Stamp duty reform 'won't hit public spending'

Opposition parties were today accused of making "facile criticisms" of Progressive Democrats plans to reform stamp duty.

The party's deputy leader Liz O'Donnell insisted in an address to the Network Ireland annual conference that the proposal would not come at the expense of government spending on schools, roads or hospitals.

"Predictably, the Opposition claim that to do so would mean less is to be invested in vital infrastructure," the Dublin South TD said.

"This, of course, is facile and anti-intellectual. When it comes to government spending, it is not either/or. It is not a choice between lower stamp duty and new schools, roads or hospitals. We can do both.

"We want to help first-time buyers and couples with children seeking to move home.

"Among the solutions being discussed by my party are the abolition of stamp duty for moving home, a reduction in stamp duty rates, banding stamp duty across the rates, and the option of allowing stamp duty to be paid over the lifetime of the mortgage.

"Given its impact on thousands of homeowners and would-be homeowners around the country, we believe there is scope for a significant re-adjustment."

The PDs believe stamp duty reform could be vote winner in next year's general election. The party discussed its stamp duty plans last month at a Dáil think-in.

However Green Party leader Trevor Sargent accused Tánaiste Michael McDowell of seizing the issue as a publicity stunt ahead of next year's General Election.

Ms O'Donnell told the conference in Galway the PDs saw tax reform as an instrument of social and economic justice.

"Our view is that when tax is fair, people are compliant," she said. "When tax is penal and unjust, there is always need for reform.

"In fact we still believe we can do more on tax. Use some of the benefits of economic growth to significantly reduce the tax burden on low and middle income taxpayers.

"Of course the majority of the benefits of economic growth must go to essential public spending, which should rise considerably faster than inflation. But a portion can and should be reserved to radically reduce the tax burden on lower and middle income workers.

"We propose that about 90% of the gains from economic growth will go to spending, but that the other 10% will go to tax cuts. This could be targeted on low and middle-income workers.

"We want to cut the top rate of tax to 40% and by increasing credits and bands allow a couple earn up to 40,000 euro tax free and up to 100,000 without paying any tax at the top rate."

Ms O'Donnell said the PDs had a record in government of delivering what it promised.

"In government, we cut the top tax by 14%, the standard by 11%," she said.

"When not in government, a miserly 1% was cut off the top rate.

"Small wonder then that the market is showing signs of anticipation of a change in stamp duty. People know we have credibility and that's good."