Tuesday 21 October 2014

Householders and candidates will share future fear factor

Comment

Published 05/09/2014 | 02:30

House prices are continuing to rise
House prices are continuing to rise

The big thing about the politics of the property tax is the "future fear factor". Many householders, lucky enough at present to have work and income, will look at their current bill and conclude they can live with it.

But a big group of those same people will take a second look at the bill and reflect on where things might be seven or eight years from now. Will they still have a decent income? What will property values in their area be like?

Will they be able to pay a much heftier property tax, along with other increasing outgoings like health insurance and water charges? It is not too much of a caricature to say that this one divides largely, though not exclusively, along east/west lines.

Property values are rising again, not just in Dublin but in the surrounding commuter-belt counties and we can expect more of the same in the few other bigger centres like Cork and Galway. For many people in these places the prospect of a 15pc locally-driven property tax reduction will become a significant political issue.

At the same time, only the most self-absorbed and mean-spirited of people would challenge the right of smaller and poorer counties to basic local services. The gap caused by their lower local tax revenues must be bridged. And there is no need for east to be set against west or city against country on that or any other matter in this little country.

The principle of allowing local councils vary the property tax by the potentially significant rate of plus or minus 15pc is a good one. It could bring a beneficial focus by people on the work of their local council. But a theoretical power for councils to increase or cut taxes is not much use if those councils do not have the funds to do that.

The unveiling of the new local government funding scheme yesterday did have at least one virtue. As the first big outing for newly-appointed Environment Minister, Alan Kelly of Labour, it was devoid of the melodrama of the Fine Gael-Labour clashes on the issue earlier this year.

The rhetoric engaged in by then-Labour leader Eamon Gilmore, as he effectively accused Fine Gael of trying to deliberately sabotage his party's Dublin local authority vote, was extremely divisive. The reality is that this issue has the potential for all parties to win or lose votes in all forthcoming elections.

Alan Kelly's exposition yesterday was much calmer. But this is uncharted territory and we must await the reality of its effect on local council budgets before we can make a clear budget.

The jury is out on Environment Minister Alan Kelly's local tax re-distribution scheme and the stakes remain high ahead of an approaching general election which will be all about voters' pockets.

Irish Independent

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