Barry Ward (Dún Laoghaire, Fine Gael)

Broadly speaking, LPT is a good thing. When it was introduced I welcomed the fact that it was part of a model to allow local authorities throughout the country to become self-financing and self-supporting. However, I have significant problems with the way it was put together and what the Bill does. In the first instance, local property tax was established to make local authorities self-funding. In reality, it has not achieved this to any substantial extent. I come from a background of 11 years on Dún Laoghaire-Rathdown County Council, the local authority area in which the highest rates of local property tax are paid in the country.

There is, of course, a perception out there, and I know it gives some people great glee to suggest, that Dún Laoghaire-Rathdown County Council is a very wealthy local authority. In fact, this is not the case. The vast majority of funding for local government comes from commercial rates. We do not have a substantial commercial rates base in Dún Laoghaire-Rathdown. We are by some distance the poorest local authority in Dublin and compare with county councils throughout the country rather than our bigger brothers and sisters in Dublin. The annual budget for Dún Laoghaire-Rathdown County Council is approximately €280 million or €290 million. Dublin City Council's budget is more than €1.2 billion.

Looking at our commercial rates base, which is a little over €50 million per annum, Fingal County Council takes more than €80 million from Dublin Airport alone, just one ratepayer in its area. South Dublin County Council has a large commercial hinterland around the M50 which generates massive commercial rates for it. In this instance, we are looking at a local authority where local property tax costs its residents large amounts that benefit the council little enough because it is not a very populous area, and it ends up being a relatively poor local authority.

In 2012, when this was put together in anticipation of the Local Government Reform Act 2014, the idea was always that local authorities would have the right to vary the property tax up or down by 15%, according to their needs or whatever way they chose to interpret it. Notwithstanding the fact this right was given to local authorities, and notwithstanding that it was always anticipated that local authorities such as Dún Laoghaire-Rathdown County Council would be able to reduce the burden on their residents, and that other local authorities where property prices were lower, particularly small rural counties, could increase it correspondingly to benefit the coffers of the county council, there has been implicit and explicit criticisms - explicit in this Chamber in the course of this debate - of those local authorities that choose to recognise the fact their residents pay more than they need to, or more than they should, in the context of their earning capacity, when those local authorities reduce the property tax accordingly. Not only this but there have been consequences for those local authorities with regard to central Exchequer funding, which is cut because they are seen to have not played ball by reducing the local property tax when, in fact, the entire system is apparently designed to allow them to do this.

When I look at Dún Laoghaire-Rathdown County Council this is exactly the problem. When I was on the council we consistently reduced it by 15% because it was the fair and reasonable thing to do. Our residents, the people who live in Dún Laoghaire-Rathdown, pay vastly more than somebody in the Offaly, Carlow and Longford county council areas, in fact, more than somebody in any other local authority area we could pick around the country. They are disproportionately penalised. Now we have a situation where, notwithstanding the significant increase in house prices of 25% over recent years, notwithstanding the fact the Government is doing its damnedest to prevent those increases in costs, and notwithstanding the fact there is a clear public policy objective of not having property prices continue to rise or continuing to rise at the current rate, we now have a situation where the Bill will specifically penalise those householders who may not have traded property, are not flipping property and are not wealthy people but who have a house that is of a particular value. They will now have a greater property tax burden.

For one stream this is fine if they can pay it but what happens to the elderly retired person who has a fixed income? We know that person's income has not gone up by 25% in recent years. What happens to a person in a job where their pay has not substantially increased? Their local property tax bill will increase. The Minister might well respond by stating most people will stay within their band or that where there is an increase, it will be double digits. That is fine but what happens if somebody inherits a family home in an area where property prices are substantial? Their bill will substantially increase because the property is valuable. The reality is that it does not reflect their ability to pay the bill. It does not reflect that there may be no change in their circumstances.

I understand the rationale behind LPT and I am in favour of it as a notion. The way we do it through the 2012 Act and this amending legislation is blunt and unnuanced. It does not reflect people's ability to pay. It does not reflect the disparity in property prices throughout the country. It does not acknowledge the fact that if you are a renter or local authority tenant, you have no liability. Beyond that, a local authority such as Dún Laoghaire-Rathdown County Council also has to pay the local property tax for social housing in the county. In addition to the individual burdens being placed on individual households, the Bill will also further disadvantage local authorities such as Dún Laoghaire-Rathdown County Council because they will have a bigger local property tax bill to pay with regard to their social houses.

When we are pushing those local authorities to build more social houses and acquire social houses - an area in which Dún Laoghaire-Rathdown has performed well - they now get a further smack in the face in this Bill regarding their outgoings for local property tax. Could we not look at local property tax with a more reasoned, fairer eye that actually reflects the ability of the people involved to pay those taxes?

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