Property tax returns to the agenda at crisis budget talks

A PROPERTY tax raising up to €1.1 billion was back on the table as the Cabinet met today to hammer out a €5bn crisis budget package.

A backbench rebellion forced ministers to abandon moves for a return to a household levy last year, but the scale of the fiscal emergency has seen the controversial initiative return to the agenda.

A special Cabinet meeting at Farmleigh is tasked with drawing up plans to cut the hole in national finances by some €4.5bn to €5bn in the December 7 budget.

Children’s Minister Barry Andrews warned education and welfare would face the budget axe, on top of up to €1bn already signalled to be taken from health spending.

“The choices are going to be very difficult. It is going to be painful for people in receipt of welfare. It may have a detrimental effect on some of our educational provisions,” he told RTÉ.

The proposed property tax scheme would be based on self-assessment bands and could raise €1.1bn over the next year, according to Government sources.

Water charging is believed to be off the agenda as it is seen as politically unworkable without a metering system in place to ensure greater fairness.

Ministers gathering at Farmleigh, and for another marathon Cabinet session tomorrow, will also decide whether to hit both bands of income-tax payers with increases, or concentrate on higher earners.

Moves to bring more low-paid workers into the tax base will also be thrashed out.

A Cabinet row about the level of cuts to be imposed on the capital building programme is also brewing as some ministers fear plans to slash the infrastructure programme by €1.5bn instead of the previously signalled €1bn will have a deflationary impact on the economy and hurt growth rates.