Populist demands of Independent Alliance will undermine local government.

Speaking today in response to the latest proposal from the Independent Alliance on Local Property Tax, Labour Party Leader Brendan Howlin spoke about the importance of maintaining inter-generational solidarity, the integrity of local government funding and a fair tax system.

Deputy Howlin said:

“The Independent Alliance is firing the first shot to fatally undermine taxation of wealth in Ireland by seeking large exemptions. With the failure of their populist ‘granny grant’ proposal, they are obviously seeking other ways to boost their popularity without any thought to the consequences.

“Local Property Tax is designed to be as fair as possible, with those in more exclusive dwellings paying more. Anyone who cannot afford to pay due to a low income is able to defer payment. Even 20 years of LPT deferrals would be a relatively small amount relative to the value of a house at the point of sale or inheritance.

“However, there is a case for reviewing the interest rate that is placed on the deferred amount, which should now be aligned to the lower loan rates being given under the Rebuilding Ireland programme.

“We must avoid a situation like in the 2000s, where tax breaks and exemptions caused the whole tax system to be vulnerable to the economic crisis. Once any group is given an exception to Local Property Tax, other groups will seek tax breaks too until both wealth taxation and local government funding is significantly undermined.

“Labour wants local people to influence whether or not LPT is raised or lowered in their own areas. This is about local councils being given the responsibility to make decisions about whether or not extra money should be raised and, if so, what projects would be funded.

“Local Property Tax is essential for local councils to deliver road repairs, street lighting, playgrounds, public parks and many more local services. Local people should be given more say over what needs to be funded in their areas. The Independent Alliance is proposing to cut local government funding without any indication of how that would be replaced, which would lead to a reduction in local services.

“Organisations like the OECD are pointing to the value of wealth taxes, such as property tax, to re-balance national tax systems and to reduce wealth inequality. The Government should resist the populist demands of the Independent Alliance and not undermine local government.”