Phil Hogan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

The development of a system of local government funding which is fair, stable, effective and brings greater local responsibility in financial matters is an essential feature of the reform programme for local government. Consistent with the overall local government reform process and as stated in chapter 10 of the action plan for effective local government entitled, Putting People First, the Government is committed to the introduction of a local property tax, with provision for an appropriate element of local authority financial responsibility to underpin local democratic decision-making. Beyond that principle, no decisions have been taken and it would not be appropriate to discuss such matters prior to the Government's consideration of the matter.

I can state, however, that the local property tax will improve the governance of local authorities by strengthening their accountability to local taxpayers. A local property tax will alter the relationship between the citizen and his or her local authority in a way that will be altogether beneficial for good governance. The action plan noted that if local elected members have relatively little responsibility for raising revenue, their rigorousness in prioritising its allocation, ensuring its efficient use and stewardship and overseeing the performance and management of local authority operations generally is likely to be diminished.

An independently chaired interdepartmental expert group was established to consider the structures and modalities of a local property tax to replace the household charge. The group's terms of reference were to consider the design of an equitable tax to be approved by the Government to replace the household charge, which would be informed by previous work and international experience. The group submitted its report to me and proposals will be brought to the Government as soon as possible. I do not propose to comment on the content of the expert group's report at this point, pending the Government's consideration of the report and the associated issues. Then it will be a matter for the Government to decide on the exact details of implementation, including considerations related to local determination of the value of the property tax, taking into account the modalities involved. The Government has decided that the local property tax will be collected and administered by the Revenue Commissioners.

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