Shane Ross (Dublin South, Independent) | Oireachtas source

It is one which the tax has provoked. The problem is that many Members on the Minister's side recognise that this is a fundamentally flawed tax in itself but it is utterly wrong at this time, as Deputy Olivia Mitchell said today, and I hate to use her as a thorn in the Minister's side, although she is fundamentally in favour of the tax.

It is very difficult to get money out of an asset which is yielding nothing and in many cases it is actually impossible because in the present market conditions one cannot sell a house, or if one can, one sells at rock bottom prices. People will be caught by this tax who simply do not have any money. They have an asset and the Minister is trying to get money out of an asset which does not yield anything. That does not make sense in the present circumstances.

I understand the pressure the Minister is under to deal with this but the problem is that property is the commodity which above all others caused the financial crisis we are in. The price of property is massively volatile. It is hugely unpredictable and there is certain to be social disruption if the Minister starts to tax something in that category from which people cannot actually extract liquidity. Property continues to be a major and unpredictable problem and commodity. That is why there are so many anomalies and complaints about the situation here and so many groups of people who say quite rightly that it is unfair because the price of their house and their financial and social condition has changed so much during this period due simply to one asset, the home in which they live. Their circumstances have changed so much due to the change in property prices that it is inappropriate to start taxing it. The Government did not recognise this. It said "Oh this is a commodity, which is out there, it is broadening the tax base" - whatever that means, I do not think it is - "we will tax it." One cannot really do that because there is no consistency attached to the kind of valuations we are making. The Minister and anybody involved in the property business knows that it is impossible to value houses accurately at the moment. The market, if it is there, is moving far too fast. There is very little consistency in it and in many cases one cannot sell a house. In theory houses are worth virtually nothing. If one cannot sell something it is not worth an awful lot and one cannot raise liquidity from it to pay this tax.

The other problem which this will exacerbate is also deeply property-related, the problem of mortgage arrears. The Minister has spoken about this, as has the Governor of the Central Bank, very eloquently. We have not solved the problem of mortgage arrears. At the moment there is no obvious solution. We get a great volume of suggested solutions, personal insolvency Bills and suggestions that the banks are going to get powers to repossess which will create an even larger problem in the property market. This is worth addressing because if the banks start repossessing properties this year which I gather they will, under new legislation about to come before this House, we will have an even bigger property problem because more properties will be forced onto the market which will bring the price of property down.

I am interested in the Minister's view on this. It is a prediction and one that makes sense.

The Minister acknowledged in his speech that there were people who will get into serious difficulties. Those who cannot pay their property tax and who refuse to return their forms and, as a result, refuse to pay, will have the liability confiscated from their pay or social welfare. They will then be faced with a dilemma about what to do about the gap in their wages. What will they do when the Revenue Commissioners have made an attachment order against their bank accounts? What will they do if they are on social welfare and the money is taken out of their benefits? I know - and so does the Minister - what they will do. They will not pay their mortgages. It is obvious that that is the only option left open to them. In the present circumstances, in which 140,000 people are not paying their mortgages or are in arrears of one sort or another, there is some sort of safety in those numbers. One of the consequences of the financial crisis we are in, for which I blame the banks and not the Government, is that people now regard paying a mortgage as an optional extra. When people have their property tax liability - which will be substantial next year, if not this year - taken out of their wages, they will opt for not paying their mortgages. The problem will come around the other way and we will get more problems with mortgage arrears. I do not know what we are going to do about that because it is a circular movement and, one way or the other, the same people will be hit.

Earlier, Deputy Donohoe referred to the recent meeting of the Committee of Public Accounts with the head of the Revenue Commissioners, Ms Feehily. She was very eloquent, engaging and enlightening but, by God, was she scary. She put the fear of God into us all at the committee when she told us what she was going to do to us if we did not pay the property tax. She told the committee that the Revenue Commissioners would be utterly and totally ruthless about collecting this tax. This will damage the Revenue Commissioners by portraying them again as confiscators, as tyrants, as people who make attachment orders against bank accounts and take money from those who cannot pay, all because they are acting under the instructions of the Minister. It will be damaging to the whole tax collection system if we have to use an enforcer of this sort with such extraordinary and draconian powers.

Before the Acting Chairman interrupts me because I am over time, I want to address an issue that is close to his heart too. The people of Dublin South, for whom he will not interrupt me for sure-----

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