Brian Stanley (Laois, Independent)

I will comment in due course on the Finance (Local Property Tax and Other Provisions) (Amendment) Bill 2025. The Bill is obviously being brought forward to raise more money. I wish to raise a couple of points to provide context.

The abolition of rates by Fianna Fáil in 1977 completely removed a sustainable source of funding for local government. While the election that year was won on the back of this move - in fact it was a landslide victory - not long after, the incoming Government increased taxes. I remember at the time watching my pay packet evaporate. The shortfall was made up by heaping more tax on top of workers. That was not the way to go. While there was a short-term benefit for the then Government in getting into power. Having power and control over taxation, it leaned harder on ordinary workers. Not having control of finance completely impedes the role of councillors and what they are supposed to do in performing their functions. Taking away the rates base in 1977 completely undermined local democracy.

There are a number of issues with the local property tax, including the fact that there is a lack of transparency as to how it is spent and allocated. Within local councils, the management take the lead in terms of how the money is divvied out. They tell councillors what they can and cannot do and why money must be put into this or that area. There is a certain amount of arm-twisting in terms of getting budgets through. In reality, councillors have very little say in the matter.

The other big problem with the LPT is the means of property owners. LPT, as it was introduced in 2012 and 2013, takes no account whatsoever of the income of the property owner. Somebody could be living in a house worth €500,000, €600,000 or €700,000, but they might be on a single State pension. For example, a widow or widower could be living on a State pension and have very little disposable cash to use to pay the tax.

In County Laois last year, it was projected that there could be a possibility of raising €11.6 million via LPT. However, the total amount realised was €3.1 million. Residents must be told more clearly what they get in return. That is a real issue. We must remember that in many cases, people who own their own houses have already paid stamp duty and are paying high mortgages. In some cases, the LPT turns out to be a tax on debt. People still have to fork out for services, such as refuse collection, that were privatised. More and more families are having to dig deep into their pockets to fund the running of schools. I refer to just the basics such as keeping the lights on, the heating going, and basic work required in the school. That is what is happening throughout the country. At the moment, a lot of schools have overdrafts. INTO representatives told me and others here last week that a substantial number of schools are running into the red. That is not sustainable in the long term, and it must be addressed in the budget. There was a very modest increase in the capitation grant last year but it is still way behind what it needs to be for primary schools. That must be addressed in the budget.

I have concerns about the Bill. The exemptions for houses affected by defective concrete blocks in sections 4 and 5 are welcome. I also welcome the possibility of claiming a six-year exemption. The people who have been affected by that issue are facing enough difficulties. However, section 7 provides for a new charging methodology for the LPT. All valuation bands are to be widened by 20%, which looks okay on the face of it. However, the baseline for band 1 is being increased from €90 to €95, with the potential to increase by 25% on top of that. Band 2 is increasing from €225 to €235, again with the potential for that to be further increased. I read about another band with some interest. The basic rate is also set to be reduced from 0.1029% to 0.0906%, which will apply to properties valued up to €1.26 million. That could mean that somebody with a good income who is fairly well off and living in a house worth €1.25 million could do quite well out of the Bill in comparison with a family in a home worth €250,000, €300,000 or €400,000. I am not sure about the rationale behind that, but the way it is framed in the Bill, it looks like it will benefit the cohort of people who happen to be in houses worth up to €1.25 million and who also have very good incomes.

The other area of concern is that while the Bill allows for variations of up to 25%, that is to increase, but it only allows for reductions of 15%. If we look at the lists for recent years, we can see that many local authorities including in Laois, increased their rates by 15%. Will those who feel the brunt of the extra increases in terms of the changes to the bands and rates also face an increase of 25% in October when it comes to the budget? That must also be factored in.

In an ideal world, local authorities must be able to raise moneys. PAYE tax was increased dramatically - those who were working throughout the 1970s and 1980s will remember this – but the corresponding increase was for PAYE workers to take the hit when rates were abolished. Unfortunately, that destroyed the remit of local authorities and affected local democracy. In an ideal world, we would have sustainable funding at local level, while taking into account the needs of workers.

The key point about the LPT, as it has been framed in the past 12 years, is that no account whatsoever has been taken of means. That is simply not good enough. Means must be factored into it. There is also a lack of transparency in how the tax is spent. I would like to see improvements in that regard. I would also like to see councillors being given a greater say.

I have one further point to make to the Minister about local government funding. In the past five or six years, a great deal of money has gone directly to projects chosen by the management teams of councils. I want to flag this issue for the Minister. It is a real problem. I have asked local councillors about projects I have seen commence, but they say they had no notice of what was proposed and that the relevant matters did not come before them for decision.

It could be the Department of arts and sport or any Department that is lobbing money straight down to local authorities. However, the chamber of the local authority, which is the primary essence of local government, is being undermined. When one starts undermining local democracy, one starts undermining democracy overall. I have real concerns - I wish to say this sincerely to the Minister, and I said it to Phil Hogan in the Chamber in the first year I was here back in 2011 - about local government being undermined and people not seeing local government as valuable and relevant. They need to see what they are voting for be given that control. I can rattle off - I am sure other Deputies can as well - all of the different functions that have been taken away from councillors in the past 25 years. If we continue undermining local government in the way we have been doing over the past number of years, we are going to further erode peoples' trust in local government. It is the nearest form of government to the people. Generally, people know their local councillor. They can talk to their local councillor. Their local councillor has access to senior officials and us. The local councillor or a group of them can contact Ministers if they wish, which they regularly do. They have a right under the 2001 Act to make representations to statutory bodies, public bodies and semi-State bodies, such as the ESB, the HSE, etc. It has to be taken account for. We need to increase the role of councillors and local government instead of continuing to erode it.

One area that needs to be tackled by the Government at central level is how senior departmental officials - I am not too sure about how much Ministers see - are transferring moneys from their respective Departments straight to local authority staff, including senior management. Most of those people are good as well, but councillors do not have any say in how that is allocated, used or monitored. That is not a good thing to do.

That is my take on it. The weakness in the system is that lack of accountability and fairness because of the means of the householder not being taken into consideration. I wish to see the Government move to take that into account in future years.

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