Let the Deputy read it. Why not stand up here and say exactly what the Government are doing? Why does the Minister not tell the elected representatives of local authorities clearly what he intends to do? Why has he not done so up to now? Why does he continue to give the impression that elected members will have this as a reserved function: the decision would be theirs to decide on the level of the charges. That is the impression he gave. In his speech here today, and I want to pinpoint the difference in the language he uses here and the language he uses outside the House when he has attended public functions. In the document he sent to the county managers he states specifically that it is their function and the members will have no power whatsoever to decide on the level of the charges or whether any charge should be introduced.
I oppose that very positively and, unless there is some indication from the Minister of a change of mind here, we shall have to vote against this when the time comes. It is quite clear that the locally elected members will have no say whatsoever as to when charges are to be introduced or the amount of such charges. We agree in principle to broadening the revenue base of local authorities and we could support the Bill if that were all that was asked for but there are fundamental aspects here to which we are opposed. One is the removal of the obligation on the Exchequer to recoup the amount of domestic charges to be at the sole discretion of the county manager. We believe the commitment to recoup domestic rates should not be reneged upon. The present arrangement should continue whereby the Minister is required under section 9 of the 1978 Act to recoup local authorities an amount equal to the revenue on domestic rates.
The existing arrangements have operated fairly satisfactorily and should continue. The limit on the rate to be struck acted as a safeguard to owners of industrial and business property which was not derated. That, of course, is now being removed by the Minister. Any charges levied should supplement existing revenue sources and whatever requirements are necessary should be introduced to facilitate this. It is well within the competence of the Minister and his Department to devise a means whereby there would be a relationship in the amount of the direct grant from the Department and the amount which previously would have been collected under the previous rating system.
Unless there is some device, whether a continuation of the existing provisions of section 9 of the 1978 Act or some other device which the Minister may come forward with in the course of the debate, then we are entering into a situation where in each succeeding year the Minister, now no longer bound to recoup local authorities the amount of the rate on domestic houses, will be able to reduce substantially the amount of the grant from his Department. He will thereby increase the amount to be collected locally through the charges. The charges he suggests this year should bring in £65 million. I would like him to indicate whether there is any possibility at this stage of the £65 million being collected in 1983. I have not the information that the Minister would have on every local authority but those about which I have information have not been levying the type of charge which the Minister was suggesting initially and a very substantially reduced charge has been introduced where one has been introduced at all. There is now a serious doubt as to whether the amount, which the Minister estimated at £65 million, will, in fact, be collected in the various local authority areas. The Minister might refer to that matter when he comes to reply.
As I mentioned, the level of rate limit fixed in the past allowed for increases, in some years 12 per cent, in some years 11 per cent and in some years 10 per cent. In 1982, the figure was 15 per cent. These fixed amounts were paid to the local authority in lieu of the domestic and agricultural rates. This year the amount recouped is in many counties substantially lower. I think there was some mistake made in the Galway allocation. At one stage the manager estimated that the amount being recouped in lieu of the rates to the local authority was 3 per cent. There was some small increase afterwards which may have brought it up some percentage points but it was not a great deal over 3 per cent. So, they had got 15 per cent last year and 10, 11 and 12 per cent in previous years. Following this change the recoupment was down nearly as low as 3 per cent but I understand that the rate that the manager in that county is proposing should be struck shows an increase of 20 per cent on commercial and industrial properties because the limit has been removed. So, the Minister's contribution is decreasing and the contribution of owners of commercial and industrial properties is being increased very substantially and, of course, in many cases these people will also be asked to pay for the services for which an individual charge is about to be imposed. It is a continuation of this Government's obsession with taxation. One wonders where it will lead.
There seems to be a deliberate attempt on the part of Government to stifle initiative and enterprise, to choke it with taxes and at the same time a refusal on the part of the Government to replace with Government funds the investment lost by their own action. So, we are in this terrible recession and the Government are making matters worse and are contributing to a substantial increase in unemployment which is the biggest single crisis facing the country now and for the years ahead. It is difficult to see how the Government's policy will succeed in creating new jobs in the years ahead because of the many punitive measures they are introducing and which act as a serious disincentive to investment in every sector of the commercial and industrial life of the country and which also affect wage earners in the levels of PAYE, PRSI, charges for services, the huge increases in VAT and the continuous flood of taxation increases. The community are becoming punch drunk from tax increases and unless there is a re-think on the Government's part the prospects for the nation are not bright. However, that is for another day's debate.
As I have said, the Bill proposes the introduction of radical new local taxation measures. It enables the Minister to require the manager to levy charges for services which will generate revenue equal to the combined poundage of the domestic and agricultural rates. That is a very serious proposition. There is evidence that the Government are obsessed with taxation. Every possible means is devised to extract contributions to the Exchequer out of the wage earner's pocket. This Bill represents a major change in taxation legislation and opens up a new era where additional penal taxes can be levied. The Exchequer obligations to fund local authorities as laid down in existing legislation are being removed in this Bill. The effect is, of course, to leave an open-ended situation where the Minister can apply the squeeze and the county manager must respond while the elected members of local authorities look on and play no useful role in the imposition of taxation other than to observe the manager's actions.
Our other major objection is to the decision to make the levying of taxation an executive function. The Ceann Comhairle will agree that this is a complete negation of local democracy. It is the opposite to everything the Minister's party and the Coalition parties have stated in this House and in policy documents over the years. It is dishonest to suggest that the proposals in this Bill represent a devolution of power to local authorities. In a democracy the power to levy taxes must always lie with the elected representatives of the people. There should be no taxation without representation. The elected representatives of this parliament will never allow the civil service to decide taxation measures. The elected members of local authorities should not be expected to allow city and county managers to decide taxation measures in their local authority areas.
I understand that the General Council of County Councils made a draft available to the Minister on their ideas of financing and the powers of local authorities. I do not know whether the Minister has made any response to the suggestion as yet. In their submissions they quote from an ESRI report on local taxation — No. 84 — the following extract:
The arguments that are advanced in favour of maintaining a significant role for local taxation as a source of finance for local expenditure seem to require that genuine accountability and answerability in fiscal matters to a local electorate exist and this in turn seems to require that the local authority at the very least controls the rate at which local taxes are levied.
I do not consider that the manager is the local authority. The legislation is drafted in such a way that the Minister can say that when he refers to the local authority he is referring to the manager but most members of the public feel when the Minister makes reference to the local authority that he is referring to the elected members. Many people do not understand the division of power that exists at local authority level between the manager and the members.
If there is one power that I and members on this side of the House consider to be essentially a matter for the members of local authorities as distinct from the manager, it must be the power to levy any form of taxation. The introduction of these new charges cannot be considered as anything other than taxation. If we are imposing new charges we are imposing new taxation and all decisions in relation to their introduction and the level at which they are imposed should be made only by the elected members. The members of Fine Gael and Labour who form the Coalition Government should realise that if they support this Bill they are destroying a long-standing principle which has applied in regard to taxation measures not just in this democracy but in most democracies throughout the world. One cannot equate the previous provisions for the charging for services, which represented a very minor amount of money, with the provisions in this Bill to levy charges which will bring in amounts equal to the rate poundage. We are talking about very heavy levels of taxation. It cannot be called anything other than taxation, penal taxation, in fact, as will be proved to be the case.
We find ourselves in the position that in general we subscribe to the principle that local authorities should have the power to charge for services but only to supplement their income, to supplement existing revenue sources. One of the principal sources of revenue has been the direct grant from the Department. In abolishing section 9 the Minister is abolishing the Exchequer obligation to continue to fund local authorities in that way. He is replacing it with a very unsatisfactory instrument which will be the cause of much dispute at local authority meetings in the years ahead. It is well known throughout the local authority service that county managers and senior officials in local authorities were opposed at the outset to the introduction of these charges. They held special meetings and insisted they would resist them. However, their resistance melted overnight. As I understand it, a meeting was held between the managers and the Minister —I am open to correction on this because I was not present — and at that meeting the Minister gave an assurance to the managers that they would have the authority to decide on the charges; in other words, it would be an executive function. Once they got that commitment from the Minister their resistance disappeared. They realised that when the Minister had got his Bill through the Dáil they would have one of the most powerful weapons county managers had got in their hands since the establishment of the county managerial system.
County managers have not said one word in opposition to the levy of these charges, whereas all last year they were very unhappy and critical of the notion that they should have to impose charges. Their opposition disappeared because they got their way with this Minister and with this Government. Under a Fianna Fáil Government they would not have got this power. Fianna Fáil would have ensured that the true principles of taxation would have applied: no taxation without representation. A county manager is not elected by anyone. Taxation should be levied only by those who have to face the electorate, who have to put their names on the ballot paper for election or rejection. They are entitled to levy taxation because they are answerable to the people. A county manager is well protected within the system, where he cannot be made answerable to any section for his actions, other than if he absconded with money or if he broke the law in some other way. However, he will now have power to levy charges on the people. I know the Minister's answer will be that the estimates have to be adopted by the council members but that is a weak response. The Minister has diluted the whole principle of the levying of taxation and I say shame on him for doing it. On this side of the House we will not support him in this matter.
Local authorities have had financial difficulties. It would have been satisfactory to allow them to bring in these charges if the existing sources of revenue were to continue so that they could overcome their financial difficulties by levying charges as was originally intended and as was originally understood before this major change took place. They would have been able to meet their full financial commitments by the levying of these charges. They would have been able to work off their overdrafts and possibly to recoup the health boards and the Office of Public Works from whom money is being withheld. The financing of local authorities is in a critical state. The Minister knows that many of them have only been able to strike a rate by refusing to pay the health boards or the Office of Public Works for drainage works carried out by that office. They have statutory obligations to pay other public bodies moneys for services in which local authorities themselves are not directly involved.
In this House it is difficult to get time to bring in reforming legislation but it is in this area that the Minister should have been concentrating his energy and his thoughts. There is a great need for new legislation, for reform of the local taxation system and the financing of local authorities. That area is full of anomalies and it is the cause of much frustration to members of local authorities that they continue to be burdened with these charges. They existed when Fianna Fáil were in office and when the former National Coalition Government were in office. These statutory obligations have been with local authorities for 30 years. I find the Minister is inclined to answer points by saying that similar situations existed when Fianna Fáil were in office. We are here to try to improve the system and if we can do that jointly everyone will thank us for it. However, nobody will thank us for dealing with small, petty political points across the floor of the House. I am anxious to make a positive contribution and to assist the Minister to improve the operations of local authorities. That is the matter we are discussing here and for which he has responsibility.
If the Minister had proceeded along the lines we intended and which were originally enunciated by the then Minister for the Environment, Deputy Peter Barry, it would have been possible to do some of these things. It would have been possible for local authorities to consider expanding existing services and the introduction of new services. They could have facilitated the implementation of new legislation. We passed legislation dealing with litter but the local authorities did not get any substantial funds to implement the main provisions in that Act. We also passed legislation with regard to water pollution but, again, very little money was given to implement it. The effectiveness of such worthwhile progressive legislation has not been seen on the ground because local authorities have not had the funds to administer properly the new legislation. We had long and useful debates in this House on these various measures but when the measures passed into law the local authorities were able to make only a token gesture towards their implementation because of their financial situation.
It was thought in view of the new charges being imposed that the extra revenue would allow local authorities to be more positive about legislation. At the moment they cannot carry out fully their responsibilities in this area. The point is that we are not getting extra revenue under this proposal. We are replacing existing revenue sources and that is the kernel of the Minister's intention. What started out as a good idea to provide local authorities with more financial freedom to undertake new services, to expand existing services, to carry out their responsibilities more fully and to meet their financial obligations in a realistic way has come to nothing. All the great hopes have been dashed.
A useful progressive measure has been transformed into an instrument that will replace the responsibility of the Exchequer to fund local authorities in lieu of domestic and agricultural rates which this House abolished. In doing so this House placed an obligation on the Exchequer to fund local authorities in respect of those amounts. In deciding that, this House proposed to change the onus from direct taxation such as rates to indirect taxation by way of funding through the Exchequer, with the Exchequer collecting the money by way of VAT and PAYE. These forms of taxation were increased substantially to fund the Exchequer in order to enable it to replace the moneys the local authorities had obtained through the rates. We have suffered the increase in taxation but now we are going to impose charges locally and relieve the Exchequer of the responsibility of funding the local authorities. At the same time, the Exchequer will not make a corresponding reduction in the increase of taxation introduced to provide that money. It is a continuation of this wave of taxation measures which the Government are hell bent on imposing on the people.
The Minister is well aware that local authorities regard the full cost of domestic rate relief as being the responsibility of the Exchequer. Any additional charge to be levied to relieve Exchequer liability can only be seen as rates introduced under a different guise. No words of the Minister can change the reality of that, the Minister is now reneging on the Exchequer responsibility and in doing so he cannot expect the support of this party unless a commitment is given in this Bill to pay a fixed amount each year in lieu of domestic and agricultural rates, otherwise the managers' charges will be used to replace the rates as the main source of local authority revenue.
In regard to the charges themselves I would like to ask the Minister some questions. Could he clarify whether he proposes that any of these charges could be imposed on a country-wide basis without regard to whether the householder has the benefits of the service for which he is being charged? Otherwise it would seem that the local authority may introduce a charge only where a person is benefiting from a service provided by the local authority. I would like the Minister to clarify that that is so and that if I have the benefit of a refuse collection and the local authority decide that they will introduce a charge for refuse collection I will be obliged to pay it. If I am in an area where there is no refuse collection will I in any way be charged for a service from which I am not benefiting? It would seem that that could not be so, but you never know with legislation. I would like to hear the Minister on that.
I would like him also to clarify whether a householder can opt out. If I decided that I do not want to pay £30 or £50 a year—or whatever the figure is; it might be £200 or £300 from the way the Minister is going—the local authority may decide that I am not a person who would qualify for a waiver. I may feel that I am not able to pay the charge but the local authority may not agree. I decide that I do not want the service because I cannot pay the charge and I put the stuff on the back of a trolley and take it off to burn it or dump it myself. In a case such as that has the householder the right to opt out? Many people are concerned about this because if a substantial number of householders in a street or an area adopt that attitude and decide to opt out it will not be economically viable for a local authority to continue to provide a refuse collection service in many of these areas and the other householders who had agreed to pay the charge would be without a service. The Minister must have given some thought to this because the question has been raised in a number of local authorities. I would like to hear what he proposes in this regard. I understand that one county manager informed his members that if a certain percentage of householders — I forget the percentage — refused to take the service in an area then no such service would be provided. He was referring to refuse collection. Does the Minister agree with that? Has he made any provision for this type of situation? How does he propose to collect these charges from people who do not want to pay them? Is it his intention to bring all of them to court as is provided somewhere in the Bill and will we arrive at a conflict situation over these charges in that way?
In regard to water supplies in urban areas there is no doubt that the reaction from large sections of the community, people who are already paying what they consider substantial rents for local authority houses, is that they are not at all enamoured of the notion that they should now have to pay up to £50 or £100 to a local authority for water which traditionally has been supplied free of charge to householders in urban areas. Will the Minister turn off the water if the householders refuses to pay the charge or, vice versa, if the householder turns off the stop tap outside his hall door will the liability to pay stop also?
What administrative arrangements are being entered into at local authority level to ensure the smooth introduction of these charges if the Minister intends to proceed with them? Who will collect the charges? Are we establishing a whole new set of employees and range of jobs at local authority level for the collection of these charges, bearing in mind that employed in every local authority are rate collectors who have very little to do following the abolition of house and agricultural rates and also in many local authorities the amount collected in rates and the cost of collecting them? I recall one local authority area where the cost of collecting the rates was £0.25 million and the amount of rates collected something like £1.2 million. Where are the economics in the system? Where is the Minister's intention to ensure efficiency and value for money, as he mentioned in his Estimate speech here some weeks ago? I have asked these questions in my contributions. Since then I have had no response.
I ask again what the Minister's intention is with regard to rate collectors. These people are employed at a very substantial salary. They have a very small workload and their job in many cases can be done in a few weeks or months of the year. Now we have the Minister's intention to impose the collection of charges on householders. Who is to collect them? Will the rate collectors be involved in this? After all, these charges are only replacing the rates and there is no point in saying that that is not so. What estimates has the Minister got of the cost of collecting these charges to enable us to see the full value to each local authority and the net income to be derived from the charges, having paid the cost of collection and the cost of office work etc. which will arise.
Also I would like the Minister to inform the House whether public bodies will have to pay these charges. Will the health boards, hospitals and old people's homes have to pay them? If so, what provision has been made in the 1983 Estimates to enable them to pay these charges to the local authority? In the Estimates which have been published has any provision been made for wage increases in this year? It seems to me an anomaly that no provision is made for wages increase and the Minister is deficit-budgeting in a big way in regard to each local authority in that respect.
What arrangements will be made exempting certain categories of beneficiaries from the charge and what arrangements will be made under section 5, the waiver of charge on the grounds of personal hardship? Will this be a reserved function? I understand that it will. I intend to put down an amendment along the lines that, as well as the power to decide whether charges will be introduced and the level of the charges being reserved functions, the making of the waiver scheme would be a reserved function. It can be administered by the manager but the scheme itself must be adopted by the elected members. Section 9 is one of the principal sections of the Bill. In this section it states that the Minister shall make to a rating authority a grant not exceeding the aggregate of the allowances made by the local authority under sections 3, 4 or 6 of the 1978 Act.
In reply to Parliamentary Question No. 662 in the Official Report, Volume 342, of 17 May 1983 the Minister said:
Fixed allocations have not been made in respect of rates support grants. In the case of the domestic rates grant, the voted provision for 1983 will be divided among local authorities on the basis of rateable valuations of the relevant domestic property in each area and, in the case of the grant in lieu of rates on land, on a basis equivalent to land valuations.
Would the Minister state what the exact mathematical formula is on which he made his decisions in regard to the grants to be made in each local authority, because there is no requirement in the Bill to divide a fixed grant in the way in which the Minister stated in reply to the parliamentary question? The Bill merely says the grant shall not be greater than the aggregate of the allowances in sections 3, 4 or 6 of the 1978 Act. Section 9 gives the Minister wide discretionary powers in determining the amount of the fixed grant each year. The parliamentary reply seems to indicate that the amount of the fixed grant is based on rateable valuations of the relavant domestic and agricultural properties but there is no such provision in the Bill and one of our major objections is the fact the this wide discretionary power is available to the Minister.
There is an obvious contradiction in what he informed me on 17 May and what is contained in the Bill. It is obvious that the Minister can reduce substantially the amount of the grant each year and then direct the manager to impose charges to make up the shortfall. That is clear from line 17 of subsection (2) which states "shall include in such manner as the Minister shall direct a provision in respect of such excess". That is a very important part of the Bill and gives the Minister power to direct the manager to introduce charges and the members have no say whatsoever. That is again in contradiction of what the Minister stated when he introduced this Bill.
In reply to Parliamentary Question No. 662 in the Official Report, Volume 342 of 17 May 1983 I was also informed that local authorities had been given a preliminary estimate for the payments they may expect to receive this year. However, when the Galway County Manager presented his estimates to the members he stated that there would be no upward adjustment of fixed State grant in respect of domestic and agricultural rates during 1983. Which statement is correct? Is the Minister right in saying the the estimates he has notified are merely preliminary estimates and that there can be an upward adjustment during the year, or is the Galway County Manager correct in the information he received from the Department that there will not be an upward adjustment of the fixed State grant?
The local authorities are expected to pay for services for which they have no direct involvement or responsibility. They provide funds for sheep dipping, which is obviously a matter for ACOT to whom that responsibility should be transferred. We would welcome legislation which would carry out major reforms in the local authority system, not this imposition of a tax to replace rates. The administration and the funding of grants for school meals and higher education are strictly matters for the Department of Education and the local authority should not be involved. Weights and measures, courthouses, coroners and inquests should all be the responsibility of the Department of Justice. The responsibility for abbatoirs, slaughterhouses, meat, milk and dairies should be transferred to health boards. The whole question of malicious injuries is obviously the responsibility of the Department of Justice and those charges should not fall on local authorities who do not have the resources or the responsibility for the levying of malicious injury claims. The question of the cost of arterial drainage is a matter for the Board of Works and I urge the Minister to transfer the costs to them. Welfare cost allowances should also be transferred to health boards.
The time has come for the Government to consider transferring from central administration to local authorities the administration of schemes with which they are directly involved, where they have an active responsibility and where they participate in administration locally. Schemes continue to be administered centrally at a huge cost to the taxpayers. I urge the Minister to consider transferring the administration of new house grants, home improvement grants and group water supply schemes to the local authorities, away from Dublin, this second layer of bureaucracy which feels it has the right to oversee all decisions in regard to the administration of grants which they are funding. It is an unnecessary cost on the taxpayers and a waste of their money. I know the Minister of State agrees with me. I hope he has convinced his Minister and the Government. He will get full support from this side of the House for any measures to transfer the administration of housing grants and other schemes of that nature to the local authority where the real knowledge in these matters exists. The Board of Works supply money for local loans for water and sewerage schemes and they are administered from Dublin. I suggest that the Department of the Environment should control the allocation of funds to local authorities and the administration of schemes, house grants, etc. should be carried out in each council area where there is established staff and administrative procedures perfectly capable of dealing with the successful administration of these schemes.