TAOISEACH BRIAN Cowen has said the introduction of a proposed property tax is “speculation” and a decision will be made by the Cabinet “in due course”.

Speaking at the Davos global economic meeting, Mr Cowen said the issue would be considered by the Commission on Taxation which is due to report on taxation in September ahead of the December budget.

“Our discussions are ongoing on that but I think we have the Commission on Taxation report which is due mid-year – mid to autumn – to be ready for consideration in our budget proposals from next year on,” Mr Cowen told reporters.

The Central Bank has advised the Government to consider a tax on residential property but the idea has been opposed by the Irish Congress of Trade Unions, which favours a tax focused only on investment properties and on “trophy homes”.

Mr Cowen said there were “various views about how soon this recession might end and how prolonged it would be depending on how optimistic or pessimistic people are about it.

“There is no doubt that 2009 is going to be a very difficult year and next year for some will see a return of some growth. For us we will have to face into 2010 with the same determination that we face into this year.

“It is clear from what we have seen in the last six months, from the downturn in economic activity, that we have to bridge the gap that has now arisen both in terms of expenditure cuts and taxation. It cannot be met by expenditure cuts alone, although they are an important factor in addressing the situation.

“Broadening the [tax] base and seeing what way we can build up our taxation base and at the same time stay competitive, do all we can for creating and maintaining jobs – that is the trick, that is the balance and judgment that can only be made closer to budget time.

“As I have said, to have a systemic and systematic review of our taxation code by the Commission on Taxation will be a very important input into that consideration,” Mr Cowen said.

Talks on an economic recovery plan involving the Government, unions and employers continued in Dublin yesterday.