Dr. Seán Healy:

It is important to understand where we are coming from in all of this. For much longer than a decade, since before the recession hit us in 2008, we have been arguing about the tax base, and Deputy Higgins is well familiar with our arguments. We were very conscious of the fact that the tax base was being narrowed which made the tax take very vulnerable if anything happened.

Since 2001 we have clearly indicated, in print and in meetings with politicians up to and including the Taoiseach of the day, that the amount of houses being built was in excess of what was required. We used the phrase, "You did not need to be Einstein to know that there would come a day when we would have to stop building too many houses" because there was more than enough to keep us going. Consequently, the Government's tax take was extremely vulnerable because there was too much emphasis placed on transaction taxes. Then Social Inclusion Ireland reached the sensible conclusion that it was best to substantially increase the tax take from fixed assets or wealth in one way or another and thus property became part of that. We opted for a site value tax because we thought it was more likely to work, more effective and more equitable.

I shall deal with the equity side. A high value was placed on land in urban areas but much of that was tied to the social and economic investment that was paid for by taxpayers. That being the case then there should be a payment given back to all taxpayers, and not just the taxpayers living in the area, from what had been provided in the area at taxpayer's expense. We then concluded that site values was a better way to go. It can be argued that a substantial portion of the benefit of the land value should be enjoyed by all of the members of the community, not just the owner of a particular property. An increase in site values is linked to the investment in infrastructure in the area and much of that was paid for by taxpayers. Therefore, it can be argued that a substantial portion of the benefit gained by an increasing site value should go to the whole community through the tax system. That is why we opted for this approach rather than house values.