Sean Barrett (Independent) | Oireachtas source

I welcome the Minister of State. Pyrite was a problem in Canada, as well as in Ireland. We gave some papers to the then Minister, Mr. Hogan, when he was dealing with the issue. What happened was that builders there sued the quarries that h ad supplied them with the defective materials to build houses. That is how the money was recouped. I do not know how the State became involved in dealing with what was a failure in the construction industry. Let us examine this issue in order that, next time round, if people supply faulty building materials to builders, it will be a matter between the builders and quarry companies. That is how the problem was handled in Canada.

I support the freeze the Minister has provided for. However, we have to be careful, particularly given the way it is being presented in some places. Ireland was not a collection of tax dodgers until 2008; in fact, we were running the country with a surplus and the debt-to-GDP ratio was 25%. However, we needed to beware what was happening in banking which led us to the problems encountered. The Government wants to broaden the tax base. My favourites in broadening the tax base would be having a low rate of corporate taxation, with no deductions and no allowances, in order to tackle inversion and all such things. For very rich people, that is how the personal tax system works also. Let us put out of business the tax lawyers and accountants and let us have a rate of tax that would be paid by everybody, as happens in the case of those in the PAYE system.

Would I choose to tax property to the extent some advocate? The answer is no for the simple reason that in our lifetimes we have seen house prices go from two and a half times to 12 times people's incomes at their peak. They are probably back to about six times their incomes now. Senator Aideen Hayden is one of the experts in the House on these matters and knows that that figure is very high by OECD standards. The Government is choosing part of the tax base that will drive people into serious income difficulties because property prices are rising so rapidly. That suits the Department of Finance, of course, but we speak on behalf of citizens, not on behalf of those whose job it is to collect revenues.

Development levies were supposed to be set aside, but they have not been. An annual payment was supposed to replace development levies, which income source was supposed to be insecure, yet they seem to be as large as ever. No credit was given to those who had paid their property taxes in a lump sum at the point of purchase when we were designing the local property tax which is not that closely related to people's incomes. If somebody wins the lotto and decides to buy a house in a neighbourhood, none of the other people living in it will have won the lotto, but the purchase price paid could set the market price which would not reflect the incomes of others.

The local property tax also does not reflect the incomes of people when they retire. People buy a house in which to live. The fixation we have with assets in Ireland, including seeing asset price as part of the tax base, is misplaced. That the local property tax is not related to income, to the fact that people get old, that others buy houses in a neighbourhood at inflated prices or that bankers could go crazy again, as they did in the past, means it has no strong relation with ability to pay.

I support the Minister of State in catering for people with disabilities. This is most important and he has my support in that regard. The freeze is also good.

With regard to the pyrite exemption, let us look at the other route. Why should taxpayers bail out quarries and builders? For what is house insurance supposed to be? Why does the private sector not take the risk?

There should not be too many property taxes because of the in-built deficiencies. The local property tax receive a great accolade from the wing in the Department of Finance that loves collecting taxes and which has been very successful at it, as we have seen in recent years. However, it has to be related to ability to pay and that relationship is somewhat tenuous at present.