Budget 2022: Taoiseach says he will protect people from rising cost of living – while Varadkar defends new property tax
Budget 2022 will help protect citizens from the rising cost of living, said An Taoiseach Micheál Martin.
r Martin admitted that next year’s budget “can’t do it all,” but seeks to help so many people without overheating the economy which is already experiencing inflationary pressures.
The 4.7 billion euro package was seen as something small for everyone, but the Taoiseach said the aim was to increase income and lower costs for those who have it most. need.
“This budget cannot do everything, but it is certainly about protecting people from increases in the cost of living,” Martin told Newstalk Breakfast.
“And this is particularly reflected in housing and health, education, child care and various increases in social assistance.
“If you take all of this together, for many families, this represents big increases in income and reductions in costs,” said Martin.
The Taoiseach acknowledged that more needed to be done in areas such as child care and housing, and admitted that not everything could be tackled in the next 12 months.
” I recognize that [a freeze in childcare costs] in itself is not enough – and that next year we will have to do more in terms of next year’s budget, to improve the affordability of child care.
“The state provides well over 700 million euros for child care, but I recognize that this is a huge problem for many families.
“The pressing issue for providers, and indeed for the system in general, is to attract people into the industry and then retain them through a significantly improved pay and terms environment.
“The overall situation around child care is one that I think represents a significant change in direction – and it will continue until we get the right results,” said Martin.
While most people will see a slight reduction in their tax bill for 2022, Martin, this is only a “modest” benefit for workers.
“There will be general relief for workers – again, modest, as there is not much we can do in this budget package.
“We didn’t want to overheat the economy. It is bouncing, there is significant activity there.
“Inflation is happening globally, it is having its impact in Ireland – it would make no sense to reduce people’s purchasing power by simply overheating the economy with too many allowances,” said one Taoiseach.
The Taoiseach spoke as Tánaiste Leo Varadkar defended the government’s decision to introduce the new zoned property tax (ZLT), saying it warns land grabbers “on guard”.
Mr Varadkar said the annual tax of 3pc would apply to landowners of almost half of the zoned land in the country, which equates to 8,000 hectares.
“We say to people and businesses who own zoned land, which could be developed for housing, ‘you have been warned. You have two years to get a building permit for that land, to get construction if you have a permit, and if you don’t; you are going to face a tax and that will have an impact on the profits you thought you would make, ”Tánaiste told RTÉ’s Morning Ireland.
Mr Varadkar said this was not a tax cut for landowners as it is a separate tax from the abandoned sites tax, which will continue at 7pc per year for those who pay it.
He said the purpose of the ZLT was not “to make money, but to send a strong message to landowners that if you are sitting on zoned land that is serviced and can build housing. on it, then you have to, or we’ll seriously eat away at the profit margin you thought you’d get, ”Varadkar said.
The co-leader of the Social Democrats Róisín Shortall criticized the ZLT, calling it a “total evasion”.
In the Government Pathway to Increasing the Supply of New Housing, the new tax was described as a “new tax to activate vacant land for residential purposes”.
Speaking on RTÉ’s Primetime, Deputy Shortall said that “the previous sample, assumed for vacant sites, up to 7pc, has not been collected.
“There were € 21,000 collected. There was 21 million euros owed on this.
“Land hoarding is a major factor in the high cost of housing and the government refuses to address this problem in any meaningful way,” she said.
MP Shortall added that charging just 3pc on the tax – which doesn’t kick in for two years – is “completely meaningless”.
Speaking on the same program, Fianna Fáil Laois-Offaly TD Sean Fleming said the vacant site tax was not working because it was not collected by local authorities.
He said the new zoned property tax will be managed by the Revenue Commission which has a “95-96 pc” success rate in collecting local property taxes.
“This is going to be done by the tax commissioner and it will be collected once the tax commissioner is involved.
“But really, we don’t want to have to collect it all. We want to tell people who have zoned land at the end of urban areas, if you don’t use it to build a house or sell it to someone else who will build houses, you will pay the tax, ” did he declare. .
Mr Fleming added that work was still underway to finalize the parameters of the tax, which MP Shortall called “a long fingering”.