'No New Property Tax' In Budget

While the next Irish Budget will see more 'painful' spending cuts - and the likely introduction of a carbon tax - there will be no industry-damaging property tax rises.

The Minister for Finance has indicated that he will not introduce such a new tax or water charges in the next Budget.

His comments come in advance of him receining a report from the Commission on Taxation.

Its proposals are believed to include the introduction of water charges for every household and a self-assessed property tax on all homes, as well as a tax on child benefits.

However, Mr Lenihan has told RTÉ News that the Government will prioritise spending cuts in the next Budget.

Speaking on RTÉ's This Week, Mr Lenihan said he was disappointed by the proposal for a national recovery bank.

The Minister described it as irresponsible and said Fine Gael had failed to put forward a viable alternative to the National Asset Management Agency.

He also said he was confident that the Green Party would support the legislation to establish NAMA when it comes before the Dáil next month.

Mr Lenihan said he did not envisage fully nationalising another bank as it had to do in the case of Anglo Irish Bank.

On Europe, Minister Lenihan also said he hoped the debate on the NAMA legislation will not disrupt the debate on the second Lisbon Treaty referendum.

He said: 'I don't want a divisive vote on the NAMA issue to interrupt the Lisbon debate.'

The good news on a U-turn on property taxation was also covered by the Taoiseach, Brian Cowen, who said that property tax was "not a done deal".

Brian Cowen told the Sunday Independent that he was not "wedded" to property tax.

He said that the Government needs to examine whether there are better ways to fund local authorities.

The Commission on Taxation has finished a report for the Government on possible changes to the system of taxation starting next year.

It has been reported that it has recommended introducing a property tax based on each home's value to replace a stamp duty tied to property sales.

Mr Cowen had faced a backlash from Fianna Fáil TDs over the proposal and he admitted that further tough decisions lay ahead of him.

He said: "There are a lot of difficult political decisions coming down the line.

"We have to close the gap between what taxes are coming in and what is being spent. If we don't do that, we put the whole future at risk."

(BMcC/KMcA)