could.

There is one matter among the concerns people have raised with me which we could examine in the next budget and, perhaps, tweak the system and make it fairer. I have been contacted by a number of people in estates in County Galway who are paying management fees. There is concern about that. Management companies have different levels of fee and some provide different services to the people who pay them. This is causing a great deal of anger, confusion and upset. People in those estates say they are getting as much as they can from the local authority. Perhaps we could work out a deal with them and their management companies to make it fair for them as well, because many of those people feel left out in this regard at present.

Deputy Michelle Mulherin

I do not wish to rehash the reasons we are in a situation that requires a property tax. Who wants to have a property tax? Who wants to impose rates on people and so forth? We should park those arguments. We had them not so long ago and we spent a long time talking about it. Tonight, we are spending more time on it.

Are we being asked to suspend reality here? The Chair has asked us to speak on the Bill, but the Bill is two pages in length. It states that we will cancel what has happened previously, because that is the populist thing to do, but what happens then? We have gone through the Bill. There is nothing constructive in it. I do not believe this is constructive opposition or that it contains anything to address the issues facing people. In fact, the more than 80% of people who have paid their property tax to date see that this Bill is a load of whitewash. It is catering only to a certain element of people - not all people - who do not want to pay for anything and do not think that anybody should have to pay for anything. However, that is not how things work.

What is being created in this Bill is something fantastical, as if we will suddenly change our minds. It is absolutely ridiculous. It is in the same vein as a previous Private Members' motion from Sinn Féin which sought to create a stimulus package that would spend the pension reserve once again and which contained another proposal to approach the European Investment Bank. The same party said we should not have paid the promissory notes. It has no credibility whatsoever. It is what I call the republic of fantasyland. That is all Sinn Féin proposes when economics are involved. I urge people not to go near it unless the party can come up with something a little more constructive.

In that context, there are many compliant people who do not like the tax but who understand the requirement for balancing books and understand that the tax must be levied in that spirit. The people who have paid their tax are apprehensive about one thing and that is the value of their property. They are apprehensive because they do not know if they are competent to value it. Who can value property at present, given the way things are? My request is that people who have valued their property and complied with the notice of estimate provided to them in their region will be afforded the comfort of knowing that they will not be audited or investigated by the Revenue Commissioners for the next three years until property prices recover and the country gets into a better position.

Deputy Paudie Coffey

I am glad to have the opportunity to contribute to this debate. Regardless of whether we like it, the property tax is needed to maintain essential local services in our communities. This Bill is an opportunistic, populist move by the Opposition. The same Opposition regularly calls for improved services in every local authority in the country and insists on more funding for communities in those same local authority areas, with no regard for where the money will come from or how it is raised. This is not the political leadership or responsibility that is required in this country at present. It is just scaremongering, peddling misinformation and encouraging people not to pay taxes that are passed by the democratic institutions of this State.

Fianna Fáil, the party that ran our economy onto the rocks, signed up for a property tax as part of the bailout terms it agreed with the troika. Now it is doing a U-turn for populist reasons. It is vote-gathering in a disingenuous way. Sinn Féin opposed the household charge and now opposes the property tax but in its so-called alternative budgets it did not make provision for the resulting shortfall of over €160 million.

Deputy Peadar Tóibín

We did.

Deputy Paudie Coffey

How would it pay for local services? It does not tell us. This is the great economic black hole that Sinn Féin has created. In the North it is happy to collect an average of £1,000 per household for spending on local services.

Of course, Sinn Féin points the finger of blame up there at Westminster, while here it points it at the Irish Government. The party always puts it on the other hand and the other finger. This is real populism at its very worst. Regarding the Independents and the independent socialists, I always thought that socialism promoted and supported the idea of progressive taxation, but not the unique group that we have, the motley crew in Dáil Éireann. They, and indeed Sinn Féin representatives, went around this country encouraging people, at marches and public meetings, not to pay the household charge.

Deputy Sandra McLellan

We did not do that.

Deputy Paudie Coffey

What was the result? They were competing with each other. Sinn Féin was competing with the independent socialists, going into communities and telling people not to pay their taxes. Where are they now, when those people have to pay more? They have codded the people and now they have deserted them. That is what Sinn Féin was doing - going around the country, cod acting and leading people astray.

Deputy Peadar Tóibín

Earth to cuckoo land.

Deputy Paudie Coffey

That is the ill-judged, populist politics in which Sinn Féin is engaging.

Acting Chairman ( Seán Kenny)

The Deputy is over time.

Deputy Paudie Coffey

The Sinn Féin Deputies come back in here and table parliamentary questions to Ministers in this House, encourage their local authority members to demand and insist on services and so forth, but they never demand to know where the money will come from.

Acting Chairman (Deputy Seán Kenny)

The Deputy must conclude.

Deputy Paudie Coffey

That is the populism and the lack of leadership that Sinn Féin has and always will have.

Deputy Peadar Tóibín

That was a fact-free contribution.

Deputy Mary Mitchell O'Connor

On a quieter note, Deputy Doherty seems to have overlooked the fact that this property tax was voted for in here, in this Chamber, democratically only a few months ago. Why is the Deputy wasting our time putting forward such a Bill at all? It would be great-----

Deputy Peadar Tóibín

The Deputy should ask her constituents.

Deputy Mary Mitchell O'Connor

I will answer that point shortly. It would be great if we could get on with more pertinent matters such as-----

Deputy Aengus Ó Snodaigh

We could go on about private schools, for example, as the Deputy did yesterday.

Deputy Mary Mitchell O'Connor

-----how the taxes are returned to the constituencies. Dún Laoghaire constituency had one of the highest compliance rates for the household charge at 89%. By comparison, Donegal, represented by Deputy Doherty, had the lowest rate of compliance, at 65.8%. It is unthinkable for my constituents to be forced to subsidise Deputy Doherty's flock.

Deputy Aengus Ó Snodaigh

We have been subsidising the private schools in Deputy Mitchell O'Connor's constituency for long enough. The Deputy was crowing about them yesterday.

Deputy Mary Mitchell O'Connor

I will be insisting that 79% to 80% of the constituency's moneys be returned to Dún Laoghaire, to match the compliance rate. The distribution of local authority funds must be fair and proportionate to revenues collected. I will not countenance some counties paying for everything while others pay for nothing. As my constituents in Dún Laoghaire are paying huge property taxes-----

Deputy Aengus Ó Snodaigh

The constituents of Dún Laoghaire are some of the wealthiest in the country, is that not so?

Deputy Mary Mitchell O'Connor

-----I will be seeking a further lowering of parking charges and commercial rates as a result of this money reverting back to the constituency. At a small-business meeting in Dún Laoghaire last week, the resounding cry from the SME representatives and traders present was that commercial rates were killing their business. This cannot continue. If Dún Laoghaire pays the most, then by God, they will get the most back to fund their roads, cemeteries, parks and so forth. Unlike Deputy Doherty, who is not in the Chamber at the moment, we in Government are more concerned with how we can improve this country rather than wasting time. If the Deputy had any real and relevant solutions as to how he would improve the country, I would love to hear them. He should stop wasting time, stop being populist and stop his antics.

Deputy Peter Fitzpatrick

A property tax is necessary to restore our public finances. We cannot continue to spend more money than we raise in taxes. We are borrowing approximately €1 billion per month and we still have to reduce the general Government deficit to below 3% of GDP by 2015. A property tax is a responsible way to reduce this deficit. The OECD commission on taxation and the ESRI agree that a property tax is less harmful for the economy than other forms of tax. It is a tax on assets rather than employment and, therefore, will not negatively affect job creation. The rate of the property tax will not be increased in the rest of the term of this Government, after it becomes fully operative in 2014. The Government property tax is fair and progressive, as more expensive properties are liable to more tax in cash terms. This is because the tax is a percentage charge of 0.18% of the value of the property. A further progressive feature is the higher rate for houses worth €1 million or more, which are liable to a rate of tax of 0.25%. This higher rate allows for a lower standard rate for everybody else.

A property tax is a form of wealth tax. Property is the main form of wealth for most people in this country and the best one to tax, as property cannot be moved abroad. A system of voluntary deferral arrangements for owner-occupiers will be implemented for cases where there is an inability to pay, where gross income does not exceed €15,000 for a single person and €25,000 for a couple. For income-stressed owner-occupiers who have an outstanding mortgage, an adjustment to gross income will apply such that 80% of the mortgage interest can be subtracted from gross income in determining an inability to pay. There are some exemptions from the LPT such as for houses in unfinished estates. There is also a three-year exemption from property tax for buyers of new homes and first-time buyers.

Sinn Féin's opposition to a property tax in the South does not appear to be shared in the North. While sitting in government in Northern Ireland, Sinn Féin agreed to an increase in household rates of over 10% from 2011 to 2014. This is on top of the existing high levels of tax. A house worth £200,000 in Derry is liable to household rates of over £1,500 per annum. Fianna Fáil would keep the household charge which this Government's property tax replaces. Therefore, Fianna Fáil would actually have a property tax but it favours a flat rate where everyone pays the same amount regardless of the value of the house.

Deputy Áine Collins

I welcome the opportunity to speak on this Bill. No one here wants to increase the tax burden for anyone. All of us would like to be in a position to improve the lives of our constituents. All politicians want to be in a position of announcing and implementing good news again for our constituents. However, some of us live in the real world and we have seen many examples of irresponsible attitudes in politics in the past. These have landed our country, our people and many of our families in an awful mess. Sometimes it is easy for us to forget that just two and a half years ago there was a real possibility that we would run out of money. There was a huge concern about how we would pay for essentials like social welfare payments and salaries for public servants such as nurses, doctors, teachers and gardaí. The money we needed to support our health and education services was under threat. We needed new taxation measures to raise revenue. Unpopular measures were needed in order to maintain basic services. This Government has had the courage to implement these measures and we have restored the financial integrity of the State by doing so.

It is internationally accepted that a property tax is one of the fairest and most effective ways of raising revenue. However, doing what is right is not always popular. It will cost the parties which implement such measures dearly in popularity terms. This Government is simply putting the country and our people first. There is no easy political gain in any of this. However, this Private Member's motion from Sinn Féin is nothing more than political expediency. Sinn Féin constantly tells us that it accepts the figure for the overall fiscal adjustment that is needed but it knocks every measure proposed by the Government to meet the adjustment targets. We must have a sustainable balance between our income and our expenditure, like any good household.

We have come a long way over the last three years. We can provide services, while at the same time sowing the seeds of recovery in our economy. That is exactly what is happening. It is wonderful to see that unemployment is finally decreasing - this is the fourth successive quarter in which the numbers are falling. I personally would like to thank the 80% of Irish householders who have paid their property tax to date.

Minister of State at the Department of Finance (Deputy Brian Hayes)

I will start by taking up the point just made by Deputy Collins. On my behalf and that of the Government, I wish to thank the Irish people for their extraordinary patience and compliance. Had anyone suggested at the introduction of this new tax that we would obtain a compliance rate of about 90% within a short number of months, he or she would not have been believed. That is an extraordinary sign of the compliance and the support of the people for this Government. They know the direction in which we want to go. Shouting, roaring and screaming about things will not solve our problems.

Deputy Brian Stanley

Hear, hear.

Deputy Brian Hayes

As a society, a Government and a people, we need to chart a way forward. The point has already been made about the need to have a sustainable tax base. In that context, we should not forget one simple statistic. Under Fianna Fáil, in a 12 month period in 2008, tax revenues went from €51 billion to €37 billion. They collapsed because of the collapse of the property market. The task of this Government or indeed any Government, even one involving the Communist Party of Ireland or Sinn Féin, is relatively simple.

The task of the Government is to broaden the tax base and take in more taxes. In reducing the deficit we are doing that.

Any party, including Sinn Féin, whatever about the nonsense of the debate yesterday and today, which proposes the abolition of a property tax will be laughed out of court. This country needs to move away from its obsession with the taxation of income and work. We still have 1.8 million people working in our economy, rather than the 2 million at the top of the boom. The best way to keep those people at work and create the conditions for more people to enter the labour market on a sustainable basis is not to increase tax on work.

We already have tax on work of approximately 52%, comprising a 41% basic top rate and 11% between USC and PRSI, on quite small amounts of income, namely, anything over €32,500. Are we seriously suggesting that we can create a jobs rich economy by continuing to tax the hell out of people which, ultimately, is the Sinn Féin proposal? It is inevitable that we have to have a property tax and that it will be part and parcel of our taxation system into the future if people are honest.

The Deputies opposite claim some of my colleagues never read their documents. I read them very closely and keep a very close eye on what they have to say. I would like to talk about what they have to say because it is the nub of the debate. The Deputies opposite should answer three simple questions.

At his Ard-Fheis, Deputy Doherty proposed the abolition of USC. Is that still the position of Sinn Féin? If it is, it will have to find another €985 million to make sure the figures stack up. Of course it will not do that. We need to hear whether that is still its position. Is it still its position to reduce VAT, which we had to increase from 21% to 23%? If it is, it will have to find another €500 million. Sinn Féin would be €1.5 billion in deficit, irrespective of what it would do about wealth tax.

On 12 November last Deputy Doherty published an explanatory memorandum rather than proposed legislation. Today I asked the Bills Office for a copy of his wealth tax Bill and was told it did not have it because there are no details. It is just a speech which can be transposed and says a wealth tax will solve all our problems. On 12 November last Deputy Doherty told us: "It is our intention to table a Private Members' motion on the issue at the soonest opportunity." Let us have it now.

When Sinn Féin produces its pre-budget submission it does not start from what it said the previous year, rather, it starts from the hard measures the Deputies on this side of the House advocate and back which it then opposes. It does not compensate for that in its pre-budget submission the following year. At the heart of the Sinn Féin alternative is a fundamental lie. It knows it, we know it and the country knows it. That is why it is going down in the polls and why the comeback for Sinn Féin is nowhere near.

Deputy Pat Deering

I am delighted to have the opportunity to speak. The reason we have a property tax is because the economy has collapsed and we need to broaden our tax base. The problem began in 1977 when, for cheap political reasons, Fianna Fáil abolished rates. Sinn Féin proposes them in the North on a regular basis and is afraid to reduce them.

What Sinn Féin proposes is quite simple. Repealing the property tax and repaying the money, which has been paid by the generous people of this country at a substantial rate, would mean we would automatically, as Deputy McGrath said, need an emergency budget to find an extraordinary amount of money. I listened to the leader of Sinn Féin this morning, Deputy Adams, speaking about cuts to respite care, carers and so on. There would be even more serious cuts in those areas if we paid back the money that has been collected. We need a solid base to have fairness in society.

There has been ongoing reluctance of on the part of Opposition parties to buy into this position. Sinn Féin was initially reluctant to get involved but some of its members suggested they would not pay and provided a lot of misinformation. An extra €7 million in penalties have been paid by the decent people of the country as a result of that cheap political stunt.

The people of Donegal, Deputy Doherty's area, have paid €337,000 in penalties so far. The people in Meath, Deputy Tóibín's county, have paid €236,000 in penalties so far. The people in my county have paid €100,000 as a result of Sinn Féin's misinformation. That is the result of the cheap political stunt Sinn Féin has proposed time and again.

Yet again, its hypocrisy knows no bounds. It is not afraid to go up to the North and propose rates of up to £1,500 on average per house. The tax in the South is a fraction of that. All we have are cheap political stunts.

Deputy Brian Stanley

Sinn Féin never advocated a no pay campaign. We were very scrupulous about that. It is another lie which needs to be nailed, along with others I heard in the past 15 minutes.

Deputy Deering obviously has a problem with the truth. We have actively campaigned against the tax and offered costed, reasonable alternatives. If we fail in our endeavours today we will continue to campaign against this tax at every opportunity. We have given a commitment that if we are ever in government we will repeal it.

To put the family home tax into context, Fianna Fáil came up with the bright idea of taxing people's homes, regardless of ability to pay. In its national recovery plan 2011 to 2014 it committed itself to an interim site value tax of €100. Page 92 stated Fianna Fáil's national recovery plan would introduce an interim site value tax in 2012, applicable to all land other than agricultural land and land subject to commercial rates. The interim measure would involve a fixed local service contribution of about €100. The final site value tax would be introduced in 2013 when valuations were completed.

It goes on to commit Fianna Fáil to doubling the tax at an average of just over €200 per dwelling or site which would raise €530 million. It is roughly the same as what the Minister, his party and the Labour Party are doing in government. I raise this issue to remind the public that there is no difference between the coalition of Fine Gael, the Labour Party and Fianna Fáil on this issue. If one votes for one of them one gets them all.

There is some confusion in the coalition. Fianna Fáil was in favour of the property tax but no longer is. Fine Gael was against it but now supports it. The Labour Party flip-flopped all over the place but the Tánaiste, Deputy Gilmore, told us three years ago it would be perverse to tax people's homes. Now it is doing that in government. Any crocodile tears from Fianna Fáil are opportunism. In power it too would champion the family home tax.

Not only is the tax an attack on low-income families, it also serves to undermine local democracy. Local authorities raise almost 60% of their funding, but the Government has continued to slash funding. The public pay motor tax to fund local services, in particular roads, but the Government grabbed €150 million to pay debts. Households will not receive one extra service from the tax. People pay income taxes, motor tax and local authority charges.

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.

Dáil Éireann díospóireacht - Wednesday, 12 Jun 2013

Finance (Local Property Tax Repeal) Bill 2013 [Private Members]: Second Stage (Resumed)

Dáil Éireann díospóireacht -
Wednesday, 12 Jun 2013