Sean Barrett (Independent) | Oireachtas source

The Minister of State has been lobbied by various groups stating it is not. Taxation accounts for 44% of GNP while the OECD average is 41.9%. We might have had a low-tax economy in the past but the property tax is on top of an already heavily taxed population. The myth that we have a low-tax economy should be debunked. It might be nice if one's corporation tax rate is 12.5% but the rest of us live in a high-tax country. The problem is that we are spending 55.5% of GNP whereas the OECD average is 45% and the OECD-EU average, including Scandinavia, is 47.6%.

The problem with the agreement in the documents of April 2011 is that we are increasing taxation in the period of the rescue from ¤34 billion to ¤44 billion while expenditure on the current side stays at approximately ¤48 billion. Too much of the adjustment has been achieved through taxation. The property tax continues in this vein in the belief that Ireland is a low-tax country. While the Minister of State does not believe this, many commentators do.

Rates are being reintroduced in an already heavily taxed country. They had been abolished on a revenue-neutral basis because all the other taxes rose. There were some benefits. The Minister of State is too young to recall that the de-roofed properties all along the west coast were the result of rates. Taking them off resulted in a higher standard of housing. The abolition of rates was not at the expense of the Department of Finance because the other taxes were raised.

With regard to the once-off taxes that people pay, the Minister was very tough. This matter must be taken into account. The fault with the once-off taxes, such as stamp duty, a property tax, is that the Department of Finance did not distinguish between once-off revenue and recurring revenue. It spent it all. It is dangerous to tell a person who paid tens of thousands of euro on stamp duty that he or she did not pay any property tax and is liable. It shows that when dealing with the Government, one never wins. If one pays taxes up front, it will be back to collect more. That must be addressed.

The problem with house prices in general is determining the actual value. All the Senators who have spoken have identified this issue. Our property prices are kept up by NAMA, by not putting 83,000 ghost estate houses on the market and by forbearance. If we freed up the market, the real price of property might be 30% lower. The ESRI or some such body should be asked the real value. Homeowners, who have already been subject to tax increases, now must pay the property tax because the Government is propping up the price of property in order to make banks look a bit better.

We must consider the issue of inability to pay. I refer in particular to older people. For them, the value is pretty much irrelevant. To use one of the phrases of the Minister for Finance, if a "deranged banker" buys a house near one, must one pay more property tax? There are plenty of deranged bankers. The phrase "deranged banker" was used by the Minister when he was addressing the finance committee.

What about the Dunboyne factor mentioned by Senator Byrne? There will be areas in which locals will not be able to live because spillover incomes from people moving in will ramp up their tax burden. The locals have not got any extra income. Perhaps the local shopkeeper or another individual may benefit a little but we must account for the fact that events that have nothing to do with an individual's ability to pay could dramatically increase his or her liability to the tax, irrespective of whether a deranged banker or another individual moves into a property down the road with an inflated price. There would be no increase in the income of anybody else but, under this tax, he or she would be liable.

Consider the circumstances if one must sell one's house to pay the tax. A house is not just the building one sells to pay the tax to the Revenue Commissioners; it is also a link to schools, neighbours, community facilities, the parish, the community and the GAA. This must be taken into account. There would be serious losses of welfare if people had to break all these connections. A house is not just a building on which the Revenue Commissioners put a value.

On what will local authorities spend the property tax revenue? Responsibility for roads has been transferred to the NRA, and responsibility for health to the HSE. Waste collection is now the responsibility of the private sector, responsibility for water services is being transferred to NewERA and responsibility for higher education grants is being transferred to SUSI - Lord between us and all harm. If local authorities are not doing anything, why should there be a tax to support them? I take into account the fact that residents mow their own grass and pay private companies to remove their rubbish. Many live in apartments with service charges. What exactly are local authorities supposed to do for us? The Government does not appear to believe in them. Since it has transferred so many functions from local authorities, why do they need additional tax revenue?

I thank the Minister of State for his patience.

The worst aspect of this Bill is that there is a clear alternative, a fair way for the State to raise revenue in a way that is sustainable and realistic.