Seanad debates

Wednesday, 29 November 2006

6:00 pm

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)

There has been greater choice in the market as a result of the action.

Senator Brian Hayes stated that we were tampering with the market in that people who want to trade up will not buy because of "pathetic interventions", but that is not supported by the market or the returns. Mobility in the market has never been greater and the number of houses traded has never been better. The facts speak for themselves.

Senators Mansergh and Minihan stated that we have a responsibility to maintain a solid, careful and positive fiscal policy that provides returns to the Exchequer, is equitable and fair to the consumer and ensures we can deliver public services across the range of demands in order that the economy continues to prosper. We must be careful not to distort the overall solidity of the revenue base in our use of tools and mechanisms and our choice of innovations. It would be foolish to decide to abolish something because, with an election around the corner, it would be politically wise to do so. When making decisions, we must care for the medium-to long-term interests of our nation and the common good of the people.

Senators Ross and Brian Hayes spoke about politicising stamp duty, but no one on this side of the House is politicising it. We have made our position clear and we are responsible in what we say. I do not accept that many old people living in big houses would like to trade up, out or down or that many young people with large families are living in small houses. The market is not showing such. I live in remote, rural, rugged and beautiful east County Galway, where the houses being purchased are bigger than ever. I am sure that is the case in the Senators' own constituencies.

I listened with interest to what Senator Ross had to say. He talked about high professional fees but he is surely not suggesting the State should not receive a commensurate tax to ensure balance in society or that, as individual citizens and collectively, we should not make an equitable contribution to the development of our country.

I pay special tribute to Senator McDowell, whose speech was very measured, balanced, focused and fair. He spoke about licensing and share transfer, which we abhor and which the Minister for Finance has asked the Revenue Commissioners to examine. The Revenue Commissioners are carrying out a detailed analysis at present and will report to the Minister, Deputy Cowen in the new year. When the report comes forward we will take the necessary action in the Finance Bill. We do not want distortion in the market but sustainable transparency to ensure fairness for all involved.

I am sorry Senator Bannon has left. He accused the Government of ripping off people and wanted to exempt everything up to €450,000. When his party was last in Government it put stamp duty rates, in Budget 1997, up to 9% on transactions worth €170,000. We are not ripping off anybody but have reduced personal taxation, corporate taxation and capital gains tax and the returns show we have created stimulus in the economy by doing so. In year ten, the final year of Mr. McCreevy's tenure as Minister for Finance, we took in more money from the aforesaid taxes than in the nine previous years. That shows the reductions had a positive impact on the economy by ensuring people could trade and do business, creating a circular transfer of cash resources. This not only benefitted the individual and the companies which employed our people but also the public services in the country.

We continue to act in a measured way. How can Senator Bannon accuse us of ripping off people when the SSIAs were brought in by this Government? Mr. McCreevy was Minister for Finance at the time and his policies have been continued expertly under the guidance of the present Minister for Finance, Deputy Cowen, but we were attacked for bringing in SSIAs and accused of throwing away money and wasting resources. We created a savings culture in the country and a liquidity and reserve position. We gave people the opportunity to save and we educated young people in the necessary, traditional values of saving by rewarding them for doing so. The economy and resources of our country will be all the better for it.

Far from ripping off people or being mean we have been more than generous, to people individually by means of our tax policies and to the country in general by abolishing many of the impediments to economic activity in the tax system, which had existed for many years.

A slowdown in the housing market, which has long been predicted, now appears to be happening. The Minister for Finance, Deputy Cowen, has indicated that he is reluctant to interfere in this area as the market is dynamic and interference could have unintended consequences. That is a serious statement. If stamp duty were abolished who is to say prices would not inflate? The Minister is conscious that any reduction in stamp duty payable by purchasers may lead to higher prices, with no benefit arising to purchasers and at the expense of the Exchequer, as stamp duty has always had a moderating effect on all aspects of our property market over the years.

I hope I have put the matter in context and that Senators understand the Government's position on taxation right across the board. They can be assured the budget will be fair, equitable, measured and generous.

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