The Independent has published leaked budget proposals (but, as always, check against delivery). There are three issues covered: cuts in Child Benefit and medical card prescription charges, and the imminent property tax. Here is what the parties and the Government said about these issues in the recent past.
Property Tax
There are so many U-turns on this issue, I’m surprised Government Ministers haven’t fallen down from dizziness. The fact is that both Government parties actually campaigned against the property tax they are now going to introduce.
Fine Gael actually opposed the introduction of an annual household property tax. This is from their election manifesto:
Fianna Fail’s proposal, now endorsed by the Labour Party, to introduce by 2014 an annual, recurring residential property tax on the family home is unfair. But as we tackle the fiscal crisis, we will have to cut central exchequer funding for local authorities, and we recognise that local authorities will have to find more sustainable sources of revenue appropriate to local circumstances. What will be viewed as fair in South Dublin might be viewed as unworkable in rural Clare.
In this context, we will empower local authorities to put in place, following the 2014 local elections, fairer alternatives to Fianna Fail’s and Labour’s recurring annual tax on the family home. The options would include:
- No extra local taxes, forcing local authorities to close non-priority services and / or to deliver increased efficiencies;
- Increased local user charges for waste etc.; or
- The option of a local “site sale profits tax”. Such a tax would be levied on the profit made from the site value on the sale of a residence (sales proceeds, less cost indexed by inflation, less stamp duty paid and less home improvements)
The final measure might be considered as both fairer and more economically sensible than an annual recurring property tax.
There is no question – Fine Gael campaigned against a property tax. It called for alternatives (the site sale profits tax could be a positive measure) but committed that those alternatives would not be introduced until after the 2014 local election.
Yet now they are introducing a property tax. This is similar to their opposition to a Household Charge and their u-turn on the issue when they introduced . . the Household Charge.