Poll tax to be replaced by property tax

This post was written by Richard Tol

According to this piece in the Irish Times, the Cabinet have copped on that there is little support for a poll tax. Maybe they have realized too that poll taxes are not terribly smart from an economic perspective either.

An expert group will now be established, to report in Spring. As this discussion is not exactly new, our submission is as good as ready. Ronan Lyons’ has made good progress with his, as has Karl Deeter (also on video). Let’s hope the expert group will take this advice to heart.

Last week, though, I got a number of phone calls from journalists about a plan by the chartered surveyors that everyone should get their house valued by them. That would be an unnecessary transfer of money from the general population to a small group of professionals. There are substantial databases on property values already (CSO, revenue, estate agents, etc).

CORRECTION: The chairman of Residential Agency Practice Group of the Society of Chartered Surveyors Ireland points out that they have never called for all properties to be valued. Apologies to all involved.

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81 Responses to “Poll tax to be replaced by property tax”

  1. Ordinary Man Says:

    Richard

    The link to the Irish Times is not working.

    Having read both your (et. al.) abstract and Ronan Lyons it is obvious that they contain way too much of that vital ingredient so sadly lacking in Government policy - economic and social sense.

    As for auctioneers valuations and the transfer of funds to a vested interest - well that would be a novel concept of policy formation in Ireland wouldn’t it.
    ;-)

  2. Gavin Kostick Says:

    With regard to property taxes, is a “hedonic regression” when we all go back to banging 80s style house parties because we can’t afford to go out any more? Not sure whether being near party central would be a plus or a minus.

  3. Richard Tol Says:

    @Ordinary
    Link fixed.

  4. Ronan L Says:

    It should be pointed out that great work has been going on in various government departments and agencies this year in the related fields of the land registry, spatial data and property registration, which actually makes a site value tax very possible in the near future.

    I’d be concerned about a straight property valuation tax, though, due to the perverse incentives it gives: e.g. it’s better to keep a site derelict than to redevelop it, it’s better not to make your home more energy efficient, etc. I could easily develop a property tax calculator for the government, to be used on an interim basis, based on four data points (suburb/village, property type, number of bedrooms and number of bathrooms) that gets it about 80% right. But calculating relative site values is actually even easier.

    I’ll have a paper coming out in late January that is effectively a much more thorough version of the blog-post linked to above, outlining a ten-band interim site value tax for each of the 4,500 electoral divisions and enumerator areas in the country. The idea is that this could last for up to five years while any remaining data issues (in particular putting Dublin records into the land registry) are resolved - any over-charging during that interim period could of course be repaid in the form of site value tax credits. Given that this is meant to be a local tax, there are other issues of local government reform but those are beyond my expertise.

    And to hopefully pre-empt a few questions, yes, if the Government so chooses, it can cater for all sorts of interest groups (such as wealthy but cash-poor “old dears”, or those who paid large amounts stamp duty during the bubble).

  5. ObsessiveMathsFreak Says:

    The Government is in a panic over this issue. First the fines, then the ill-advised fees from wages move, now this. I don’t see that they’ve resolved it with this one either.

    There is only one reason to introduce a property tax–to give governments a stable tax base regardless of the state of the economy. In this sense, the comparison to a poll tax is apt and I do not believe that the public will see it any differently, nor should they.

    That said, the government needs income. I think it would be better for all if they simply raised income tax, but apparently that would bring on the apocalypse and quite possibly mass ATM failure, so we’ll have to settle for a property/poll tax of some kind.

    Last week, though, I got a number of phone calls from journalists about a plan by the chartered surveyors that everyone should get their house valued by them. That would be an unnecessary transfer of money from the general population to a small group of professionals.

    This kind of transfer, to a lobbying professional organisation, is exactly how things are done in Ireland. Take a group which has already spectacularly failed to perform adequately, then save them from the consequences of their own actions and actually reward them by giving them charge over the very system they helped to wreck. It’s why we have NAMA after all.

    I would fundamentally be opposed to a “valuation” based tax, for the simple reason that property has no intrinsic value. It rises and falls based on waves of speculation. The council tax fiasco in the UK is more than enough evidence that this is no good way to run such a system.

    A square footage tax would be a simple, effective system if done right. The rates could be determined at a county or parish level. Such a system would be immune to over and under-evaluations of property and wouldn’t require an expensive, inaccurate and slow evaluations process. Other similar methods such as chimney, window, (tiled floor), (patio), (flat lighting), taxes could also be employed.

    A simple, accurate, indisputable system of is the only proper way to go about taxing property.

    P.S.

    Since property bubbles almost as large as Ireland’s happened in the US where there are extensive property taxes, I don’t accept the proposition that property tax helps prevent such bubbles, or that they would have done so in Ireland’s case.

  6. Gavin Kostick Says:

    @ Ronan, Karl and Richard

    From Karl’s article.

    “For these reasons a land value tax should be used as the main tax source for Local Government, whose main brief is the provision and management of infrastructure.”

    I’m a little bit unclear. Some of the articles (and the IMF) seem to be suggesting that the revenue goes to the exchequer and others that it goes to local council.

    Now if the sentence, “A property tax is need to…” is completed with “…provide ongoing high quality local services administered locally.” and not “…pay off half the cost of Anglo debts pa.” then I can see support for it.

    Also: @Paul Hunt, wouldn’t the empowerment of local councils to further control their own spending (making council membership more of an ends than a means), be a step towards the good governance you’re looking for?

    @ Ronan Lyons

    Thanks for the clip of the Poll tax demo. I was there. I remember it as a joyous, powerful and ultimately successful demonstration against an unjust and failing regime.

  7. Ronan L Says:

    @Gavin
    It could be done either way, but to generate the best connection between public money raised and spent it is better if it’s local, not central. Related to this, Ireland had when last checked the largest gap between % of public money spent by local authorities (about 45%) and % of public money raised by local authorities (less than 4%). This would be a key way of closing that gap - although clearly not a panacea.

  8. Sarah Carey Says:

    Regarding the valuations - who should do them?

    There would have to be some sort of appeals system - no?

  9. Dave, Dublin Says:

    Hopefully administration of the tax will be brought into the remit of the Revenue Commissioners rather than Dept of Environment. They have more resources as well as experience with dealing with the pitfalls of a valuation-based system. Although I can’t see them setting up an entity to value properties, they’ll certainly have system in place to assess anomalous payments.

  10. Richard Tol Says:

    @Ronan
    If a property tax is seen as a tax on the consumption of housing services, then upgraded houses should be taxed higher. This is a disincentive to upgrade, just as VAT is a disincentive to consume. Taxes distort the economy. We should aim for minimal distortion. We cannot have zero distortion.

    Besides, a hedonic property tax would not pick up renovations.

    @Sarah
    The chartered surveyors want to do the valuation. Undoubtedly, there are some in government would want to create a new quango or bring the Valuation Office back to life and fill it with loads of civil servants.

    In our proposal, the property tax is something like A + B*(county where you live) + C*(age of the house) + D*(size of the house). A, B, C, D can be determined by a small team working for six months, and kept up to date for a fraction of that effort. An advantage of our proposal is that it will be hard to dispute size, age, or location.

  11. Ronan L Says:

    @Sarah
    The Danish tax has a system of appeals, with three different levels, if I recall correctly. Their experience suggests that the first year sees the highest (everyone thinks they’re different) but that the vast bulk of these are successfully arbitrated at the first, non-formal level. Very few actually go to the highest level, the High Court (or its equivalent).

    The important point to remember about an interim charge (with a defined number of bands, such as the ten I’m proposing) is that these are determined by what Census district you’re in, so you’ve no wriggle room. The only variable up for discussion is the size of your plot, which could be based on the Land Registry (and GIS methods) or where that’s missing a one-off tax credit in the first year to enable an accredited professional to measure and register the size of your plot with the appropriate agency.

    The ultimate system of valuations would be based off a system of hedonic regressions that use all transactions prices (and perhaps other information such as agreed rents, advertised prices and advertised rents) that accounts for a wide variety of amenities and also regional variations in construction costs.

  12. Carlo Spiceyweiner Says:

    What happened to the long promised national property prices register / database, that would remove the need to have anyone do the valuation, you’d be merely sent the estimate which you could then appeal yourself depending on how many windows you had bricked up or whether you were that concerned that the Joneses were raising the angle of their nose rather more skyward then usual…

    Anyway, let’s save each other the hassle and just realise that this will be a no deal for the poor, a bad deal for those who profess themselves the middle classes and a great deal for those reliant on the kindness of strangers, i.e. the few remnants of the 1% who have not fled like the Earls of yesteryear…

    Will this property tax also supplant the 2nd property / investment stipend? Surely, if big Q himself can claim residency in another jurisdiction and every developer in the land suddenly is living in his missus’ gaff then surely, there will be some creativity here.

  13. Michael Hennigan - Finfacts Says:

    No wonder politicians prefer stealth taxes.

    Some 40% of Irish owner-occupied homes have no mortgage — quadruple the level in banjaxed economies such as the Netherlands and Sweden!

  14. The Dork of Cork Says:

    I think they should experiment with peoples historical memory.

    Tax houses based on the size of their windows.

    I am sure you would get very little response.
    It would be a more interesting experiment however - a test on how effective the powers of post war globalisation & mindless consumption has really been on the minds of Irishmen.
    Devastatingly effective I imagine - mindless automans are so much easier to tax don’t you think ?

  15. paulr Says:

    Ronan, Karl,
    What about all the apartments and homes where the local authority imposed Management Companies and who are paying very high costs already for the provision of ‘local’ services to private companies. (and MUD has not helped one bit because the owners were not listened or spoken too.)

  16. Ossian Smyth Says:

    In our proposal, the property tax is something like A + B*(county where you live) + C*(age of the house) + D*(size of the house)…

    With only these variables, a 4 bed, 100 sqm, near derelict ex-council terraced house on Sheriff Street would be taxed the same as a 2 bed 100 sqm detached mini-palace with half a hectare of gardens in Ballsbridge.

    Am I missing something here?

    Administrable? Yes - but grotesquely inequitable and hence uncollectable.

    The land value charge, proposed by Ronan Lyons, taxes inefficient use of land, a finite natural and national resource. His choice of many small census districts rather than counties to zone land values is more fair.

  17. Brian Woods Snr Says:

    What will you pay your tax with? Credit? What happens you no pay? Siezure of property? That would be fun. Effectively no one ‘owns’ their private residential home any more. This is funny.

    What am I paying for anyway?

    How about we ;

    1. Fix the Dáil - our Gov is an elected dictatorship

    2. Ombudsman - unfettered and immune from Supreme Court challenge

    3. Unfettered FoI

    a1: Impossible - Gov WOULD be accountable to parliament

    a2: Impossible - citizens WOULD be protected

    a3: Impossible - we WOULD get to the truth of things

    Now you dismantle our Local Gov. Its shambolic (ie: what AM I paying for?). That’s impossible too.

    So, just to pretend that our elected dictators are pretending to be ‘working on our behalf’, they just arrange to suck up some more non-disposable income. “Keep the FIRE burning, there’s a good chap.”

    Brian.

  18. ObsessiveMathsFreak Says:

    Tax houses based on the size of their windows.

    This is actually a much better way to go about taxing property.

    Tax things like windows, roof tiles. chimneys and fireplaces, patios, sinks, ponds, garden sheds ; tax marble worktops, floor tiles, wooden flooring, gardens, flower beds, and driveways by square footage; tax based on the number of bedrooms, bathrooms, doors, sitting rooms, kitchens, and attics.

    Taxation based on such quantifiable assets comes closer to a tax on the true worth of the property, and the true wealth of the owner.

    True, a dilapidated bedsit in Dublin’s inner city will end up paying less tax than 5 bedroom family home in Cavan; but shouldn’t this be the case anyway?

    A surveyor assessment based tax is asking for public discontent and for trouble. Tax based on quantifiable property assets is the proper way to go.

  19. The Dork of Cork Says:

    People should try to get their heads around what is happening here.

    I have no objection to property tax by itself but lets look slightly deeper shall we.
    A mortgage is a form of private tax most popular during the zenith of the market state.
    The more “successful” people paid for the badge of aspiration via how big their projection of perceived wealth was relative to someone else.
    Now the market state is dead or dying they want to reintroduce taxes more appropriate to nation states.
    The powers that be did not declare mortgages null & void as they were a artifact of a failed experiment , no not at all.
    They want people to continue to pay fradulent mortgages based on perhaps dodgy paper and now pay taxes as well.
    Meanwhile the IMF in its most recent publication talks about savings by reducing the states capital spend !!!!!
    So where exactly is this money going ?
    We are either operating in a market state or a nation state - this hybrid model has a even more extreme taste of failure.

  20. Ronan L Says:

    @paulr
    “What about all the apartments and homes where the local authority imposed Management Companies and who are paying very high costs already for the provision of ‘local’ services to private companies.”
    Apartments share a single footprint so have dramatically smaller site value tax charges than houses. The extent to which services are provided privately (and thus charged separately) and not publicly will be reflected in the price of the property and thus in the value of the land.

    The interim solution I will be proposing will be somewhat blunt on this point but the full tax could easily reflect this.

  21. Aidan R Says:

    @ Obsessive Maths Freak

    “Since property bubbles almost as large as Ireland’s happened in the US where there are extensive property taxes, I don’t accept the proposition that property tax helps prevent such bubbles, or that they would have done so in Ireland’s case”

    Very true. But, would a property tax not have prevented the dramatic collapse in revenue that occured during 08-09′? Or, at least mitigated the worst effects.

    NESC, and by default, the ’social partners’, called for the introduction of a property tax in successive strategy reports throughout the late 1990’s and early 2000’s, as a replacement for the radical reduciton in marginal rates of income tax.

    But, FF/PD were never going to introduce it given their preference for a low tax regime (or at least the perception of it). They choose, instead, to rely on taxes associated with the buying and selling of houses.

    I agree that a tax based on quantifiable property assets, in addition to a rise in income tax, is the way to go. The source of Irelands fiscal crisis has been and continues to be a revenue not a spend problem.

  22. PR Guy Says:

    All I know is €100 next month will be somewhere well north of that in 4-5 years time as more money is needed by government between 2012-2016.

    I’ve lived in the UK and France in the past five years and paid (for 2 bed flats in both places, excluding water rates - and these figures are probably higher now) £1,000+ pa in Norwich and €1,600 in Carcassonne….. + €250 per month for service charges! Who can be in any doubt that there will be a ‘target’ of something similar to our European neighbours in due course for this tax (I can already see the PR being churned out for each annual rise - “but it’s no more than anywhere else in the EU/below the European average…” etc.).

    The €100 next month is simply the thin end of the wedge.

    When I was in Norwich, I recall an old lady with no money being sent to jail because she couldn’t pay her property tax.

  23. Paul Hunt Says:

    @Gavin Kostick,

    Many thanks for the mention in the dispatches. And many thanks to Richard, Karl and Ronan for the effort you have put in - and are putting in - on this issue. I can understand the relutance to get embroiled in local governance issues, but, for me, these are absolutely crucial.

    There will be popular resistance to any new tax and an enormous amount of resources will be devoted (and frequently wasted) to querying and contesting the basis on which it is levied and on devising every trick in the book to evade, avoid or reduce the imposition.

    But I suspect that a considerable amount of the popular resitance will be fulled by the fact that some or all (nobody seems to have any idea about the possible allocation) of the proceeds will flow into the general government coffers. To the extent that the proceeds will flow into this ‘big pot up in Dublin’ people will be angered because they have very little say on how it will be spent.

    To counteract this justifiable anger and resistance, irrespective of the system of imposition on land or property that is devised eventually, the proceeds should be dedicated solely to the funding of local government service provision. Taxes paid in anger for local service provision are the best spur to ensure effective democratic accountability for services and spending.

    But does anyone think that this government - or, indeed, any government - would empower and resource local governance in this manner? Not a snowball’s chance in hell of it happening. We’ll get the usual half-arsed, half-baked fudge and it will be open season for the fiddle-merchants.

  24. Brian Flanagan Says:

    It is not too late to convert the household charge into a window tax. Using a three-bed semi with eight windows as the benchmark, the rate would be €12.50 per window. This would be more equitable, easy to assess and check and very transparent.

    Just need to define a “window” and add a “window box” to an online form.

  25. The Dork of Cork Says:

    @Ronan
    As far as I understand it your property tax proposals would make this country even more inefficient by rewarding the subrural / suburban dweller over the far less energy intensive urban dweller where services & utilities are most concentrated
    The Populations of Limerick & Cork city were the only areas to decline in the most recent census.
    This is a sort of anti - development that will subtract from final consumption.

  26. Sarah Carey Says:

    @Richard + Ronan

    First for shame, I should’ve actually read your submissions before asking questions - apologies.

    Second - I’ve no objection at all to a property tax, or water charges etc. This has to happen…..

    Third, I’d say Ronan is right- in the first year you’d have significant appeals and objections and then it would settle down.

    However, I think Richard’s ABCD model is too simplistic.

    B- For example, in Meath there is a huge difference between my village, Enfield, conveniently linked to Dublin by public transport and good roads: and the arse end of the county up near Cavan/Westmeath etc which is much more poorly serviced.

    The electoral division suggestion would solve this issue as it’s much more specific.

    C- Age of house - Meh. Not so sure on that one. Is the suggestion that an old house has a lower valuation? An older house would often be considered more valuable in many areas.

    D - Size of house - fair enough. No objection there…

    For my next point : Declaration: I come from a family of auctioneers.

    So I am familiar with the valuation process and your starting point is - what is the purpose of the valuation?
    For example - much was made of the valuation of the Bottle& Glass Site in the DDDA by John Mulcahy. But he valued that site for the vendor. The purchaser would have had their own valuation. A site can be worth much more to the person selling than the person buying - and visa versa. Property rarely has a set fixed value. There’s a price that can be got on the day, but that price maybe too low for someone to sell at and too high for someone to buy at. The actual SALE price depends on a wide variety of subjective factors - many psychological :)

    So, on these valuations what exactly are we trying to value?

    - The cost of servicing that site? if so, should the number of people living in it be relevant?
    - Does it use public services such as water and sewerage (many rural houses don’t (declaration: mine!) and we pay for our own servicing. Should we get a discount?
    - Or is it a method to estimate the value of that site to the owner, and should be related to that? In which case, the potential selling price each year is a factor?

    If it is based on the sale value - well then other things have to be taken into account. Is it beside a landfill dump or has a sea view? A small house on a great site might be worth more than a big house beside a smelly pig farm.

    I acknowledge that trying to get it too *too right* could leave us tied up in knots for years and cost far too much to implement but I wouldn’t be dumping the skills of those CS/Auctioneers JUST yet :) **

    I can see that in urban areas it is a much simpler process - e.g. in housing estates and particular streets - the houses will have a relatively standard value. But out here in the stix….bit more complicated…

    **coughcough- de brother being one of ‘em and all…

  27. VincentH Says:

    They have an opportunity to create a useful method of taxation with at least a nod to equity if they combine a degree of compulsion with a relationship to what something could realise in rents. That way farmhouses, shops and the residences over them along with whatever other categories that will have exemptions granted will pay relative to whet they might generate on the rental market.
    This way a pensioner living in Blackrock on a state non-con pension will pay to rents also and not vanish under some foolish mawkishness.
    Oh, I suppose it will be expecting way too much that some service be provided with the moneys raised and not have most of it vanish into the local government sawing sawdust. I am forever amased at the amount of ’stuff’ you find in even the smallest town on Europe.

  28. Sporthog Says:

    On reading the article two key points stand out,

    “The expert group, which will be chaired by a representative of the Revenue Commissioners”

    “Under the commission’s proposed scheme a charge of €188 would be paid on houses valued.. ”

    The Revenue Commissioners already have a valuation system in place for cars. But the key point is that it is a “notional value” which they place on the vehicle, when you present the car for valuation to get a Irish number plate you pay up to 33% of the notional value which they deem to be correct. Note that this notional value has nothing to do with the actual market value of the car. For example you buy a car for 1000e in N.Ireland. On importing the vehicle the notional value could be up to 4500e, of which 33% has to be paid in VRT tax, thats 1500e folks!!

    I believe the same scenario will happen with property. The house next door to you will be on the market for 10 months and it will not shift at 250K, you believe the house will shift at 220K. However the Revenue Commissioners will be free to impose a Notional Value on your property, which of course will be far higher than the actual market value of the house. So you will pay a annual property tax in the next higher band, not once, but each year, every year.

    After all if the public were willing to be ripped of with VRT tax on cars, they should be prepared to be ripped off with notional valuations on property.

    Call me cynical if you wish, but that is how this country operates.

  29. William Phelan Says:

    First, the nationwide uniform flat rate property charge is not remotely a ‘poll tax’ and has little in common with the vary-by-the-local-government taxation-of-individuals (i.e. ‘per head’) that the Conservative government attempted in the UK in the 1980s. The tendency to describe what will be happening next year as a poll tax is therefore rather odd and does not contribute to informed discussion of tax policy.

    Second, for a permanent system, no matter what the approach chosen, it is probably best to increased the amount raised slowly, if inexorably, over time. If both the amount being raised and the variation in the amount being raised (i.e. in different bands) is not too serious at first, it will reduce political resistance and therefore the pressure to narrow the tax base by exempting e.g. property-owning pensioners. One of the important features of the next few years is to get the system up and running without exempting or discounting large portions of the population, because initially granted exemptions/discounts are likely to create permanent, hard-to-withdraw, distortions.

  30. The Dork of Cork Says:

    @Brian
    But if I break my windows to reduce by taxes will this not reduce the energy efficiency of my home ?
    Maybe the “authorties” want us to move into Blackhouses again , with open fires and animals in the lower end so that their heat & fleas will rise up like.
    http://www.youtube.com/watch?v=t9-NTGbMbn4

    Most people will probally choose to go back to the car I suspect until there is no more of that high energy liquid stuff thingy.

  31. Edward Carey Says:

    Richard - can I email you privately?

  32. Georg R. Baumann Says:

    ….A residential property tax was introduced by a Fine Gael-Labour Party government five years later. It was based on a charge of 1.5 per cent of the value of a house when the market value exceeded a specified rate. The tax, which was based on self-assessment, never raised a significant amount of revenue, mainly due to lack of compliance. It was abolished in 1996….

  33. seafóid Says:

    There will be a big pushback against the tax (remember the early 90s South Dublin outrage over the Residential property tax thing ) but this time really is different with the government effectively bankrupt. If most other countries have a property tax Ireland can manage one too. There will need to be some sensitivity around the design of the scheme especially for people with underwater mortgages .

    While they are at it the government must reform the mess that is rezoning of farmland. There have been several reports on this since the 70s that are now “faoi ualach deannaigh …..in oifig stáit”

    http://homepage.eircom.net/~aonghus/duanaire.htm

  34. Brian Woods Snr Says:

    @ DoC: “Maybe the “authorties” want us to move into Blackhouses again , with open fires and animals in the lower end so that their heat & fleas will rise up like.”

    I visited a N-German version of one of these ‘multi-purpose dwellings’. Humans upper end, beasts at the other. Sleeping was either in a deep nook over the firegrate, or a completely enclosed (door with latch!) double-bed wooden box. Two smallish windows. No glass, heavy wooden shutters and some indeterminate type of material covering on the inside. Grand to visit. Permanent residence would be somewhat different.

    I suspect the Gov are ‘kite-flying’ with this property tax business. But if it is ‘for real’, expect stiff opposition. Many folk are very cross, and just need some good excuse to get troublesome. Personally, I am mightly opposed to any ‘charges’ absent any meaningful, substantial political reforms. Its one thing to have your purse snatched on the street, its another thing entirely to be bent over your own kitchen table!

    Fly on wall of the FG and Lab pol clinics over Christmas should be interesting.

    Brian

  35. Georg R. Baumann Says:

    Sarah Carey Says:
    December 21st, 2011 at 11:56 am

    Second - I’ve no objection at all to a property tax, or water charges etc. This has to happen…..

    Fascinating!

  36. Carlo Spiceyweiner Says:

    “I should’ve actually read your submissions before asking questions”

    Jaysus now Sarah, shure that wouldn’t be like you at all…

  37. The Dork of Cork Says:

    @Brian
    I can perfectly understand a property tax if it was based on area but not on value.
    If we manage to keep a Industrial society then people will have to move back into our cities - although if we get a complete breakdown then & only then will that Black House by the Beech look inviting although I guess protection money to prevent longboats coming on the shore and taking what they want would be needed I guess.
    Did people actually look at the census figures for Urban Growth / contraction ?

    -Change in population between 2006 to 2011 -
    Dublin City had one of the lowest rates of population growth in the State
    With a 3.8 % / 19,172 rise to reach 525,383.
    Meanwhile Cork city & Limerick declined in population by -506 / -.04 % & a dramatic -3011 / -5% respectively.
    With Waterford city not doing much better at +999 / 2.2% rise.
    Contrast this with the mad explosive rise in the Laois population of 13,399 / 20% , as they all Commute to Kildare & beyond.
    These land tax proposals will conflict dramatically with both the external rise of oil and the internal efforts to increase our trade surplus via rises in car / fuel taxes as these road taxes will make inner city houses more valuable.

    The first speaker seems to be under the impression that the inhabitants of the Pale travel to Dublin City to work & play - I am afraid the land madness goes far beyond these Historical boundaries.
    If we could get complete use of the apartments & houses withen the Pale by recent Midland migrants then we would be getting somewhere at least - these proposals would seek to reverse this token of sanity.

  38. Brian Woods Snr Says:

    @DoC: “If we could get complete use of the apartments & houses withen the Pale.”

    Optimum urban habitation is essential. There are large swathes of ‘olde Dublin’ where the indigines have been driven to extinction by Rent Hunters, and are now semi-deserted. How about an non-habitation ‘tax’. If you have a first or above floor in the inner-urbs, you pay, if no one live in it. Never catch on!

    Brian

  39. JeromeK Says:

    Richard/Ronan/Karl

    I believe it is most important that the property tax raised goes to fund the local authority (LA). With some lateral thinking this could be used to transform how the LA’s operate.

    I would allow the LA to adjust a percentage of the rate +/- 30%. This would enable individual LA’s to raise more/less than others if they wished in particular years.

    In return for raising more revenue a LA could provide better services in their area. So long term people could choose to live in an area of higher property tax and better services or vice versa.

    To enable people to objectively judge how well their LA is performing however, there would need to be a set of common metrics published annually that measures not just revenue and costs but the level of services provided. This should be accessible on a central website.

    Over time that should highlight those LAs who are inefficient and who therefore should be discontinued and merged with a more efficient neighbouring one (while minimizing political interference).

    This is a win-win - our government gets more tax and we get a transformed, motivated local government.

  40. Brendan Walsh Says:

    In our report on Local Authority Expenditure and Finance published by the ESRI in 1975, the late John Copeland and I argued that there was an urgent need for a general revaluation of rateable property in order to protect the Rates from the charge that it was an arbitrary and unfair tax. We recommended that in revaluing urban property ’some consideration ought to be given to reducing the burden of rates on structures while raising it on sites’. This was a watered down version of our view that the burden of the tax should have been shifted to site values. The civil servants on our Steering Committee argued vehemently against any such restructuring the tax, resorting predictably to the claim that it would be unconstitutional.
    In any event, our Report was ignored and in 1977 the main political parties vied with each other in claiming credit for the abolition of rates on private residences.

  41. colm mccarthy Says:

    @ Richard Tol

    No nit should go unpicked. Ireland already has a Poll Tax, at the rate of €160 per household per annum, almost all of it payable to RTE.

  42. Sporthog Says:

    @ JeromeK,

    “This is a win-win - our government gets more tax and we get a transformed, motivated local government.”

    No guarantee of that…

    Remember the Health Levy which was supposed to be a temporary measure? Brought in at a small % rate, increased, increased again, incorporated into the USC, made permanent and the end result is still a dogs dinner.

  43. Ossian Smyth Says:

    The TV licence is levied per household - not per person or per TV - so it is not a poll tax, it is a fixed tax contingent on ownership at household level(as is the household charge).

  44. Michael Hennigan - Finfacts Says:

    In 2006 it was estimated that development related levies accounted for 14% of local government income.

    On reform, following a report that was ironically called ‘Better Local Governemnt,’ a new senior tier with titles director of (housing, drains etc) was added. I’m told that they had big expense budgets but just added to the bureaucracy.

    Before the 2007 general election, elected part-time local councillors were seeking increases in their payments, expenses and lump sum pensions.

    The total of about 900 are the electors of 43 members of the 60-member Seanad.

    Fianna Fáil senators met with the then Minister for the Environment Dick Roche to discuss the financial position for councillors. They wanted improvements in the allowances and gratuities. All 28 senators signed a letter sent out on headed paper by the Fianna Fáil Seanad Group to councillors nationwide, who saw it as a clear sign the Seanad election campaign was on the horizon.

    For councillors retiring after 20 years of service Roche agreed to up the tax-free lump sum to €64,000 - a rise of €16,000.

    By the time of the local elections in 2009, the lump sum had risen to €70,416.

    In 2005, the highest paid councillor earned almost €83,000 from expenses, according to an Irish Independent survey.

    Roche agreed annual pay hikes of up to €6,000.

  45. ObsessiveMathsFreak Says:

    CORRECTION: The chairman of Residential Agency Practice Group of the Society of Chartered Surveyors Ireland points out that they have never called for all properties to be valued. Apologies to all involved.

    Stall the apologies for a second. What about the other “groups” of the Society? What about the society in general? In addition, what input has the society made into the property tax debate and in particular what submissions and/or suggestions has it made to the government?

    People should know enough at this stage not to swallow a surveyors evaluation without some skepticism!

    I acknowledge that trying to get it too *too right* could leave us tied up in knots for years and cost far too much to implement but I wouldn’t be dumping the skills of those CS/Auctioneers JUST yet **

    Why not? The entire CS/Auctioneering industry has shown itself to be provably incompetent when it comes to valuating properties. We’re looking at falls in property prices of between 50-80% in this country. Prices that surveyors and auctioneers signed their names to.

    How happy would you be having your property valued by someone who in 2007, judged that a three bedroom semi in Kildare was worth over €400,000? Would you have confidence in their ability; enough to pay property tax based on their findings?

    Can the government rely on the ability of these people in such a sensitive area? When people appeal their property valuations, what happens when they bring up evidence of surveyors grossly overestimating property values during the boom. I think they’d have a pretty strong case for appeal really.

    No nit should go unpicked. Ireland already has a Poll Tax, at the rate of €160 per household per annum, almost all of it payable to RTE.

    The difference here is that the licence fee is a flat charge based on something quantifiable–you either have a TV/radio or you don’t.

    Nobody comes to your house, takes a look at all your telly’s and car radios, and decides to charge you more or less depending on whether your TV looks like its got picture-in-picture, or whether your radio has a clock, or whether you playing video games or watching the shopping channel more, and whether your station presets are for Radio 1 or Spin FM.

  46. Mickey Hickey Says:

    Property taxes are more the rule than the exception around the world. usually levied by municipalities to support roads, primary and secondary education, water, sewage, welfare for homeless. Higher levels of gov’t subsidise some services using earmarks such as capital projects bridges, housing etc.

    Taxes are assessed by neighbourhood based on lot size and house size. Nobody comes in the house to see whether the paint colour adds to salable value. Additions to the house show up on satellite surveys and lead to reassessments. There is usually an appeals process where you have the right to get the assessed value of ten houses in your neighbourhood and then you can lodge a formal appeal based on those values.

    Of course in Ireland jobs for the girls and the boys will be the primary consideration so simplicity will not be the prime goal.

    We cannot expect the local politicians to be any more honest than the TDs’ but at least social opprobium should be more effective.

  47. Richard Tol Says:

    @Colm McC
    That levy should be cut by 90%. RTE should be privatized. The little public good that RTE does should be put out to tender (paid by the remaining 10%).

  48. Sarah Carey Says:

    @OMF

    “Why not? The entire CS/Auctioneering industry has shown itself to be provably incompetent when it comes to valuating properties. We’re looking at falls in property prices of between 50-80% in this country. Prices that surveyors and auctioneers signed their names to.

    How happy would you be having your property valued by someone who in 2007, judged that a three bedroom semi in Kildare was worth over €400,000? Would you have confidence in their ability; enough to pay property tax based on their findings?”

    If I was selling the house, and the house sold for €400k in 2007, then their valuation was correct.

    The sale valuation of a house is whatever someone else was prepared to pay for it on the day.

    If I was buying the house and my valuer said it was worth 400k, well, what did that mean?

    Did it mean that in order to buy that house on that day I’d have to pay 400k because that’s what other houses of similar build in the same area were being sold for, then - that was a correct valuation.

    If I was buying the house in the hope of flipping it in 5 years to upgrade - well, that’s a different calculation.

    If it’s a site - did you desperately need to live in that area because it’s near family, or would any old 1/2 acre within a 20 mile radius do? The same property has a different value to each party involved - the vendor, and the various potential purchasers.

    Furthermore, to the financier, the banks. They needed to look at future potential valuations (which as Karl Deeter has previously observed - if the mortgages were non-recourse they might have done). They are the ones who might want to check with their valuers.

    So the “entire” industry was not at fault. It all depends on who the valuer was working for, and for what purpose the property was bought.

    That’s why we need to ask - on what basis will a property be valued for this tax? Is it the sale value, rental value, cost of servicing, cost of services in whole area (and dividing it up between the number of properties?)

  49. seafóid Says:

    TV3 is a wonderful example of the private sector running a successful TV franchise in Ireland.

  50. Ahura Mazda Says:

    Are there figures for the total amount of tax planned to be collected from property and water? 1bn / 2bn?

    Regardless of methodology, I’d like to see property taxes introduced in one big whack rather than increasing it bit by bit. Certainty, rather than fear of what the future will hold, should help consumer confidence.

  51. seafóid Says:

    [INAPPROPRIATE]

  52. The Dork of Cork Says:

    @Seafoid

    WHAT ?
    Could you really imagine TV3 doing lets say a “To the Waters & the Wild”
    There is such a thing called taste you know.
    Me thinks RTE may have scrubbed the tapes on Saurmans instructions
    There was always something very dark about TV 3.
    It promoted the Scouring of Shire culture which was rampant during the Boom.
    Breeding a army of mindless consumerist orcs
    Tacky Junk.

  53. The Alchemist Says:

    What is grating about the house tax, apart from cost, is its arguable unfairness. The local authorities have many tenants on long term leases, tenants for life, and given the de facto permancy of these arrangements, I see no reason for exempting the tenants - no doubt the lawyers will disagree. But the ones who are expected to pay this reworked house tax are the ones that pick up the bill for most of every government’s mistakes.

  54. Sporthog Says:

    @ Sarah Carey,

    “That’s why we need to ask - on what basis will a property be valued for this tax?”

    Exactly Sarah exactly, but you left one option out….Notional Value.

    Local Authorities / Revenue Commissioners will demand you pay a % of a notional value but it will be their notional value, which will be far higher than the actual market value, of this I have no doubt.

  55. Richard Tol Says:

    @Ahura
    Water charges: 1.5 bln euro per year needs to be collected for the full cost recovery mandated by the Water Framework Directive. If you assume that companies continue to pay as they do, and household on private water schemes do not contribute, then that amounts to 600 euro per household per year.

    Property tax: 1-2 bln euro per year if you take the bail-out agreement as your guidance.

  56. Georg R. Baumann Says:

    Richard Tol Says:
    December 21st, 2011 at 5:07 pm
    @Colm McC
    That levy should be cut by 90%. RTE should be privatized. The little public good that RTE does should be put out to tender (paid by the remaining 10%).

    +1

  57. The Dork of Cork Says:

    @Richard
    Still can’t figure out how the Victorians could do this with little fuss with much less energy densities available yet we are finding this stuff difficult & concentrate all our energies in rentier debates.
    en.wikipedia.org/wiki/Milngavie_water_treatment_works

    This has a very Roman style collapse smell about this.

    When the water goes I suppose we better turn to light Ale again or possibly God forbid even Buckfast.
    http://www.youtube.com/watch?v=kuKZWkgo098

    In a Industrial collapse its best to stop the bleeding first , not shower the patient in leeches.

  58. Kevin Walsh Says:

    I believe that once water provision is transferred to the water services company, I will receive literally no benefit of any kind from my local authority. (Well, apart from the pleasure of applying for planning permission to retain my satellite dish in a few years.)

  59. seafóid Says:

    @Dork

    No, I can’t. I am trying to think of a successful Irish privatisation.
    I remember the fanfare when Irish Life was privatised. Can’t remember what happened to it afterwards.

  60. Peter Stapleton Says:

    Do Tol and McCarthy extent the arguments they apply to RTE to their employers, the ESRI and UCD?

  61. seafóid Says:

    Has anyone done any work on the tax cuts of the last 10 years of the Tiger, the misallocation of capital that resulted and the impact on the knackered tax base when disaster arrived UTTERLY out of the blue ? How much of the growth of say the last 10 years of the Tiger was in fact a mirage and what impact did the tax cuts have on the whole mess? Presumably the banjaxia has been compounded by the fact that disposable income released by the tax cuts went into speculative property “punts” (or Euros) that are now in many cases unserviceable debts which mean that those concerned are in no position to absorb the tax increases required to get the budget back to a state of equilibrium.

  62. clintideal Says:

    so were looking at a 2.5B to 4B annual bill for property and water related tax
    in the next two to three years this can be justified as we need extra tax revenue

    because of the predicament we are in but it may also be the catalyst to garner the people that we have had enough of this one sided austerity and that a much stronger resistance to who govern in our name

  63. Richard Tol Says:

    @Peter
    Indeed. I think that Ireland’s universities should be privatized, and the subsidies for students reduced.

    The ESRI is a private company already. It gets a small subsidy from the government, less than half of what goes into the Horse and Greyhound Racing Fund. I think that the ESRI provides a public good.

  64. The Dork of Cork Says:

    @Richard
    You crack me up
    You still think the Yes Minister thingy was 100% correct.

    What do you think happens when Goverment gets privatised advice from players that have skin in the game ?

  65. ObsessiveMathsFreak Says:

    If I was selling the house, and the house sold for €400k in 2007, then their valuation was correct.

    The sale valuation of a house is whatever someone else was prepared to pay for it on the day.

    If I was buying the house and my valuer said it was worth 400k, well, what did that mean?

    Never mind all that “market will bear” nonsense. The surveyor was paid to put a long term value on the house. They failed to do that adequately.

    If the surveyor had said the house was worth €250,000, they would have done their job properly. Saying it was worth €400,000 was incompetent at best and negligent at worst. Hundreds of thousands of people are trapped in negative equity today because they trusted the value assessment of a Charted Surveyors whose only excuse is that they got caught up in “groupthink”–i.e., they were not capable of acting in a professional manner.

    Given a 1% annual property tax, an extra €1,000 on the valuation will add up to €1 extra per house for the government. Times two million or so houses in the country gives €2 million to the government.

    And if the properties are overvalued by €100,000, this will net the government an extra €2 billion per annum.

    So you have a government with a vested interest in overvaluing properties, relying on the valuations of a professional body with a consistent history of grossly overvaluing properties. This is a political and legal train-wreck just waiting to happen. We’ll have a “property Crotty” case within 36 months over valuations with an immensely costly supreme court judgement to boot. All because the government relied on an inaccurate, outdated, and unreliable method of property valuations rather than on rigorous, quantifiable methods.

    The Society of CS will receive the contract to assess 2 million homes within the next 12 months.

  66. PR Guy Says:

    Is this true?

    http://www.independent.ie/national-news/now-20pc-of-mortgage-holders-behind-on-their-repayments-2971159.html

    What happens when forebearance ends (which it will one day
    when banks decide - not governments - that it’s now worth taking that property back). There will be fewer property owners to pay this tax.

    If a bank takes a house back will they become liable for the property tax?
    I bet not.

  67. clintideal Says:

    as a guide lets look at commercial property rates tax

    why not look at the local council commercial property tax are all based on
    property valuations but i know of no rateable valuation in this country that has come down since the boom years in many area`s they have gone up and some area`s they have been frozen this has been a substantial cost on business despite the loss of over 400 thousand jobs in the the private sector for last three to four years

    commercial property value has fallen over 50 % since peak

    once a tax goes up it rarely goes down

  68. DOCM Says:

    @ Richard Toll and Colm McCarthy

    In the interests of academic rigour, herewith the Wikipedia link to the definition of a poll tax.

    http://en.wikipedia.org/wiki/Tax_per_head

  69. seafóid Says:

    I think AIB should be privatised. The private sector is much more efficient.

    Also don’t forget that while the TV licence is €160 per household per year the cost of the market failure of private sector outfits Anglo Irish and Irish Nationwide is approx €2000 per household payable until the expiry of the ELA.

  70. Mickey Hickey Says:

    Valuation is based on the actual price that nearby properties sold for. To work the process has to be simple and transparent, two words that are anathema to the Gov’t bureaucracy and the legal profession. The lobbyists will be making campaign contributions, assessors, solicitors, auctioneers, banks the resulting legislation will be quite dense.

    The public has to insist on actual sale prices and an appeals process. It is of the utmost importance that “campaign contributions” do not buy lower assessments. The mantra has to be simple and transparent or nothing.

  71. Ahura Mazda Says:

    @ Richard,

    Thanks. I had an inkling that the numbers were around the ones you quoted.

    I’d suggest that those in favour of introducing water and property charges are being taken advantage of by politicians. These services are already being paid for from existing taxes and that, ideally, introducing water/property charges would decrease income tax by x%. i.e. make the point that it should be relatively neutral and you’re merely suggesting a change on where taxes are levied. Unfortunately the introduction of these will purely be (/be seen as) a tax increase.

    Depending on the level of exemptions, the charges could get very high. Especially when it’s being paid from net income. It will need some careful design on the margins (i.e. better off on the dole). Reducing social welfare payments is probably the correct choice but not an easy one to take.

    1.5bn p.a. for water production is too much. I’d do it for 1bn.

  72. Paul Hunt Says:

    @Ahura,

    You’ve only scratched the surface of the absolute mine-field that this is for the excessively centralised state government apparatus we have. If it had the option the Government wouldn’t go next, nigh nor near this minefield. It is a measure of the pressure it is under to reduce the fiscal deficit and of the external direction to which it is subject that the Government is being forced to contemplate property and water charges.

    Despite the apparent sullen and resentful popular acceptance of the fiscal salami-slicing the Government is applying, these could prove to be the straws that might break the back of popular acceptance of fiscal retrenchment. Given the innate Irish preference for possession over performance, it is even worse that we are in the aftermath of a burst property bubble.

    Irrespective of the basis on which it is levied, on the property charge there is a simple and straight-forward solution: devolve full revenue-raising and local service provision powers to a reconfigured local governance structure and off-set, at least, some of the revenue raised against income or consumption taxes. People would very quickly elect local councillors of the calibre to ensure effective democratic accountability.

    But do you think such an approach will be considered? If, like me, you do not, then you are well on the way to understanding why the path to economic recovery will be slow, drawn-out and much more painful and damaging than it need be.

  73. Paul MacDonnell Says:

    Some questions for FG:

    1. Is it the case that this will be a Dublin tax (mainly)?

    2. Will residents of South Dublin and posher parts of North Dublin be paying multiples of what Phil Hogan’s constituents will be paying regardless of income?

    3. If yes then how many multiples?

    4. Will residents of South Dublin and posher parts of North Dublni be paying multiples of what Phil Hogan’s constituents will be paying regardless of service provided?

    5. Will all of the revenue be paid into the Merrion Street black hole and not to local authorities?

    6. If it’s to ‘pay for local services’ then who’s been paying for them up to now?

    7. If the answer to these questions are: yes, yes, between twice and ten times, yes, yes and ‘er - you have’.

  74. Paul MacDonnell Says:

    ….then what are Leo’s chances of keeping his seat?

  75. Richard Tol Says:

    @Paul
    3. Our research suggests that a factor 2 is the minimum.

    See Table 2: http://www.esri.ie/UserFiles/publications/WP352/WP352.pdf

  76. EWI Says:

    @ Ossian Smyth

    With only these variables, a 4 bed, 100 sqm, near derelict ex-council terraced house on Sheriff Street would be taxed the same as a 2 bed 100 sqm detached mini-palace with half a hectare of gardens in Ballsbridge.

    Pretty damning indictment.

  77. Yields or Bust Says:

    @Sarah Carey

    “If I was selling the house, and the house sold for €400k in 2007, then their valuation was correct.

    The sale valuation of a house is whatever someone else was prepared to pay for it on the day..”

    Oh dear.

    Not for the first or indeed the last time will we read that a house is only worth what someone else was prepared to pay for it. Jaysas.

    Wrong. Wrong and wrong again.

    For the love of sweet Holy Jesus can you, a seemingly well read individual, with a background in the property business and for all others out there understand a simple truth regarding Irish residential property - 98% of transactions in the RoI i.e. the overwhelming majority, simply do not happen unless a lending bank allows it so.

    Regardless of valuation method the lending bank in 98% of cases will make the determination if a property transaction completes or not so what you or I believe we are buying is a fiction created in consumers heads. It’s the banks that make that determination, it’s the banks that ultimately decide if the valuations are fair or otherwise and it’s the banks that have ensured the pricing mechanism used in property valuations are entirely flawed.

    So the next time someone speaks or puts pen to paper and rolls out the drivel as you have above you have my express permission to execute for ongoing and serial stupidity.

    The normal Joe has nothing at all to do with what he/she is prepared to pay for a RoI residential property. Repeat nothing. It’s our beloved banks that will determine if a transaction happens or not. Got it? Hope so.

    Big deal you may say but sadly it’s an enormously important issue. And Dork above correctly points out that given the fraudulent nature of the lending practices for the past decade Irish consumers are now being asked to pay for a property tax for a third time. Namely 1. initial savage Stamp Duty rates, as far as I can see, were almost unique in the developed world in terms of their size particularly in the 2000 to 2005 period 2. through our completely crazy mortgages based on equally flawed property pricing models and 3. through these new and improved proposed property taxes.

    When the tax man comes knocking I’ll be suggesting that he nets my bill against the c€100k I’ve paid in Stamp Duty over the past 12 years and when that’s exhausted ask AIB for the outstanding.

    I for one ain’t paying unless the following happens.

    ALL mortgages in the country originated since 2000 are right sized against corrected house/residential property prices based on a long-term net rental yield of 7% at origination date. When that happens I’ll gladly cough up. Before that Phil go and @$^k right off.

  78. Paul Hunt Says:

    The IT is banging the drum on local government reform:
    http://www.irishtimes.com/newspaper/opinion/2011/1223/1224309420809.html

    It’s the usual stuff; ’something must be done’ and ‘Government should do it’. Not a principle nor a clear proposition in sight. (Is it me or is it that, on the basis that nobody takes a blind bit of notice of them, leader-writing is sub-contracted by senior editorial staff as exercises in essay-writing to their teenage children?)

    I know this thread is about desiging an efficient property property charge - and it gets the academics and policy wonks all excited - but this is putting the cart so far ahead of the horse it’s almost surreal. Over the years in relation to energy networks I’ve lost count of the number of times I’ve been asked: ‘I need a transmission/distribution tariff; design one for me’. Invariably my response has been; ‘What’s the efficient level of costs you need to recover for the service you’re providing? If we can identify that, I’ll be able to design a tariff to recover these costs from those who are causing them to be incurred.’ (Frequently though, and may god forgive me, I gave in and charged ahead. One has to put bread on the table.)

    It’s precisely the same in this instance - as it is for water charges. The questions are: what services are being provided? What do they cost? Can they be provided more efficiently at a lower total cost or better services provided at the same cost? What restructuring/re-organisation is required to deliver the services required efficiently?

    This is the difficult part of the task. When this is sorted the number-crunchers and academics can be left loose to their hearts’ content.

    But does anyone think that this is how the task will be approached. Not a chance. It’s be just another round of fudge, fiddle and fix.

  79. Richard Tol Says:

    @Paul
    Although some had hoped that this would be an austerity-and-reform government, it has become clear that this is an austerity government. They’ll cut spending and raise taxes. The reform agenda has vanished.

  80. Paul Hunt Says:

    @Richard,

    Yours is a depressing, but solidly evidenced-based, conclusion. For those of us who nourished a naive hope of something better, if we had kept ours eyes open we would have realised no other outcome was possible.

    Most people simply do not realise how medieval governance in Ireland is. We have the King and his appointed ministers and advisers attended by the Lords Temporal (IBEC, industry associations and the professions), the Lords of Quangoland, the Lords Academical, the Lords Agricultural, the Lords of Travail (the unions), numerous local barons and a few Lords Spiritual at some remove.

    The ordinary people use their TDs to press their petitions on the King and his court or use the lords in attendance to press some collective, but sectional, interests. The court jesters (the media) know well on which side their bread is buttered.

    Most reasonably well-governed countries, such as Britain, the Netherlands, or the Scandinavian nations, have spent the last 1000 years - with a major surge since the Enlightenment - establishing a functioning parliament (and local elected bodies) to direct, mediate and decide on the relationship between the governed and those who govern and on how governance is performed. The driving thrust has always been the popular desire to impose effective democratic governance on native power elites.

    Ireland, in 1922, was gifted such a system of governance, but, since then, successive governments - with the full and free consent of voters - have worked assiduously to return it to a form of medieval glory.

    And so we have medieval governance. Is it surprising that, economically, we are heading back to the middle ages?

  81. EWI Says:

    @ Paul Hunt

    Most reasonably well-governed countries, such as Britain, the Netherlands, or the Scandinavian nations, have spent the last 1000 years - with a major surge since the Enlightenment - establishing a functioning parliament (and local elected bodies) to direct, mediate and decide on the relationship between the governed and those who govern and on how governance is performed. The driving thrust has always been the popular desire to impose effective democratic governance on native power elites.

    And this is what we have here, much to the dismay of the technocrats on IE.

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