BY RULING out the introduction of a flat rate property tax in the coming budget, John Gormley has presented himself as a champion of fairness. And perhaps he is. But no formal proposal was ever made to Government for the establishment of a flat rate property tax. That was a Fianna Fáil diversionary tactic. Reforms suggested by the Commission on Taxation last year involved separate valuation bands; a self-assessment system and the provision of exemptions and waivers for those on low incomes.
Fianna Fáil is running scared of a property tax. Such taxes were deeply unpopular in the past. And its introduction could further depress a falling property market. While the Commission on Taxation estimated it could raise more than €1 billion a year, absorbing stamp duty and recompensing recent home buyers, the Government is likely to go elsewhere for its funding.
Last December, Brian Lenihan declared that considerable groundwork needed to be done before “a site valuation tax” could be introduced, based on the registration of ownership and the valuation of land. Some time later, the Valuation Office indicated it could take decades to complete that work. However, the Commission on Taxation had proposed the introduction of a self-assessment system, pending official valuations, as part of a “comprehensive overhaul” of the tax system. Other reforms involved the introduction of a carbon tax and domestic water charges.
A carbon tax has been imposed by Mr Lenihan. And broad agreement was reached in Cabinet on a metering system for domestic water. Mr Gormley’s contention that a water charge that fails to take account of usage brings no environmental benefit will be reflected in a metering system established at local authority level.
After three torrid years in government, the Green Party leader is understandably anxious to present his party’s contribution to reform in the kindest possible light. There is no doubt, as he told Stephen Collins in today’s interview, that Green Party ministers stood firm when extremely tough decisions had to be taken. The party influenced stricter regulation of the financial sector. But it shared blame for the economic downturn in the local and European elections. And some of its major commitments have yet to be delivered. Chief among those is comprehensive reform of political funding and local authority planning; the establishment of a new electoral commission and provision for a directly elected lord mayor of Dublin.