Smart Taxes does not agree with all of what Dermot has to say about a property tax below here – but that is not the point. The point is that we need this debate before any decision is made, hence we make space here for his opinion as a former Mayor of Dublin City.
Don’t forget to come to Trinity College next Monday 7.30pm for the “A Fair Property Tax?” public debate. Tell your friends to come too.
It has been extraordinary, indeed somewhat surreal, that as a Country, we have been having an extended debate the introduction of a Property Tax/Council Charge in the absence of virtually any contribution from those who actually work within the local government sector and try to make a dysfunctional system work at all. Instead we have had myriad opinion pieces from academics, ill informed commentators, vested interests and frequently the oppositionists from the Far Left who have opposed every single suggestion as to how we should finance our system fairly and with democratic accountability.
Too often the voice of the Constructive left has been sidelined and the platform left to the opportunists. Across the world Socialists and Social Democrats advocate payment into a collective fund, toward the provision of collective services. All across the world, that is, except for the Trendy Left and Nationalist Left in Ireland. Here they simply oppose, campaign and seek to instil fear and selfish individualism. I oppose their agenda just as much as I oppose those who broke this country and brought Ireland to its knees.
No Public representative particularly wants to advocate more tax. However surely this country has had enough of those who promise without cost and who offer Public Services without any reference to payment or appropriate taxation.
The truth is that since the populist and cowardly abolition of Domestic Rates Local Government has been starved of funding. The promise to reimburse Councils for the Rates foregone never honoured by Government. I have calculated that since that decision approximately E4billion has been withheld from dublin City Council alone by Government. That cannot be sustained.
It is clear that the Household Charge has many flaws and that the collection model was seriously defective. The Government has made clear that this will be addressed in the context of a new progressive and fairer property tax to be introduced from 2013.
Without even knowing what that tax will be, how it will be assessed, on whom it will be applied and what allowances and exemptions will be made for those who cannot afford to pay, the pretend Far Left in Ireland have already said No. So much for Social Solidarity, so much for honesty and so much for the redistribution of wealth that they claim to stand for.
We need an honest debate on Local Government Reform and on Local Government Financing.
I have proposed before that a Forum on the Financing of Local Government be established. It would be comprised of the main Political Parties, the Social Partners and the Councillor Representative Bodies. The Forum would be charged, with agreeing a consensus approach on the issue. There would be an opportunity to contribute for the wider public and it would be given twelve months to report.
The Forum could consider either a national and common approach to the funding issue or, as I would prefer, a range of options that could be determined, as appropriate by local elected Councils.
These could include everything from property taxes, a tourist or hotel bed levy, planning enforcement charges, a variable income or sales tax and so on. Real responsibility will then rest with local Councillors who will also have real flexibility in how to spend the money.
In the meantime, unlike the ULA/PBP/SP/SF/JPF campaigners, the Dublin City Council Finance Committee –against the wishes of the Sinn Fein Chairperson – has made a detailed submission on a proposed property tax. I was pleased that the Committee, representative of a broad range of Councillors and civic society, endorsed the thrust of the proposals I submitted.
In essence we agreed that:
1) Property Tax raised locally should be retained by the relevant Local Authority in which the money is raised.
2) That recognition of the difference purchase costs in some areas be recognized with appropriate banding for setting the rate to be established. The charge would also reflect the size and value of the property.
3) That an ability to pay clause be an essential element of any new Property Tax.
4) Rcognizing the need for Equalisation Measures, but also the often higher costs associated with higher population areas that a maximum of 10% be taken from the sum collected as a contribution to an Equalisation Fund. Central Government should contribute any sums necessary to ensure adequate finance for the overall scheme
5) .That Local Councils be allowed to vary the nationally set rate by a maximum of 5%.
6) Provision be made for costs incurred in protecting and upgrading Heritage and Cultural properties that are open to the public.
7) That a penalty would be applied for any deliberate dereliction of property in an attempt to avoid payment. In short that there be no reward for dereliction of property.
We also agreed in principle that given the enormous sums expended in Stamp Duty that a sliding scale would apply to cover the years 2008 to 1998:
While we did not agree on specific figures my own suggestions were that the following scale would apply:
90% abatement for First house bought in 2007 and 2008
80%abatement for First house bought in 2006 and 2005
60% abatement for First House bought in 2004 and 2003
50% abatement for First House bought in 2002 and 2001
40% abatement for First House bought in 2000 and 1999
30% abatement for First House bought in 1998 and 1997
I also suggested that given the normal high costs incurred with the purchase of a first house that an abatement sliding from 70% to 20% be applied for the first five years of such purchase in future.
Smart Taxes does not agree with much in Dermot Lacey’s piece but that is not the point. The point is that it calls for a debate where we can argue our different positions and contribute to a good decision.
Financing is central to any real reform of Local Government and, in my opinion, reform of Local Government must be central to how we reform Ireland. Honesty rather than sloganeering and playing to the gallery must be central to both.”
Dermot Lacey is Leader of the Labour Group on Dublin City Council and a former Lord Mayor.
