Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

The Minister, Deputy Donohoe, will be aware that I have undertaken significant research into the operation of the local property system, LPT, specifically how it is distributed, and that I made a substantial submission to the review of the tax. I am sure the Minister will agree that the best way to turn people against a tax is to mislead them in regard to how it is to be spent. The reason for the resentment in regard to the local property tax is, I believe, people not knowing where their money is being spent.

While the conversation surrounding LPT tends to revolve around raising or lowering of the tax by up to 15%, one of the real scandals lies in the detail of how the model underpinning the operation of the tax builds an inherent structural unfairness into the system. The interdepartmental group report following the review of LPT stated that the work of the baseline review group was completed and that the Minister for Housing, Planning and Local Government, Deputy Eoghan Murphy, was considering its findings. That was last March. The Government continues to sit on that report.

We are now at a time when local authorities are considering their budgets for 2020 and making LPT decisions. Owing to Government inaction, they continue to do so using a model that is grossly unfair. We know there is an equalisation element to this and that there are 31 councils in the Republic. Between 2015 and 2019, 21 of these councils received €628 million from the equalisation fund. The narrative is that the rich councils are transferring funding to the poorer councils but the great irony is that many of the so-called poorer councils have greater staff numbers, more funding and better services. For example, Wicklow County Council has a baseline of €8.5 million, a point below which it would not be permitted to fall, whereas Mayo, with 12,000 fewer people and a greater income from other sources, has a baseline of over €17 million. These are artificial baselines based on data from the late 1990s. Population changes have no bearing in this area. For example, Fingal County Council must provide for 100,000 additional people, with no recognition that they exist or provision for their needs. To add to the problem, most of the so-called rich councils must use part of their so-called surplus to self-fund roads and housing from their local property tax. This replaces Government grants to these councils.

Of the €108 million spent in this way, €86 million came from the four Dublin local authorities. Counties such as Cork, Kildare, Meath and Wicklow are growing areas and they are at the heart of this problem. The entire system is unfair and the Government knows it. When will it publish the report on the review of the baseline system, which it received in March last, and does it accept the recommendation of the 2015 Thornhill report that 100% of what is collected locally should be retained locally, if it is to be a local tax?

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