Finance (No. 2) Bill 2007: Second Stage
Mr. Norris: It is a pleasure to have the Minister in the House because he is as always intellectually vigorous and robust although he may be a trifle partisan. It was lovely to hear him making minced meat out of the principal Opposition party but he did it in a selective way-----
An Cathaoirleach: I ask the Senator to speak to the recommendation.
Mr. Norris: I am speaking directly to the recommendation. I am conscious of the strict discipline, the Cathaoirleach's firm lash, under which I operate.
As Senator O'Toole said, it was not just the principal Opposition party which created the confusion. Mr. McDowell added to this and the Minister's party is not entirely guiltless in this respect.
In his Budget Statement the Minister stated, "In the current market situation, any stamp duty cuts would more likely than not be incorporated in the sale price and so end up in the pocket of the seller." This sounds like a very clear commitment not to tinker with stamp duty. I note the Minister is shaking his head but he is shaking it so feebly-----
Mr. Cowen: What cuts in stamp duty did I subsequently introduce?
Mr. Norris: But this is what the Minister is now proposing.
Mr. Cowen: There are no cuts.
Mr. Norris: The Minister is tinkering with the stamp duty.
Mr. Cowen: I am extending an exemption.
Mr. Norris: Exactly. I am amazed the Minister can make those comments without blushing because his used to be the party which talked about representing the plain people of Ireland.
Mr. Cowen: The Senator is a man who insists on preserving the meaning of the English language.
Mr. Norris: Absolutely.
Mr. Cowen: The Senator should read the sentence again.
Mr. Norris: We are talking about the plain people of Ireland. I represent them too and perhaps more effectively than the Minister does now because he gave every appearance of giving a commitment that stamp duty would not be removed because it would go into the pockets of the seller. We are not talking about my understanding of it or the Minister's but about the understanding of the people his party claims to represent. I have a desk full of letters from people stating that their whole attitude towards buying was affected by what they understood was a commitment not to do anything about stamp duty, that they bought because they thought nothing would happen and that they are now caught.
Since the Cathaoirleach wishes to keep me within the confines of the amendments, I would be very happy to second Senator O'Toole's amendments if necessary.
An Cathaoirleach: It is not necessary on Committee Stage.
Mr. Norris: If it is not necessary, I will simply add whatever little moral and intellectual value I have on this issue. I have a sheaf of letters from people who wrote to me stating that they bought on the understanding that they would not benefit by waiting. There is a moral obligation on the Government to backdate this measure to the time of that commitment. The Minister can engage in whatever political readjustments of his sentiment he feels necessary. I have a degree of sympathy for him because I clearly remember what was said in the budget. It may be subject to gloss, interpretation and so forth but I have no doubt where the Minister's heart and mind were at that point. I felt sympathy for him when the Taoiseach popped up at the Ard-Fheis and made mince meat out of his position. I am not alone in that. The Minister may think I am naive and inexpert in the English language-----
Mr. Cowen: The Taoiseach never mentioned stamp duty at the Ard-Fheis. The Senator should be accurate.
Mr. Norris: According to the commentators, he certainly undermined the Minister's position very clearly.
Mr. Cowen: He did not. He never mentioned stamp duty. The Senator should look at the record.
Mr. Norris: Let us put all that aside and just say the people of Ireland believed they had a commitment. There can be as much wriggle as the Minister likes. I know the Minister's constituency well because my roots are basically in the same bog and I know what people are saying down there. People who were unlucky enough to have bought houses are now faced with this. I am glad the Minister has made this change and I appeal to him to backdate it to the time when the plain people of Ireland, who his party always claims to represent, believed, erroneously or not, that they had a commitment that there would not be a change.
Since the Minister raised all these questions, it would be good to have a full look at this issue although I accept this is not the place for it. It seems to be very unfair with the price of houses now and the fact the banks have lent enormous amounts of money, including 100% loans and so on. The Minister might also look at advertisements. I cannot understand all the conditions because they are written deliberately to confuse people, including all the stuff about repossession. We now face repossessions and negative equity. There have been eight jumps in interest rates over the past two years and there is no doubt that people are in difficulty. Will the Minister look at graduated stamp duty next time? It seems terribly unfair that somebody who pays €300,000 for a house - I do not have the exact figures - does not pay stamp duty but somebody who pays €301,000, pays stamp duty on the lot. People should only pay stamp duty on the difference. It would be very useful if the Minister looked again at this issue.
I am happy to support Senator O'Toole's amendments. I support them in preference to the Fine Gael one. The Minister was gracious enough to say I had a nodding acquaintance with the English language.
The language in which the Fine Gael amendment is couched is a little lengthy, wordy and represents opaque legalese. While it is very often necessary to use such language in legislation, Senator O'Toole's amendment is appealing in its clarity, simplicity and relevance to the concerns of a considerable number of people. I understand that it is not possible to appoint a cut-off date which does not severely affect the unfortunate people who are on just the wrong side of it, but the people of Ireland understood they had a commitment.
The Tánaiste is an honourable man - I do not impugn his honour - but the people understood that Fianna Fáil would be resolute and would not tinker in this area. Suddenly, however, the ground was cut from under the financial section of the party and the Tánaiste's Department. The decent, moral and popular policy now would be to backdate the provisions in the Bill in the manner suggested by Senator O'Toole. I appeal to the Tánaiste to adopt that course.
While the construction industry is a very important engine in our society, it is one on which we can be overly dependent. I was very glad to hear the Tánaiste indicate as I came into the House that he will regard it as part of his brief to look into diversification and that we should not be overly dependent on this area. It is not a market that can infinitely expand without dangerous consequences.
Mr. Norris: If the Minister is pointing his finger at me, I did not say that.
Mr. Cowen: I am referring to the stereotype that is often attributed to the party-----
Mr. Norris: Not by me.
Mr. Cowen: That would be an argument in favour of accepting the Opposition proposal of €600 million at full implementation - whenever it would decide how to implement it - at a minimum of three years for the benefit of 45,000 or 50,000 people to be paid for by 2.15 million other people who were not in the process of buying a house at that time. This is not an equitable situation or a properly thought out proposal. A Minister for Finance does not have the luxury of speculating in this way. He or she must consider all of the issues with regard to how he or she might help by way of taxation.
I respectfully suggest that dealing with the inequity which exists in our PRSI system whereby a millionaire pays the same as a working couple on €48,800 would provide a greater social benefit. A better way of expending tax expenditure would be through tax reform rather than this particularly ill-thought out proposal, however well-intentioned it was. I can give a benign interpretation by suggesting it was well-intentioned when really it was a vote buying attempt by the Opposition to win an economic argument it knew it could not win.
Mr. Norris: This is Senator O'Toole's amendment.
Mr. Cowen: I will not have my honour impugned in any way in respect of my efforts in this matter.
I will get rid of another canard. The Taoiseach made no reference to stamp duty in his Ard-Fheis speech. The suggestion by anybody that disagreement occurred between the Taoiseach and I on this matter is incorrect.
Mr. Norris: He did it at the same time on RTE.
Mr. Cowen: Furthermore, as a matter of fact-----
Mr. Norris: The Tánaiste should consult the Internet. Does the Tánaiste state the Taoiseach never did this?
Mr. Cowen: I am giving Senator Norris the facts.
Mr. Norris: When did the Taoiseach state it?
Mr. Cowen: I have no problem with giving the facts. Senator Norris may contribute after me if he wishes.
Mr. Norris: I will be very brief as I am interested to hear what the Minister has to say. First I should say I am not impugning the Minister's honour at all, as he seems very tetchy on that.
Mr. Cowen: I am not.
Mr. Norris: Indeed he was.
Mr. Cowen: I am not.
Mr. Norris: I would not have to be a professional physiognomist to read the Minister's face, I can assure him.
Mr. Cowen: I am not. It is just that the Senator gets away with those charges too often.
Mr. Norris: Not at all, go on out of that. I would not accuse the Minister of consistency anyway because he tried to blackguard me-----
Acting Chairman: Senator Norris.
Mr. Norris: -----from my decent parliamentary interruptions and then he riddled that poor lad-----
Acting Chairman: Senator Norris.
Mr. Norris: ------with interruptions himself. So I am not expecting consistency from him and we did not get it on the stamp duty issue either.
Acting Chairman: Senator Norris should defer to the Chair.
Mr. Norris: I beg your pardon.
Acting Chairman: I should point out that if the Minister is to make a reply he will need to do so quickly.
Mr. Norris: Absolutely. We can argue the case any way we want but there is no doubt there was a change of position. The Minister has stated it is reactive but that is not particularly good Government. All we are saying is in justice, and to use a phrase dear to the heart of the Soldiers of Destiny, in fairness, some people were given the impression there would be no changes. There has been a change in the stamp duty regime and people were caught out. It should be backdated to that period.
There is a phrase, "The lady doth protest too much." I think the Minister blustered a little bit too much and I think I touched a bit of a raw nerve. I have no doubt, as a consumer, that the Minister's position was undercut by the Taoiseach, one way or another. Many other political consumers felt exactly the same way.
Mr. Cowen: No matter what I say, one way or another the Senator will hold that view anyway as he clearly does not believe what I have to say about it. That is fair enough and at least we have cleared that up. From the Senator's perspective, he will maintain that myth regardless of what I say. Similarly, my position seems to be misrepresented by the Opposition because that is the only way it can argue the matter. That is fair enough. I thought the idea of coming to the Seanad was to clarify issues rather than people continuing to throw brickbats on the basis that I was in a position I certainly was not in.
Mr. Norris: We should expect a few red herrings and white elephants.
Mr. Cowen: That is the first point but I will quickly get to another. Everything we have done here is prospective from the date of the announcement. In the normal course of events we would announce this on budget day. That it is prospective is a fundamental. That is the case with all tax changes, which are prospective from the date of the announcement. We were not in a normal situation because we were in the abnormal environment pre-election, and people got into arguments.
To stick to the point, I am putting forward a proposal for enactment which is prospective from the date of the announcement. [Mr. Cowen]
I left it at the shortest possible period in order to avoid any speculation between announcement and enactment. That would have been the case if, as is normally the position, we were dealing with this matter on budget day.
The lesson to be learned, in order to avoid any confusion in the future, is to ensure that these debates take place in a budgetary context so that a Minister of Finance, regardless of his or her political persuasion, who wishes to make changes to the social welfare code, the tax code or whatever may do so from the day of the announcement or from a later date but not retrospectively. For that reason and regardless how well-intentioned they might be, I cannot accept the recommendations from the Senators.
I made the announcement in response to a situation created by others. My announcement was prospective from the date on which it was made - 30 April - and came about as a result of a recommendation from the Revenue Commissioners who state in their guidance notes that deeds must be presented within a month of execution. In technical terms, therefore, the date included in the Bill is 31 March, whereas the political announcement related to 30 April. It is prospective and not retrospective. I cannot, therefore, accept recommendations which seek to introduce a retrospective effect to the announcement I made, which, in the normal course, would have been made and enacted by means of financial resolution on budget day.
Acting Chairman: As it is now 6 p.m., I am required to put the following question:
That notwithstanding anything in Standing Orders, the Bill is hereby read a Second time; the sections not disposed of are hereby agreed to in Committee; the Title is hereby agreed to in Committee and the Bill is accordingly reported to the House without recommendation; that Fourth Stage is hereby completed and the Bill is hereby received for final consideration; and that the Bill is hereby returned to the Dáil.
