Martin Mansergh (Tipperary South, Fianna Fail)

I agree with my colleague, Deputy Finneran. One of the purposes of this legislation is to put the stamp duty issue to bed and end the uncertainty and instability surrounding it. Anything else that may be done from time to time can be done in a budgetary context, thus taking stamp duty out of the realm of speculation. I found the picture painted by Deputy Shatter, of a modest home worth €950,000 owned by an elderly couple, to be absolutely surreal. Perhaps they were there for 20 or 30 years and may have paid £9,000, £19,000 or £29,000 for that modest home. Enormous capital gains have been made by people who own homes in the Dublin area and elsewhere. In some cases, the value of homes has appreciated by several thousand percent over 20 or 30 years. The argument is now being proposed that people who have made such gains and are trading down, should not pay a relatively small amount in tax to support social welfare services. I do not know where equity has gone in the argument over stamp duty. I have not seen any of the groups or agencies concerned with poverty issues talking about this matter. In any case, that particular suggestion is somewhat removed from Deputy Burton's amendment. The giveaway word in that amendment is "affordable", which is what the buyer can afford. It is well known that if buyers do not have to pay stamp duty they can afford more. That is why very often, unfortunately, well meant concessions have the effect of driving up prices, so one ends up paying as much but with the difference that the State does not get the benefit.

We need to pay some attention to the tax base. We have been running healthy public finances and have had a reasonable surplus in recent times, but we must be careful not to erode the tax base. Twenty years ago, I can remember the Labour Party bemoaning the lack of proper capital or corporation tax revenue. Under both those headings, revenues have now increased exponentially. In the case of corporation tax it is because of prosperity, investment and bringing the rate down to 12.5%, which made it worthwhile to do business in this country. I accept the Labour Party was also involved in this. In 1986, revenue from capital taxation was approximately £36 million, while corporation tax accounted for about £257 million. Revenue from those sources has increased enormously, however, which has enabled us to do a whole lot more. Therefore, the Labour Party in particular should think carefully about how much it wants to erode the capital tax base.

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