Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

I welcome the opportunity to tease out the principles and options we face in respect of this issue. Deputy Kyne stated that the proposed tax will provide a stable form of revenue. I am sure Deputy Mathews, who is a good man with figures, will agree that if we had levied property taxes based on market prices at the height of the boom the revenue derived from it would be two to three times greater than the amount that could be taken this or next year. Property prices have, of course, collapsed. The idea that the tax as formulated by the Government is somehow more immune to the variations of the economy than any other tax is rubbish. As currently proposed, it will be totally cyclical and as the market for houses improves, the revenue from it will increase, but if the market collapses in the future, it will collapse.

The collapse in revenue on the capital tax was relatively small. If that was all that we had lost we would not have a problem. The collapse in the big three of PAYE, PRSI and VAT receipts caused the wider crisis in the public finances. Other taxes in which there was a percentage collapse may be more easily identified as connected to the collapse but the loss of income to the State was from the big three.

This tax will be equally cyclical. Therefore, there is no benefit in having the wider basket of taxes if what the Minister is trying to do is create stable sources of income. The difference between this tax and rates is that the rates tax was largely immune to the cycle because it was purely the choice of those setting it.

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