The Government could have lost millions in tax revenues because of the advance notice that it was about to raise sharply stamp duties on commercial property sales, Labour's Joan Burton has said.
Large numbers of deals have been rushed through in the last 48 hours in a bid to avoid the 4 per cent increase in duty in actions that will cost the Exchequer heavily, “possibly billions”, she claimed.
She said she had never before seen such a commercially sensitive tax increase leaked days ahead of the budget, and it was “deeply troubling”, a “real error of judgment” by the Government, and she was “agog” at this.
The increase was voted on in the Dáil by midnight on Tuesday following a decision by the Minister for Finance to ensure a speedy vote rather than leaving the matter over to the Finance Bill next week.
The former Labour leader said she was aware of “devices that can be used to mitigate the tax, given the property sector knew about this, such as resting contracts and selling shares in properties as opposed to the underlying assets”.
Fine Gael's Phil Hogan resigned as a Minister of State 20 years ago when details of the budget that year were leaked by an official in his office even though he himself had not been aware of the mistake.
Mistakes
Criticising the tax rise, Mrs Bruton said depending on commercial property stamp duty revenues to pay for tax cuts and permanent spending increases was simply repeating the mistakes of the past and “laying the foundations of future crisis”.
Former Fianna Fáil finance minister Charlie McCreevy had “relied on stamp duty revenue and used it to pay for tax cuts and permanent spending increases” before the 2008 crash.
Ms Burton said “those policies of unsustainable tax revenues laid the foundations of Ireland’s ruin. Today, unfortunately, the Minister for Finance has been tempted to travel down the same path.”
She added: “One of the central lessons for Ireland from the crash was not to rely on transaction taxes on property to fund tax cuts and increases in current expenditure”, but “here we are today as history repeats itself”.
Labour jobs spokesman Alan Kelly described the budget as "a cup of coffee budget". Holding up paper coffee cup in the Dáil, Mr Kelly said that "we'll get a cup of coffee out of this budget, but in all seriousness that will be wiped away by the additional costs of living" including the mortgage interest relief reduction and the increased cost of community and childcare.
Poignant
Labour housing spokeswoman Jan O’Sullivan said that on World Homelessness Day it seemed “particularly poignant that the Government has not actually committed to any increase in capital spending on housing next year”.
Ms O’Sullivan said that “instead of directly funding the building of more social houses the Government has chosen to extend the HAP [housing assistance payment] scheme, meaning this much-needed funding will go directly into the pockets of private landlords”.
The Limerick TD added that it looked like the €750 million being diverted from the Ireland Strategic Investment Fund “looks set to become another vehicle for private developers, with no assurance that any housing built will actually be affordable”.
