Paul Murphy: Calls to Abolish 'Unfair, Regressive' Local Property Tax

I think listening to the debate that some people here are in need of a history lesson, as well as perhaps a mathematical lesson in terms of what progressivity means and what it's meant to relate to, i.e. income and wealth. But in any case, to deal with the history lesson first, the local property tax was first introduced in 2013 as part of the Fine Gael and Labour government's austerity agenda to make working people pay for the economic crash and the bank bailout. And it was met by a massive campaign of opposition, with tens of thousands of people mobilising. I remember protesting outside this building whenever a Fine Gael-Ardèche was taking place. People took to the streets understanding precisely what the property tax was, it was an austerity measure, and to vent their anger at the injustice of what Fine Gael and Labour were doing. We know that it was ultimately ran through by revenue, through payroll deduction, despite it having no electoral mandate, and the clearly expressed opposition of a large majority of people. But it was an unfair, regressive tax on people's family homes then, and it is an unfair, regressive tax on people's family homes today. The new rules being introduced by the government mean that homes built since 2013, previously exempt, will now have to pay the local property tax. Other exemptions are being removed, and there is a new method for calculating the tax that will increase bills for very many. We fought the introduction of the local property tax in 2012 and 2013, and we're not ashamed to continue to fight against this unfair austerity tax, and to demand that it is abolished. And we have an alternative in terms of progressive income tax on high incomes, taxes on second homes, taxes on wealth, and corporation tax. Just to go into a little bit more detail, in looking back at articles about the time of the struggle against the property tax, I came across a quote from a protester in late March 2012, 46-year-old electrician Brian Murray. He says, And that summed up the sentiment of those who were protesting. It wasn't people with big, large houses protesting for the right not to be taxed. It was people protesting against austerity. And the government's victory in, you know, imposing the property tax against the wishes of the people who mobilized, and against the majority of the population, was a pyrrhic victory. Because let's remember that Fine Gael and Labour got their just desserts at the election in 2016. It was the local property tax and water charges that drove Labour down from 33 seats to 7, and Fine Gael from 66 seats to 50. And it's clear, unfortunately, that the lessons have not been learned by the government. And when you look at the details of what's being proposed, and the impact that is going to have on a significant minority of households in this country, it's clear they're determined to continue on the same track. Close to three quarters of a million households will face an increase in local property tax bills. The government doesn't want that figure to kind of be widely known, that, oh, it's a technical thing, things are just changing around. Sure, most people are neither winning nor losing. Some people are winning. But almost three quarters of a million households face an increase in their local property tax. You add to that the 100,000 who are facing paying property tax when they previously weren't doing so. Section 19 makes the owners of properties leased to local authorities or approved housing bodies for more than 20 years, liable to the local property tax rather than the local authorities or the AHBs. But it's likely that the costs will simply be passed on from the funds to the local authorities or the AHBs. So the only real import of this is to copper fasten the very bad model of long-term leasing of social housing from cuckoo funds, which we remember, well, we don't have to remember back far. Just last week, the government ramming through a tax break for them. Section 22 makes buyers of properties sold by local authorities or AHBs liable for local property tax due on the normal market value of the property rather than a reduced €90 rate available that would otherwise apply. The main significance of that is that it shows that the government intends to continue selling off social housing despite the housing crisis. We welcome the exemption for MICA homes. That should continue for as long as it is necessary, not just the six years provided for in the bill, but as already has been mentioned by many other speakers, it's very, very inadequate in terms of people having to pay for the inspections and so on themselves. Fundamentally, the builders and the businesses responsible should be made to pay the full mediation costs of homes damaged by MICA. Just to finish in terms of alternatives. I mean, one very big alternative, obviously, is the question of a COVID wealth tax, something that even the IMF in the context of the pandemic has raised the question of having wealth taxes. Obviously, the government isn't interested in going there. But it is a fact that the wealthy have gotten much, much wealthier over the course of the pandemic. I mean, you look at Jeff Bezos at an international level, has doubled his wealth from about $100 billion to over $200 billion in the course of the pandemic. And the same has happened in this country, the likes of Dennis O'Brien, massively increased his wealth. And it means an increased concentration of wealth in the very top households. The richest 1% of Irish households, according to the Central Bank, all of whom are multi-multi-millionaires, own 15% of net household wealth in this country. Obviously, you go out to the top 10%, they control over 50% of the net household wealth in this country. But a 3% wealth tax on the top 1% would raise €3.6 billion. Many, many multiples of what is raised by the regressive local property tax. I want to finally just finish, because I just am struck by the irony of the Fine Gael speakers, and I think it was Deputy McNeill, talking about a tax of such progressivity, the property tax. How can we possibly be opposed to it? How can we oppose a tax such as this? Just absolutely astounded at the idea that anyone, because it's progressive. When the government that she supports, look at what the government that she supports is doing on corporation tax right now. I mean, for years, we have railed in this place against the tax haven status of Ireland. We've said it's immoral, in terms of the robbery that takes place of particularly people in the lesser developed countries, and the robbery from their public services, the robbery from people in this country. We've talked about the immorality of it. We've also pointed out the fact that it's a completely unsustainable model. Because if you're trying to win a race to the bottom, in terms of corporation tax rates, of which really only the corporations only win, you can't win that. Always someone is going to be able to come in and undercut you. That was seen in terms of Trump. It was seen in terms of bargain basement Brexit. It's seen in terms of various Eastern European countries. It is not a sustainable model. It's a model that the government is absolutely committed to. But every single time, for years, that we have raised the question of corporation tax and ending Ireland's tax haven status, the government has said, oh, no, no, no, we agree with you. Not on Ireland being a tax haven, of course, definitely not. But we're open to, we'd like to increase the amount of taxes that corporations are paying and so on. We're open to all of that. But the very, very important thing is, it can't be an Irish process. It can't be an EU process. It has to be an OECD process. It has to be as a worldwide process. And in that context, geez, that would be great. We'd love to be a part of that. Then what comes along is Joe Biden, with his extremely, extremely watered-down, inadequate proposal for a minimum corporation tax rate of 15%, signs up the vast majority of countries in the world, so 130 countries in the OECD. They say we're all for it. Countries representing over 90% of global GDP, saying, yep, for the minimum corporation tax of 15%. And what does the Irish government say? Oh no, all of a sudden, we're not in favour of this global cooperation to increase the rate of corporation tax, increase the rate of tax that corporations pay. No, no, no. Ireland finds itself in the corner with Bermuda, with the Cayman Islands, with Barbados, with St. Vincent and the Grenadines, saying, no, no, we couldn't possibly go along with this. Why? Because Ireland's a corporate tax haven. And it's a model that the government is committed to, despite the fact that it doesn't work for people in this country, it doesn't work for people around the world, and it is an utter dead end. Thanks.