Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I apologise to Senator David Cullinane who claimed I had a vacant look on my face. I defy anyone who has spent seven hours at an ECOFIN meeting at the Justus Lipsius building, like I did yesterday, not to have a vacant look on his or her face the next day. The Senator also claimed the Government lived in a bubble. It is a dangerous move in politics to presume that other colleagues do not know the circumstances we all face. No one is swinging from the chandeliers of this fine House singing, ?Yippee, a local property tax is being introduced.? No one on this side of the House is claiming this tax will be popular. It is inevitable when we are trying to repair the national finances that we have to broaden the tax base. The ESRI's statement that a property tax is six times less harmful on employment, enterprise and getting the domestic economy going than taxes on income is worth mentioning.

I agree with Senator Sean D. Barrett that we have reached saturation point on taxation, as I stated in a recent article in The Sunday Business Post. In 2008 in 12 months the taxation base collapsed from ¤50 billion to ¤35 billion. We have to fill the hole. This has nothing to do with the banks or the debt but with the fundamental problem that the taxation base, over a period of 15 years under the previous Government, was built on an unsustainable property bubble. One third of all tax revenue collected was stamp duty. In 2008 we fell off the financial cliff and moved from a tax take of ¤50 billion to ¤35 billion in 12 months. Our expenditure, however, did not change that radically and we have had to fill this gaping hole in the public finances. I agree that the property tax will widen the tax base, but it is not harmful to employment.

Even in the good times, we should have had the courage to consider introducing a property taxation system. Sinn Féin claims this is not a progressive tax. This is, however, a wealth tax in another name. Extensive houses in extensive locations with a marketable value are a form of wealth. To suggest those at the top of the tree will not pay more is fundamentally wrong. This is a fair tax which replaces the unfair tax of the domestic charge.

We had a debate in the House on this issue before December. The Minister for Finance and his colleagues in the Department listened closely to what colleagues here had to say. In the amendments to the principal Act we have attempted to reflect some of the problem areas, although I am not saying there may not be changes in the future. There will be changes to the operation of the tax which is a fundamental change to tax law. There is a responsibility on all citizens to pay this tax. I take the point made by Senator John Gilroy that when laws are made in the Oireachtas, we all have a responsibility to enforce them.

It is unfair to attack the Revenue on this issue. The Revenue is simply doing a job that has been tasked of it by the Houses, assuming a majority of Members support the tax.

This is a change in taxation policy. It involves widening the taxation base. It is helping in a constructive way, as opposed to attacking employment, to bring tax and expenditure into better kilter. The evidence is available. In every other western European country there is some form of local property taxation based upon funding local services in local areas. It would be delusional on the part of some people to believe that we can ignore that now in the middle of this economic crisis. The Government stands over this measure. By no means are we deliriously happy with the prospect of introducing it but we are doing so because it is the right thing to do at the right time, to coin a phrase.