Taoiseach denies rift over PDs' stamp duty plan

Taoiseach Bertie Ahern has dismissed reports of a rift between the Government coalition partners over the Progressive Democrats…

Taoiseach Bertie Ahern has dismissed reports of a rift between the Government coalition partners over the Progressive Democrats' proposal to abolish stamp duty on the purchase of private homes.

Speaking in Tralee, Co Kerry, today Mr Ahern said it was important to remember that the remarks made earlier this week by Tanaiste Michael McDowell were made in a policy forum of the Progressive Democrats and that they were a proposal.

He added that Mr McDowell had not notified him in advance of making the proposal, but that he would not have expected him to do so.

Mr Ahern said: "Monday was the Progressive Democrats autumn conference, which every party has had, looking out into the future and looking at issues [as] part of a government policy from 2007-2012.

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"That's the light that they should be seen in - it's just another suggestion around many suggestions that are put out. What we are concerned with now - but that's all into the future - is the Budget in two months' time."

"Yesterday's Cabinet, and most of the meetings for the next few weeks, was a preparation for the Book of Estimates, preparing for the Budget of December and making sure we get the National [Development] Plan finished. Then we can look into the future, but for this Budget, it's a different agenda."

Mr Ahern denied suggestions the stamp duty issue was destabilising. He said there had been no discussion at Cabinet about the issue yesterday.

He said he would not expect any political party to clear with him its policy agenda for the future.

"And in fairness to Michael McDowell, he said this is one of a number of options that his party is looking at."

Earlier this week, the PDs announced plans for a major reform of the stamp duty regime as one of the party's flagship policies for next year's general election.

Mr McDowell claimed the Exchequer did not need the €2.6bn generated annually by the tax.

Following the announcement by the PDs, Minister for Finance Brian Cowen warned that any reduction in tax revenues from one source would need to be compensated for in other areas.

While refusing to comment specifically on the PD proposals, he said increases in capital tax revenues, such as those from stamp duties, had been used to keep personal taxation low and to fund large increases in public service spending.

It emerged today that Government advisers, including those from the Progressive Democrats, were warned last year that easing stamp duty levels would be too costly and would actually increase house prices.

Economic experts from the Department of Finance advised that the Government "should refrain from introducing any new tax interventions affecting the housing market" in the December budget last year.