Taoiseach Brian Cowen told the Dáil today the Government has made no decision on whether or not to introduce a property tax in the next budget.
During leaders questions in the House, Mr Cowen said “there are issues in relation to a site value tax mentioned in the programme for Government” and reminded deputies that the commission for taxation admitted the need to widen the tax base.
However, he said it is “a budgetary matter that will be decided at the time” and that no decision had been taken.
Mr Cowen was responding to questions from Fine Gael leader Enda Kenny.
Mr Kenny described plans to introduce a property tax in this year’s budget as “grossly unfair”, saying he would oppose any move towards its introduction.
He said less than one in ten of the recommendations from last year’s An Bord Snip Nua report had been implemented and there is “plenty of scope” to reduce borrowing in other areas.
Colm McCarthy chair of an Bord Snip Nua has in teh past recommended property taxes.
Mr McCarthy said: “We’d be much better off with a regular annual tax on residential property rather than a huge and unstable once off bill in the form of stamp duty.”
Mr Kenny called for clarity from the Government on the issue saying “families cannot have any confidence unless there is some sense of security and clarity about the future of their family incomes”
Mr Cowen responded by saying the introduction of the tax “would represent a major structural change in the taxation system”.
He said no decisions were being taken in relation to these matters and that the Government will consider its budgetary strategy “in the normal way”.
Sinn Féin’s Aengus Ó Snodaigh said both Fianna Fáil and Fine Gael are willing to “target vulnerable sectors in society to fix the economic crisis”
He said: “While Brian Cowen looks at a property tax which would in all likelihood be a flat tax that disproportionately affects the less well off, Enda Kenny’s only response is that he should implement the McCarthy report in full.
“This report should be burned for the piece of rubbish it is,” he added.
Later Labour leader Eamon Gilmore said the Government must order banks to start lending to smaller businesses fighting for survival in the credit squeeze.
He said more than half of traders around the country are being snubbed by lenders that were bailed out by taxpayers.
Despite being handed billions of euro from the public purse on the condition they help keep small and medium-sized firms afloat, most businesses are being turned away at the bank doors, said Mr Gilmore.
“They’re told not to bother, they are told to go away,” he said.
“They don’t even see the bank manager or officials - they’re sent packing with a flea in their ear.”
Mr Gilmore referred to a survey by Isme - which represents thousands of small and medium-sized enterprises - which showed 55 per cent of their members were refused credit in the last three months.
The banks “two fingered response” to repeated demands they start lending again was putting thousands of jobs at risk, the Labour leader warned.
“Let’s get this straight, the banks have got the money and they’re not going to give it back,” he said.
“Having got the commitment from the taxpayer, the Government should now, in no uncertain terms, be telling the banks that they have to lend to small and medium sized businesses - that’s why they got the money.”
Responding to criticism of the Government’s role, the Taoiseach said the whole purpose of the recapitalisation was so banks could continue lending.
Mr Cowen said both Bank of Ireland and Allied Irish Bank - the country’s two main lenders - have been asked to provide €3 billion each for new or increased credit facilities this year and in 2011.
“That has not yet been met as far as Government is concerned and we continue to engage very directly with those banks,” he said.
Additional reporting PA
