Brian Stanley: Warns LPT Changes Threaten Local Democracy

Thank you. The Local Property Finance Bill 2025 will comment directly on that in a few moments. Obviously it has been brought forward to raise more money, but just a couple of things for context. The abolition of rates by Fianna Fáil in 1977 completely removed the sustainable source of funding for Local Government. While an election was won on the back of it, in fact, a landslide victory was won on the back of it, not long after that, the incoming Government increased taxes. I remember it at the time, watching your pay packet evaporate. The shortfall was made up by heaping more tax on top of workers, and that wasn't the way to go either. So while there was a short-term benefit for the Government coming into power, getting into power and having power and having finances, it leaned harder on ordinary workers. Not having control of finance completely impedes councillors in their role and what they are supposed to do and perform their functions. Taking away that function of taking away the rates base in 1977, it completely undermined local democracy. However, the problem is with local property tax, there are a number of issues around it, is that it lacks transparency for the public and how it is spent and divided up or allocated. The reality is as well that within local councils, is management of councils take the lead in terms of how it is divvied out and will tell councillors what they can do and what they can't do and why we must put money into this area and that area. A certain amount of arm-twisting in terms of getting budgets through, councillors in reality get very little say over it. The other big problem with this is the means of the owners. LPT as it was introduced in 2012 2013, it takes no account, no account whatsoever of the income of the owner. So you could have somebody in a house worth half a million or 0.6 or 0.7 of a million, but maybe on just a single estate pension, you could have a widow or a widow living on a estate pension, with very little, very little disposable cash income in terms of paying it. So if you look at Unleashed last year, as it was projected, there was the possibility as it is framed to raise €11.6 million with the total could be realised. That was up €3.1 million. But residents need to be told more clearly, Minister, what to get in return and that is a real issue. We must also remember that people who own their own house, they are already in Lockhees have pled stamp duty, they are paying high mortgages and the LPT, local property tax, turns out to be a tax on debt in some instances. They still have to fork out for services that were privatised, refuse collection. More and more families are having to dig deep into their pockets to fund the running of schools. Just the basics for schools, keeping the lights on and the heating going and basic work done on the school, that is what is happening throughout the country. At the moment, a lot of schools are on overdraft. Indeed, INTO representatives told me and I am sure they told others last week here that a substantial number of schools are running in the red. That is not sustainable in the long term and that needs to be addressed in the budget. The capitation grant, well there was a very modest increase in the last year, it is still way behind for primary schools where it needs to be. I would ask that that be addressed in the budget. The concerns I also have about the bill, while section 4 and section 5 are welcome in relation to the exemptions for defective concrete blocks and the ability to claim a six-year exemption, they are welcoming themselves because obviously the people who have been affected by that are facing enough difficulties. However, when we go to section 7, that provides for a new charge of methodology for LPT. All valuation bands are widened by 20 per cent, which looks okay on the face of it, but band 1 has been increased from €90 to €95 at the baseline with the potential to increase by 25 per cent on top of that. This is one that I was reading with some interest, that the basic rate is also said to be decreased from 0.1029 per cent to 0.0906 per cent, which will apply to properties valued up to 0.126 million. So that could mean that somebody who would have a good income and somebody who is fairly well off and living in a house worth £1.25 million could actually do quite well out of this in comparison to workers who are in a family or in a home worth £300,000 or £250,000 or £400,000. I am not sure of the rationale for that, but certainly on the way it is framed in the bill, it looks like this is going to benefit that cohort of people who happen to be in a house worth up to £1.25 million and also have a very good income. I think the other area of concern is that while the variations are allowed in it, they are allowed up to 25 per cent, that is to increase, but the reduce is only 15 per cent. Looking at the list for the last couple of years, you can see that a lot of local authorities, including LEASH increase by 15 per cent. So are those who are going to feel the brunt of the extra increases in terms of the bands and the rates that are being changed, are they also going to be facing 25 per cent in October when it comes to framing the budget? I just think that needs to be factored in. The main point, Minister, is that in an ideal world, local authorities need to be able to raise some money themselves. PAYE tax was increased dramatically, and those who were working throughout the 70s and 80s will remember this. The corresponding increase was for PAYE workers to take the hit when the rates were abolished. It did destroy local authority, their remit and local democracy, unfortunately. In the ideal world, you would have a sustainable fund on that local level, while taking into account the needs of workers. The key point here is in relation to the LPT, as it has been framed over the last 12 years, there is no account taken whatsoever of means, and that is simply not good enough. I think there has to be factored into it. Also the lack of transparency in how it is spent, and I would like to see improvements on that, and also the role of councillors, that councillors are giving a greater say. The other thing I would say to the Minister and local government funding, an awful lot of money in the last five or six years is going directly to projects, to the management team of the councils, and this is one that I want to flag up with you sincerely. This is a real problem. You know, there are projects that have been starting, and if you ask a local councillor, you know, where did that come from, they would say that, you know, we had no notice of that. You know, it did not come before the councillors for a decision. So it could be the Department of Arts, it could be the Department of Sports, it could be any department that is loving money straight down to local authorities. But there is no, the chamber of the local authority, which is the primary, primary essence of local government, that has been completely undermined. And when you, when you start undermining local democracy, you start undermining democracy overall, and I have real concerns, and I say this sincerely to you, I said this to Phil Hogan back here in the chamber in the first year I was here back in 2011, that I have real, real concerns about local government being undermined, and people not seeing local government as being valued and relevant, that to see what they are voting for, given that control. I think that if we continue undermining local government in the way we have been doing it over the last number of years, and I can rattle them off, as I am sure other people here in the chamber can, all the different functions that have been taken away from councillors in the last 25 years, I do think, I do think that we are going to further erode people's trust in local government. It is the nearest, it is the nearest form of government to the people. People generally know the local councillor, they can talk to the local councillor, the local councillor has access to senior officials, they have access to us, they can, you know, they can contact ministers, a group of them if they want to, which they regularly do, they have a right under the 2001 Act to make representations to statutory bodies and public bodies such as the ESB, semi-state bodies, HSE, et cetera, et cetera, and it has to be taken into account of it. And I just think, you know, instead of continuing to erode the role of councillors and local government, we need to increase it. But one area that does need to be tackled and dealt with by government at central level is that departments and department officials are not too sure of it as much Minister C, but senior department officials, there is money being transferred from various departments of government, it is going straight to local, it is going straight to local authority staff, senior management, and, you know, I am not saying most of those people are good as well, but the councillors do not have any say in how that is allocated or divvied out or used or monitored, and that is not a good thing to do. So that is my take on it. I think that there is the weakness in the system is that lack of accountability and the lack of fairness because of the means of the household are not being taken into consideration, and I would like to see the government maybe move to take that into account in future years. Thank you. Thank you. Deputy Prime Minister