Labour told to spell out cutbacks as it plans lower taxes
Published 03/02/2014 | 02:30
Fine Gael minister Leo Varadkar has put it up to the Labour Party to say what services it will cut at local government level as it backs lower property taxes.
Labour is planning to gazump its Coalition partners in Fine Gael by making cuts in property tax the central plank of its local and European elections campaign.
Councillors will have the power to increase or reduce the level of property tax in their area by 15pc, provided the budget can be balanced elsewhere.
The measure is expected to make property tax a key issue in this May's local elections as councillors will be under pressure to say what they will do to cut costs.
Mr Varadkar said he was also in favour of reducing the property tax rates.
But the Transport Minister pointed out that Labour usually prefers higher spending to tax reductions.
And Mr Varadkar said a plan to reduce tax revenues has to be matched with a pledge to cut spending or make savings.
"If you want to cut the property tax, you need to commit to lower spending," he said.
The coalition parties are going it alone in the local and European elections and running their own entirely separate campaigns.
From the start of next year, local authorities will be allowed to vary the property tax rates by 15pc of the national central rate.
Tanaiste Eamon Gilmore confirmed his party will campaign to reduce the property tax burden, as revealed in yesterday's 'Sunday Independent'.
"The Labour Party supports that and we will be making that clear to people," he said.
"The Labour Party will pursue this policy," he added.
Labour is seeking a catchy policy to shore up its support at council level.
The move on property tax is likely to play well in particular in Dublin, which has been described as representing "Labour's Stalingrad" in this year's local elections.
Mr Gilmore indicated yesterday that the ability to adjust property tax would impact on householders in larger, urban areas where property values are higher and therefore homeowners are paying a higher amount of property tax.
But the measure is also likely to intensify tensions within the Coalition, particularly amongst the more rural wing of Fine Gael.
Not every council is going to be able to afford to reduce the property tax, but councils with large populations will have more funding.