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Dáil Éireann díospóireacht -
Wednesday, 8 Nov 1978

Vol. 309 No. 3

Local Government (Financial Provisions) Bill, 1977: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

I have already dealt with the major points raised by Deputies during their contributions to the debate. I should like to dispel the suggestion made by Opposition speakers that local authorities had been squeezed for money during the current year. They never had more money than they have had in the current year. The £530 million available to them this year for current capital services represents an increase of £100 million on the previous year. The cash flow and rate collection figures of local authorities are benefiting substantially from the fact that the State is now the biggest ratepayer.

Deputy Quinn asked me to elaborate on the reference in my Second Reading speech to the possibility of a global rather than an individual system of valuation being applied to domestic property. This is a matter for the Minister for Finance, who is responsible for the valuation system. The matter of future valuations is at present being examined by him. One way or another, local authorities will be fairly treated in this regard. They will be given full value for the purpose of the grant which they will be getting from the State for all new domestic property built in their areas.

Deputy Mitchell, referring to this matter, suggested that the only reason for the continuance of valuations is to keep the way open for the reimposition of rates. This is nonsense. The need for valuations of new domestic properties is to allow local authorities to claim an increased amount from the domestic rate grants and to ensure that no extra burden will fall on non-domestic property as a result of new reliefs. It has nothing to do with reimposing rates on domestic property. Deputy Mitchell wants to reimpose rates on houses of five bedrooms. The fact that a person lives in a five-bedroomed house does not mean that he is rich. You could have instances of widows and people on fixed incomes living in such houses. These people may have had large families. He appears to be suggesting that they should be forced out of their homes because they were once well-off or had large families. I do not see any justice in this suggestion.

Deputy Mitchell wants me to reimpose rates on rented accommodation. He wants rates to be a cost factor in the provision of rented accommodation but not in the provision of owner-occupied accommodation. I fail to see what benefit this would confer on tenants of rented accommodation on whose behalf Deputy Mitchell is concerned.

Deputy Mitchell also referred to the position of small shopkeepers. The small shopkeeper does not pay domestic rates. He pays rates only on the part of his premises used as a shop or a business and gets full relief on his living accommodation.

Deputy Quinn was concerned that local authorities had not been advised of the upper limit to be applied this year. There is no need for him to be concerned, because the period specified for holding estimates meetings does not start until 23 November.

Is the Minister saying that he has not had requests for information?

I have not had any direct requests. Last year the amount was not fixed until much later.

(Interruptions.)

I should like to remind the House that the primary purpose of this Bill is to give legal effect to the Government's decision to abolish rates on domestic property, community halls, secondary schools and on farm buildings which are still liable for rates. This year alone the sum came to £80 million for this purpose. The remaining provisions of the Bill arise directly from the fundamental changes caused by the derating. The provisions in this Bill are designed to make the necessary changes in the legal framework within which local authorities must operate. I can understand the position of Deputies who wish to raise other issues in this debate.

When drafting this Bill we had to keep in mind the need for a fair balance between local authorities, the remaining ratepayers and the general body of taxpayers. At all times I have been fully aware of the need for keeping a sound democratic system at local authority level. This Bill provides for all these things in a fair and reasonable way. I should like to emphasise that there is no interference with the autonomy of local authorities, a matter which was referred to by many people during the debate. It is their right to establish their own programmes and priorities and to spend the domestic grant as they see fit.

On a couple of occasions I attempted to raise on the Adjournment the matter to which the Minister referred, that is, informing local authorities of the percentage increase for rates for 1979. Can the Minister say whether the amount will be 6 per cent, as alleged by Deputy Tully, and when local authorities will be given this information?

At this time I cannot give an indication of the amount but I shall be informing local authorities shortly. There is no indication that it will be 6 per cent.

I have received requests from local authorities about this matter. Is the Minister going to communicate with local authorities before the end of this month or before the end of the year?

On the basis that the period for the estimates starts on 23 November, that will be the date to be aimed at.

During my contribution I congratulated the Minister on having taken rates off community halls, but I mentioned the matter of accumulated arrears. Some of these halls had accumulated arrears of £500 or £600. They are only paying so much on account at the moment and rate collectors cannot take their percentage because this is hanging over them. I am asking the Minister if he would wipe the slate clean.

The matter of arrears at any time is solely for the local authority concerned, and managers have certain powers.

To wipe them off?

Managers have powers.

(Cavan-Monaghan): I am not sure whether the Minister, in his very brief reply——

This debate was adjourned last week.

(Cavan-Monaghan): I am well aware of it. Did the Minister deal with the suggestion that the machinery in the Bill is not effective to pass on rates relief to tenants of domestic premises? Is he satisfied that the provisions in the Bill, without amendment, will pass on the rates relief to tenants of flats and other domestic premises throughout the country?

I am satisfied it is the best way it can be done. It gives tenants access to the courts. The percentage of tenants affected is not as great, as far as we can ascertain, as some people maintain it is. It gives such tenants access to the courts to recover the amount of the rates.

(Cavan-Monaghan): We will have an opportunity on committee Stage to go into this more fully. I do not agree with the Minister that the Bill will be effective in passing the relief on to tenants. Is the Minister saying the relief will be passed on retrospectively to 1 January 1978 from which time the landlords have been enjoying the relief?

I am satisfied it will pass the relief on from 1 January last.

Will the Minister consider, even in general terms, the suggestion I made with regard to the possibility of allowing tenants to offset some or all of their rent as against income tax? Those of us who represent areas in which there are many private tenants have evidence that such tenants are not enjoying relief in respect of the elimination of rates. I do not know of any case in which it has happened. Will the Minister agree to reconsider the provisions of the Bill, say next year, to see if amendments will have become necessary in the light of experience? It may have come to his attention then that this relief has not been passed on to tenants.

On the question of allowing people to set off their rents as against income tax, it is purely a matter for the Minister for Finance.

Has the Minister sympathy with the suggestion?

The Deputy last week attempted to make a constructive suggestion but I do not know if it could be done, or how it could be done. It is entirely a matter for the Minister for Finance. On the second question about having a look at the Bill at a future date in the light of experience of the operation of this section, I will consider it to see if the section could be strengthened.

(Cavan-Monaghan): Does the Minister propose to move any amendments on Committee Stage?

The Deputy will have an opportunity to discuss all the amendments.

Question put.

Vótáil.

(Cavan-Monaghan): With the permission of the Chair, I wish to say that Fine Gael agree with the principle of the Bill. The removal of rates on private houses and other hereditaments is part of Fine Gael policy.

Deputies

Vótáil.

The Deputy may not make a speech now.

(Cavan-Monaghan): I am not making a speech. I am obeying the ruling of the Chair. We believe the Bill needs drastic amendment in regard to the passing on of rates to the tenants of flats and private rented dwellings——

Deputies

Chair.

(Cavan-Monaghan): ——and also on the question of local democracy. We will be moving amendments on Committee Stage. We are abstaining on this vote.

In view of the situation I must ask those who are challenging a division to rise in their places.

Deputies Corish, B. Desmond, Horgan, M. P. Murphy, O'Connell, M. O'Leary, Quinn, J. Ryan, and Tully rose.

In accordance with Standing Order No. 59 the Deputies' names will be recorded as dissenting.

I understood that when more than five Deputies rose a division was essential.

The nine names will be recorded as dissenting.

Question put and declared carried.
Committee Stage ordered for Wednesday, 15 November 1978, subject to discussion and agreement between the Whips.
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