Eoin Ó Broin (Dublin Mid West, Sinn Fein) | Oireachtas source

I thank Councillor McGinley for the very detailed presentation and documentation supplied. I shall make a comment rather than put a question. There are occasions when something is so badly designed and so unfit for purpose that trying to tinker around the edges will not solve the fundamental problem. I am as convinced today as I was when this tax was first introduced that the LPT is not fit for purpose and it needs to be scrapped. We need to go back to the drawing board for a more appropriate way of funding local government services.

There is much misperception in the public and media debates about the local property tax. It is important to restate the reasons why some of us are very opposed to it in principle. The idea of a charge that pays no attention to ability to pay is wrong. The councillors have already cited the people who are asset rich and income poor, especially older people or pensioners with larger properties in more affluent parts of the city, who might be on very small occupational pensions. Any reform of local government taxation that does not take into account the ability to pay will not work.

While there are fewer people now in negative equity than when this tax was introduced, the tax is on debt as well as on an asset. I am not aware of anywhere else in the world where a property tax taxes debt. Any reform of any reasonable property tax would have to take that into account in a way that this LPT does not.

There are small features of the tax that some people do not realise. Households whose incomes are too low to pay the charge may defer the tax, but they are charged an additional 4% annually. This is bizarre. I am sure that all members are aware of cases, usually of older people or people who are just above the income thresholds, that simply cannot pay the tax. Their deferred payment is mounting up and accumulating the 4% debt annually.

I have huge sympathy for the councillors. I sat on South Dublin County Council when we had to deal with this and we lost euro for euro. For every euro in local property tax that was generated the council lost a euro in central government funding. At a time when people were paying more for their local services, and therefore expecting more from the council and the councillors, they were getting exactly the same services or less, depending on how the fund worked out. That has created huge resentment and anger among the local public directed towards councillors and council officials and staff, when it is not actually the responsibility or the fault of those people.

Fundamentally, the LPT was not introduced as a tax to try to fund or improve the financing of local government. This was not the purpose of the LPT. This tax was introduced at the time to assist the Government in closing its fiscal deficit. For all of those reasons it would be my preference to draw a line in the sand to say the tax does not work. We need an honest conversation about funding local government. If we continue to be solely reliant on or simply revert to 100% central government funding and grants for housing and roads supplemented by business rates, this is not a good model either. I am a little worried, not by the councillors' presentations, but by the Government just having a review of the local property tax. It is stopping us from having the bigger discussion around the longer term funding. I lived in Belfast for 11 years, and while I am not saying its rates system is perfect at least people there can see a broad range or basket of regional and local services that they get for the tax that they pay. This aspect needs to be reformed.

I have huge sympathy with the council. We need to return to this issue in our programme at a later stage. I am, however as convinced as I was before that the LPT is not reformable, it needs to be scrapped and we need to start over again.