By Eamon Delaney
The recent granny grant proposed from Shane Ross TD and his fellow Independents, has to be one of the craziest budget ideas of recent years. But this week the Independent TDs ran it close with another hare-brained notion, which was that the elderly should be exempt from paying property tax. Yes, just like that.
Why do people think the elderly are some kind of marginalised group of victims who need constant support and cosseting – unless, of course, it is to get their vote which may be the real objective here. (Remember those gold-plated medical cards which Fianna Fail gave to the over 70s and then tried to withdraw?)
On the contrary, as has been said many times, the elderly have been relatively well protected in Ireland and often insulated from the crash in a way that the young and working families were not.
Few elderly emigrated in the way that droves of our young millenials did after the crash. They get free travel, a pension rise every year, maybe on top of a public sector pension, they have cleared their mortgages and do not have the challenges of childcare, long and expensive commutes or raising kids.
Of course, many elderly are in precarious situations and suffered through the recession, and no one wants to be unsympathetic or uncharitable. But we have to get beyond treating everything in Ireland as a charitable cause (ie vote-magnet) or there will be nothing left in the kitty and we’ll go broke. Not that Lord Ross seems to care.
Also, if the elderly and disabled get a let off on property tax, others (like working families) will have to pay more – again. Which is unfair – again. As we well know, the squeezed middle is already bearing the brunt of taxation, paying 50% tax on all income over 35k. Meanwhile, lower earners pay no tax at all. And now the Independents want to extend that to a property tax exemption for the elderly.
Again, this is not discount the hardship felt by many elderly, doubly so as they cannot go out and get work. But the reality is that the ramping up of benefits in the boom years meant that the elderly were cushioned from the dramatic pressure of the recession, even if their benefits were cut.
Now that these cuts are being restored, as a priority, the elderly are insulated again. And high spending Leo wants this to continue, with pension rises every year, cheered on by Fianna Fail’s Welfare King Willie O’Dea. And, of course, there is no means testing : the benefits go to everybody, including the affluent.
However, the more resources that go to the elderly, the less there is to support young workers, as Varadkar has discovered as he tries to honour his promise to help the people who get up early in the morning, with even minimal tax cuts.
This is all adding to a serious and growing inter-generational divide in Ireland. And it is going to get worse. According to the ESRI, at present it is one working person paying in for five retired, but in the future this will shrink to 1 to 2, which is a frightening statistic. A pensions time bomb awaits, doubly so with both State and public sector pensions. This week, a Department of Finance’s report on Population Ageing and the Public Finances painted an alarming picture and urged that the retirement age be increased.
This inter-generational divide is especially apparent too on property where many elderly continue to live securely in large ’empty nest’ houses, which they don’t sell on, while a younger generation is desperate to get on the property ladder and is crippled by rent.
This makes it all the more ironic that the Independents should propose that the same elderly people should now not have to pay property tax. It is in the spirit of more reckless financing and pure populism. Lord Ross and his friends may be chasing those grey votes but, for the younger generation, struggling to get by and paying for so much already, he is just rubbing salt in the wound
This article first appeared in The Times.ie on 12 September 2018