There is no firm timescale for the introduction of a property tax despite the measure being recommended as a way to help the Government’s address its fiscal deficit, a senior minister said today.
Minister for Trade, Enterprise and Employment Batt O’Keeffe refused to be drawn on the introduction of the tax today, which is one of the key recommendations of the Commission on Taxation’s report on the reform of the tax system.
The tax was also flagged in today’s economic forecast by the Economic and Social Research Institute (ESRI) as a means to help the Government raise €3 billion in savings.
Last week, senior sources within the Government told The Irish Times the tax was off the agenda in the context of this year's budget.
When asked why there were no plans to introduce the tax, Mr O’Keeffe said the Government is currently looking at capital budget for next year and said the process was incomplete.
Of the €3 billion in savings being sought, Mr O’Keeffe said: “"e have indicated already we are going to take €1 billion out of our capital budget.”
With regards to the remaining €2 billion, the Minister said there were “flexibilities” arising from the Croke Park agreement. “We’re hoping that will deliver significant savings over time”.
Mr O’Keeffe told RTÉ’s News at One the Government will look at “every aspect” of the budget to achieve its targets.
He declined to state when asked whether he thought a property tax was a good idea. “At this point in time, I’m going to deal with the facts as they are presented to me by the Minister for Finance and as a Government we’ll take a unified decision on what is the best way forward to make sure we meet the target that has won international acclaim for us”.
Earlier today, Taoiseach Brian Cowen emphasised the need to portray confidence in the ability of the country to take the necessary steps to emerge from recession.
Speaking from New York, where he is meeting with US firms and financiers to encourage investment in Ireland, Mr Cowen said investors “need to know that we believe in ourselves in a way they believe what we are doing is the right thing”.
Mr Cowen said the some of the negative commentary in the media about the country's economic path “concerns” him. "There are people I’m speaking to who have already invested in Ireland and they have confidence in the overall macro-economic decisions we are taking.
The Taoiseach contrasted this with the perception of Ireland abroad. “There is confidence abroad about the direction we are taking but I do think it is terribly important at home that we recognise we have to portray confidence ourselves," he said.
"We know they cause hardships and difficulties but it is absolutely imperative that we reflect that confidence at home in our own domestic arena and show that we are determined to do whatever we can do within our control to get us through this difficult period.
“Of course we mustn’t put our heads in the sand, but there are areas of success, there are issues we are dealing with, there are businesses out there increasing their exports,” he said.
Mr Cowen said he was not worried about the ESRI report published today that predicted the Government’s budget deficit in 2010 to run to almost 20 per cent - the largest in the 27-member EU.
The institute changed its previous forecast following a decision in April by Eurostat, the EU’s statistics agency, to classify as expenditure, rather than investment, money given to Anglo Irish Bank to prevent its collapse. As the ESRI sees no reason why forthcoming payments of €12.9 billion to Anglo Irish and Irish Nationwide would be treated any differently by Eurostat, it felt obliged to reflect this in its forecasts.
The institute made clear that this accounting reclassification was the sole reason for its changed deficit forecast, from 12 per cent in April, and that the underlying budgetary position for 2010 is stabilising as anticipated in its previous forecast.
However, the Taoiseach said the money to be paid to the banks has been factored in by the markets and we have to wait to see what the technical classification of the money will be. “It is a once-off payment in respect of this particular year. None of us regard that as being something to be welcomed but we have to deal with it.”
Mr Cowen will open a new Irish Consulate General in Atlanta later today. The facility will serve seven southern states and will be headed by Paul Gleeson, the former first secretary for Anglo-Irish affairs at the Department of Foreign Affairs.
