This meeting has been convened to consider Committee Stage of the Motor Vehicle (Duties and Licences) Bill 2004. I welcome the Minister of State at the Department of the Environment, Heritage and Local Government, Deputy Gallagher, and his officials.
Motor Vehicle (Duties and Licences) Bill 2004: Committee Stage.
Section 1 agreed to.
NEW SECTION.
Amendment No. 1 not moved.
I move amendment No. 2:
In page 3, before section 2, to insert the following new section:
"2.—Insofar as additional payments are made to the Local Government Fund by virtue of this Act which, but for this Act, would not be made, such payments shall be applied to the construction, repair and maintenance of tertiary roads.".
I do not propose to delay proceedings in respect of this amendment. I made the points relating to it on Second Stage. The roads that are receiving least attention are those which are known as tertiary roads, namely, the small roads in housing estates, particularly in urban areas. The amendment proposes that the additional moneys raised by the increase in motor tax should be spent on these roads. There is a serious problem with them. There is a significant roads budget, most of which is expended on land acquisition and construction of primary roads, while the rest of the road network, particularly in local communities, is falling into disrepair. I referred to this issue on Second Stage and the Minister of State and his Department should get to grips with it.
I refer to the tertiary road programme for this year and the rural roads provision under the CLÁR programme. Does the CLÁR programme come under the Minister of State's remit or that of the Minister for Community, Rural and Gaeltacht Affairs?
The programme comes under the remit of the Minister for Community, Rural and Gaeltacht Affairs but my Department matches the funding of his Department, which is €3 million.
Must every local authority decision be referred to the Minister for authorisation?
It is a matter for the Minister but local authorities with CLÁR programme areas in their jurisdictions submit a list of priorities.
What does the Minister know about an area, for example, in east Cork, north Cork or west Cork? The allocation should be given to each local authority, which can make a decision based on its best judgment. Why must decisions travel on the bureaucratic roundabout unless the Minister wants to keep his hands on the fund or the power to allocate moneys and dole out favours? It is a political handout operation. Why are local authorities not allocated a block grant to make their own decisions?
These decisions are made locally. Local authorities submit their list of priorities and they know best what are their priorities. The lists are rubber stamped by the Minister and the recommendations of local authorities are not changed. They are in the best position to decide.
Are the lists changed?
Last year my Department provided €2 million, as did the Department of Community, Rural and Gaeltacht Affairs. The Minister for Community, Rural and Gaeltacht Affairs examined the contribution of the local authorities to those areas. It was advantageous to the areas if the local authorities provided additional funding, which was fair enough, because that was out of their own resources. The grants will total €6 million this year and that will be allocated to local secondary class 2 and local tertiary class 3 roads in the CLÁR programme areas and will be decided by the Minister. It is a matter for the Minister but he must take a national perspective on this issue. Of the €4 million allocated to each local authority that has a CLÁR programme area within its jurisdiction last year, a sum of €168,000 was given to my county council. It was dispersed equitably, depending on demand and the condition of the roads. The Minister for Community, Rural and Gaeltacht receives a programme, recommendations and priority lists from local authorities and, by and large, the recommendations are accepted but the Minister must take a national perspective on this.
What are the parameters regarding qualification under the CLÁR programme?
The CLÁR programme is specially modelled for rural areas, which are selected on the basis of population decline in rural Ireland between 1926 and 1996. The only exception is the Cooley area in County Louth which was selected because of the crisis in the area a number of years ago. Parts of Counties Cavan, Clare, Cork, Donegal, Galway, Kerry, Leitrim, Limerick, Longford, Mayo, Tipperary, Roscommon, Sligo, Waterford and Westmeath are covered. Other areas feel they should be included but the yardstick used to select CLÁR programme areas is rural depopulation between 1926 and 1996.
Amendment put and declared lost.
Question, "That section 2 stand part of the Bill," put and declared carried.
Question, "That section 3 stand part of the Bill," put and declared carried.
Question, "That section 4 stand part of the Bill," put and declared carried.
Question, "That section 5 stand part of the Bill," put and declared carried.
Section 6 agreed to.
SCHEDULE.
Amendment No. 3 in the name of Deputy Cuffe is out of order.
Amendment No. 3 not moved.
Question proposed: "That the Schedule be the Schedule to the Bill."
I refer to the issue covered by my amendment, which has been ruled out of order. I will circulate a document which explains the reasons for the amendment. I am upset that I only received a letter from the Chairman regarding his ruling as the meeting commenced. However, the duty on cars is static for those with engines sizes of 1 litre and under and 3 litres and over. Drivers of cars with large engines should be penalised while those using engines under 1000 cc should be given a tax break.
I drive a Smart car that has an engine capacity of 600 cc but there is no fiscal incentive for me to drive a car with an engine size of less than 1 litre and a scale of duties should reflect that. The amendment, which has been ruled out of order, addresses this issue by providing a more equitable approach to motor duties by penalising those who use large engines while giving a break to those who have decided for environmental reasons or otherwise to drive a car with a much smaller engine. I understand if a fiscal measure cannot be taken by amendment, but a sliding duty scale should be provided that reflects engine sizes under 1 litre. We should also reflect the super scale of engines of large range rovers and other such vehicles over three litres. They have a significant effect on the environment.
The Deputy's amendment proposed to increase motor taxation beyond the cut-off point contained in the Schedule to the Bill.
It also proposed to reduce it at the lower end.
We are concerned about the increase, which involves an extra charge. For that reason it was not allowed.
Will the Minister of State comment on the matter?
He does not have to comment because it has been ruled out of order. Perhaps he wishes to make a comment.
Deputy Cuffe's amendment would increase motor tax rates for some motorists by between 10% and 103% in most cc bands above 1900 cc. Of the remaining ten bands below 1900 cc, four bands show increases. In other words, for 1301 to 1400 cc, there is an increase of 6.8%; from 1401 to 1500, an increase of 16.8%; from 1601 to 1700, an increase of 8.9% and from 1801 to 1900 cc, an increase of 6.4%. These four bands contain in excess of half a million cars. The exact figure is 514,712 cars, or 35% of the national car fleet, against a background of an increase of 5%.
I acknowledge that the amendment contains reductions in motor tax of between 3.5% to 86%, however, the rate per 100 cc for a 500 car compared to a 4000 car is €4 compared to €61. The new rates have applied for the last six weeks and to change them now would give rise to a situation whereby motorists would pay different rates for the same cars. While there might be merit in the amendment, it would cause serious practical difficulties.
Deputy Cuffe has advocated a motor tax system based on CO2 emissions. I said to him last year that we are working actively on the introduction of this, but it is not straightforward. As will be appreciated, many of the newer cars are more fuel efficient. If we are to operate on a straightforward basis of CO2 emissions, there may well be a lower rate of tax on a new Mercedes, which would be more fuel efficient, than on the old type Toyota Starlet. We are committed to the principle of this and will pursue it in due course. However, it is a question of finding the proper balance.
In essence, my argument is contained within the paper I circulated and I hope those working with the Minister of State will consider it. I am aware that a provision such as this cannot be introduced overnight. The whole issue of carbon taxation is very complicated. I hope something along the lines I have outlined will be seen as a step on the road towards a more sustainable method of vehicle taxation.
I did not respond to Deputy Gilmore's amendment. We continued the debate on the CLÁR programme issue. While I make a contribution to this area, I do not have total responsibility for it.
I empathise with Deputy Gilmore's views on the local tertiary roads. The mileage of them is substantial, at almost twice as long as the regional roads, a little less than local primary roads and approximately two-thirds of local secondary roads. There are 20,276 kilometres of local tertiary roads. Unfortunately, I do not believe that we can ring-fence the increase for these roads. Last year, Deputy Gilmore outlined the difficulties, particularly in his own constituency. I hope that when the results and recommendations of the company carrying out the pavement study are published, there will be an opportunity to address the issue and draw some conclusions from it.
Schedule agreed to.
Title agreed to.
Bill reported without amendment.