All parties challenged to face issue of local tax

LOCAL government taxation is about to become the hottest political potato around.

LOCAL government taxation is about to become the hottest political potato around.

Last week, Brendan Howling received a consultant's report identifying the options facing the Government. And, next week he will circulate that document to Bertie Ahern and Mary Harney.

The Minister for the Environment is hoping for a miracle. He wants to establish a all-party approach to a taxation issue which has resisted political resolution since rates were abolished and local democracy seriously damaged in 1977.

Never mind that Fine Gael and the Labour Party rejected similar overtures from a Fianna Fail/Progressive Democrats government in 1990. Or that Fianna Fail and Labour in government spurned a related proposal from Michael McDowell in 1993. This is a new Government and a new Minister. And all-party co-operation on a politically sensitive issue may be an idea whose time has come.

READ MORE

Such teamwork occurs in European countries. Could it be that cross-party co-operation on social and financial planning might be a benign by product of coalition systems? Or could it simply reflect growing political maturity and responsibility in our young State?

But old habits and adversarial systems die hard. Political opportunism is always a snake in the grass. And vulnerable opponents make near irresistible targets, especially at election time.

But there is a precedent. Alan Dukes devised the Tallaght Strategy in 1987, under which Fine Gael supported a minority Fianna Fail government in correcting our ruinous finances. It represented a signal service to the State.

Local government taxation and reform might not be as urgent an issue. But it could be as important in terms of a properly balanced, democratic society.

When the phrase "tax cuts" is on everybody's lips, the very notion of introducing a comprehensive system of local funding gives politicians the heebie-jeebies. It has been like that for 25 years. Ever since the promised Exchequer funding for local authorities failed to replace their income from rates and power shifted towards central government.

All political parties, all local councilors, all local business people and most citizens agree that decision making must be brought back into local communities. The Barrington Report is there as a template. And there are other ideas within the political parties. There may never be a better time for action at national level on the decentralisation of decision making.

BRENDAN Howlin is looking for agreement a funding system which would replace, absorb or complement existing water and refuse charges, along with Residential Property Tax. No matter what emerges, it will be contentious. Nobody likes paying tax.

A new system is likely to transfer cash demands from the Exchequer to local communities. And the issue could become the focus of serious political dissent. After all, Joe Higgins came within a whisker of being elected on an anti-water charges platform in Dublin West last month.

The five main Dail parties have served in various government permutations over the past four years. And they all aspire to being part of the next government, in 1997. If they could reach agreement on reforms before the general election, there would be potential gain in it for all of them. It would eliminate political backlash for the new government. And a united front would facilitate collection of any charge/tax while underpinning its legitimacy.

The immediate political beneficiary would be Mr Howlin, who has been juggling this hot potato for the past year or so. But Fianna Fail and the Progressive Democrats didn't come down with the last shower. They recognise a strong bargaining position when they see one. And they regard Mr Howlin's Dail overtures with a soupcon of amusement. They didn't bat an eyelash as he pleaded his willingness to trust Bertie Ahern and Mary Harney in the interests of an all-party agreement.

Referring to statements made by the party leaders at a January meeting of the Select Committee of Finance and General Affairs (the official report has never been published), Mr Howlin said he was taking Mr Ahern and Ms Harney at their word when they said they favoured an all party review. A comprehensive system had to be devised, he said, or they would be forced to "stumble along with an inadequately funded form of local government"

Eoin Ryan of Fianna Fail appeared to agree. And Mairin Quill of the Progressive Democrats did not demur other than to observe that the history of such attempts since 1977 had been "plagued by base, gross cynicism on the part of politicians".

To hear Mr Howlin's hesitant tones, you would think Fianna Fail and the Progressive Democrats were kicking down the Labour Party's door in their efforts to share responsibility for a potentially unpopular tax measure.

Noel Dempsey was the first to puncture that rosy optimism and talk about shared responsibility. If the Minister wanted it to agree a funding package, the Fianna Fail spokesman on the Environment said then he would have to give it a real voice in reforming local government structures.

FIANNA Fail wouldn't give Mr Howlin a "blind commitment on funding" if it was then to be excluded from the big picture. "You cannot divorce taxation from the issue of local government reform, Mr Dempsey said.

Mary Harney was equally cautious. The Progressive Democrats would be prepared to consider an all-party approach to local government only in the broadest sense. And she wasn't sure whether you could separate local tax from national tax.

The reluctance and caution of the opposition parties was and understandable. But it didn't matter. There was the whiff of public duty and cross-party discipline in the air. The question of local government reform was being seriously considered. The kite was up and flying.

A general election is about a year away. The Government's consultants are about to embark on a more detailed assessment of funding models. There is plenty of time for the Dail parties to agree on reforms that would provide for local democracy in the next century. After 25 years of neglect and of piecemeal action by a range of governments, it is the least that should be attempted.

If they don't get their acts together, the outlook is bleak. As Mr Howlin said. "Nobody will want to be a kamikaze pilot and fly solo on this issue".