Mick Wallace (Wexford, Independent) | Oireachtas source

The Deputy might as well have said it.

So many things have been said on the many occasions on which we have spoken about the property tax and household charges that it is difficult to find something new to say. The basic principle remains the same. This is an unfair tax at this particular time. One of the Government's strongest arguments has been that as they pay property tax in Europe, we should pay it here. We are all well aware, however, that no one ever paid stamp duty on a primary residence in Europe, whereas they have here. Even someone who paid €200,000 for a house here paid €12,000 in stamp duty given the rate charged of 6%. When one adds that to a 20-year mortgage, it becomes €25,000 or €1,000 per annum through the life of one's mortgage. That is a property tax and it is disingenuous to say that we do not pay such a tax here. We pay a great deal. Anyone who had the pleasure of buying a house in Ireland during the last 20 years paid a great deal more tax than his or her European counterpart. If one bought a house in Ireland for €300,000, the relevant stamp duty was €18,000 exclusive of mortgage interest. Of the €300,000 the builder received, he had to hand over €165,000 to the State in direct and indirect forms, including stamp duty, PAYE, VAT on materials and VAT on subcontracted labour. When close to 60% of the money went to the State, it beggars belief that the State considers that it is now due an extra tax on the property.

If someone had said to me ten or even five years ago that we would introduce a property tax, I would have agreed that anyone who had not paid stamp duty and could afford the charge should pay. Given the dire place so many are in today, ability to pay is a serious consideration. Before one imposes a tax on someone, his or her ability to pay must be considered. It is what we do with income tax. Income tax is a form of direct taxation that is based on ability to pay. The more one earns, the more one pays, which is fair enough. I believe income tax should be higher here, as it is in the Nordic countries where better welfare systems exist. They have higher levels of services because they collect money at source from those who can afford it. It was disappointing in the last budget that the coalition did not see fit to increase income tax on incomes above €100,000. It is very hard to argue that it would be unfair to charge a higher marginal rate only on what one earns over €100,000. Most fair-minded citizens would have seen that as a progressive move.

There has been a growing level of inequality. In the last five years, the those who were best off hardly knew what austerity meant. I do not know if they can even spell it. It has not affected them at all and in fact their wealth has increased. Over half the people of Ireland are in a very difficult place and I am not sure the Government is aware of that. It takes actions that indicate that it has not taken that into consideration. I was at a briefing on Wednesday with former IBRC workers. It was frightening to listen to them. Of the five who attended, two of them cried. They do not know how they are going to deal with household bills or whether they can look after their families. We are not talking about people who were making crazy money. I was shocked to hear that the average salary in IBRC was €46,000, despite the fact that five of its employees were making more than €500,000, which was mad. The average wage of those laid off was €46,000, which is of a much lower order than the average wage in Anglo Irish Bank when it fell or AIB today. These people signed an agreement only two years ago on their work terms and redundancy when the company would be wound up, but it was liquidated overnight.

I understand how business works and that if one's business is liquidated or a company becomes insolvent one simply gets two weeks' redundancy payment. The perpetrator in this case is the State. The Government has its own reasons for doing this and I am not saying it should not have done it but it has an obligation to look after these people. They do not have a hope of paying property tax, like many others. The Minister needs to take another look at it, given that if a company goes out of business a liquidator comes in and becomes the controller. He makes the decisions as he sees fit and follows the rules and regulations that exist. That is the way it is and we have to take it on the chin. In this case the Government is the parent company of IBRC and it continues to trade. The Government needs to address its obligation there.

At least 60% of the people will struggle to pay this tax. The fact that so many are in a difficult place makes it difficult to take what is happening with the banks. It is so unfair. What is happening here is happening in other European countries. The problems are not particular to here because we live in a globalised society and the philosophies being implemented here are being implemented in other areas as well.

See this speech in context