Peadar Tóibín (Meath West, Aontú)

The local property tax was introduced by Fine Gael and Labour to fill a massive hole in the budget that was created by Fianna Fáil crashing the economy during the banking crisis. The local property tax is in many ways a child of the economic catastrophe which was caused by the Fianna Fáil-led Government at that time. It was a Fine Gael and Labour austerity tool, which was introduced to find other ways of taking money out of people's pockets at a time when the country was absolutely broke. It was designed to fill a gap that was created by the withdrawal of central government funding to local authorities. In fact, it was not promised new income for local authorities but just a straight swap of a local government grant that was given by central government over periods of times.

All tax comes from people's pockets. No matter what tax people pay, whether it is income tax, property tax or VAT, it all comes from people's pockets. Over the last couple of hundred years we have decided that progressive taxes are the best idea because the amount of tax people pay is based on the amount of income they have. However, the problem with property tax is that it is not progressive; it is completely ignorant of the level of income that comes into a family. For sure, there are significant proportions of the population where the property is valued at roughly the same proportion as income coming into the house, but there are major disparities to it. If we are honest, this Bill admits that the value of the property is completely disconnected from the incomes coming into people's homes which is why the bands need to be reset. I have no doubt that the Government will also need to reset the bands in another number of years because the increase in house prices is continuing at such a trajectory that that disconnect will remain embedded within the system. That is a basic fault and problem with the property tax at the moment.

The other element in this is that the cost-of-living crisis is really hurting families at the moment. We have not had a proper debate about the cost-of-living crisis since the general election and the start of this Dáil. It is getting worse at the moment. People will have seen that the cost of petrol and diesel has started to creep up significantly. That is being pushed by the war between Israel and Iran. If Iran follows through with its threat to stop traffic going through the Straits of Hormuz, fuel prices will spiral in the next while.

Grocery price increases are quite incredible. The cost of groceries for families has increased by a third since 2018 and that trajectory is continuing. Even since April, we have seen a marked increase in normal staples, such as chicken. The CSO's price watch monitoring indicated that 1 kg of chicken breasts could be bought in April for €5 and that is costing families €11 at the moment. The price of a pound of butter is now €5. In March the cost of a pound of butter went up by 76 cent. All that grocery inflation can be added to rental inflation at the moment. The cost of a new rental lease is now about €2,000 on average, which is an amazing price. Families are put to the pin of their collar. Families are hurting. Families are curtailing their activities. There is enormous strain coming on families due to grocery inflation and other inflation.

I will admit that much the inflation that is happening is external to the Government. The Government does not have its hands on the levers of much of the inflation that families are experiencing. However, it has a direct influence on some of that inflation. Last year the Government took in €4.1 billion on fuel taxes, the highest fuel tax take ever in the jaws of a cost-of-living crisis, which is incredible. Normally the instinct would be to reduce the fuel taxes when people are hurting so much. Carbon taxes now surpass €1 billion and according to the Government's policy, it is set to continue increasing for the next five years.

The M50 tolls have taken €2.2 billion since 2008. That is another lever in the Government's hands. The Government took in billions of euro in VAT on the cost of construction. The Minister should consider reducing VAT on the cost of the construction, first, to reduce the price of houses and second, to stimulate market activity. That would do so in a manner that does not hurt people through increased prices or increased rentals in the future. It would have a similar effect that it is trying to get with its new rent-pressure zones at the moment.

The Government does have its hands on the levers of certain cost increases. The Government is a source of inflation for families and this is another source of inflation. I understand that its objective here is to try to ameliorate the costs that would have accrued to families if it did not touch those bands. However, the fact is there will be an increased cost coming on families in the future. If the house price increases continue, that will hurt families. This is a tax which is ignorant of the amount of income that comes into families' pockets and will add further to the pressure on families.

The other side of this coin is what value we get. I live in a great county, but it has seen its population radically increase. When my father was young, 60,000 people lived in Meath. When I was young, 100,000 people were living in Meath and now 250,000 people are living in Meath. With practically every central government investment into local authority delivery and provision, the Government has not kept up with population growth. As a result Meath County Council has one of the lowest incomes per capita of any local authority in the country and that is significantly hurting spending at the moment.

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