Sean Barrett (Independent) | Oireachtas source

Following on from Senator Cummins, in many ways we wish we were not here but at this stage of our consideration of the Bill we have added, under the agreement, ¤10 billion to taxation, and public expenditure is still rising. We discussed that on the last occasion the Minister of State was in the House. We have become a high tax society. This is different from saying we will substitute the property tax for less tax on income. This tax will increase the overall tax burden and, as several Members said, the burden is really hurting people. We must address the issues addressed by Croke Park II and other issues such as those raised in the report on child benefit, the appendix to which shows that the Irish level of social provision is among the highest that one would find anywhere. It is difficult to address all of those when our employer - I am referring to people who are paid from the public purse - is broken. In trying to remedy that situation, extra schemes involving public expenditure cannot be pursued in the current situation.

This tax has been described as a stable source of income but it is not. If it had been applied in 2006, the revenue from it would be down by about 60%. Somebody in the Civil Service wrote that this is a new stable source of income but having regard to Irish property prices it is not. I guess the State is taking a gamble that house prices will rise.

Development levies should have been considered in this context. They were hidden in the price of houses in the boom and people paid ten of ¤10,000 in levies. It is a bit like heads I win, tails you lose. Homeowners paid tax upfront in stamp duties on their properties, but the State has changed that and people do not pay stamp duty now but they pay tax on an annual basis.

The valuation process requires some thought. What about property values in high crime areas? I read the other day that 4,000 people have been arrested for a spate of burglaries. There was a massive spate of burglaries in areas about which locals would have known and they would have said that part of living in the area was the risk that one's house would be burgled twice a year. That problem is now under control but do the Revenue Commissioners know where high crime areas are?

As I said to the Minister, Deputy Noonan, when he was last in the House, if irresponsible bankers break out again and give a person a loan of a daft amount to buy the house next door, what happens in terms of the price of every other homeowner's house in that row of houses? There was such irresponsibility previously. Would it have been possible for anybody to live near the Burlington Hotel when the property industry went nuts and hundreds of millions of euros were paid for sites and there were residential properties nearby? What happens if once again we have irresponsible bankers on the loose going on lending sprees?

Another consideration is county council planning decisions. If a council approves planning for a toxic dump beside a house, can the owner include in his or her evaluation the possibility that the county council planning office would go AWOL and grant permission for such a facility? If something in a planning department goes wrong and an area is rezoned and people's houses are seriously devalued, can those people, having paid the tax for a number of years, get a refund? How would such a scenario be handled or would their properties still be valued at the highest limit?

There is constant pressure in the Irish media to talk up house prices. If such pressure succeeds and a ministerial colleague comes up with new tax incentives and despite all the evidence we go for a property boom again, that would not give any extra disposable income to people who see a house as being purely a place to live in. That is the problem with treating a house as an asset. It damaged this country hugely. Let us just have houses as places to live in and pay for the services that the Minister of State has described. There will be such pressures, as newspapers depended greatly on revenue from property advertisements. They are all the time saying we need a new incentive to start another property bubble but that would seriously damage people who will not have the extra income to pay the higher tax and all they want to do is to live in their house.

Income always declines for old people. At best, their income could decline by a half and, as the Minister will know, some pensions schemes are so small, that people's income could decline by up to 60%. Some consideration should be given as to how they can pay the tax.

In terms of trying to design a house tax system, perhaps the old poor law valuation system was not that bad after all in that it did take account of size. We have moved to a market value system which has many imperfections .

The Minister of State mentioned the legal independence of the Revenue Commissioners, a body that scares people. Are pensioners who genuinely have a decline in their income going to be put on the list of tax defaulters? The Minister of State referred to the inspection of the property and covered the issue of an honest opinion of the market value of a property. I think most people will be honest but it may not be an evaluation with which the Revenue would agree. We should assume that people will be honest in making their submissions.