Derek McDowell
Question:27 Mr. McDowell asked the Minister for Finance if he will introduce carbon energy and other green tax measures in the future; and if he will make a statement on the matter. [23718/98]
Priority Questions. - Carbon Energy Tax.
I am sure the Deputy will appreciate that it would not be appropriate for me to discuss what taxation measures I may or may not introduce in the forthcoming budget. However, with regard to the question of a carbon energy tax, I would like to point out that there are many forms of carbon tax and it is important to emphasise that Ireland has relatively high taxes on energy use at present, particularly those that relate to motoring including value added tax and vehicle registration tax.
The House will also be aware of the carbon energy tax that was proposed by the European Commission in 1992 and on which no agreement was reached. Following the failure to reach agreement on that proposal, the Commission introduced a proposed directive on the taxation of energy products in March 1997. The proposed directive suggests increased taxes on items such as petrol and proposes new taxes on coal, gas and electricity. There are also complex arrangements to assist energy intensive industries with both obligatory and optional provisions for relief from the tax suggested. No level of agreement has been reached on the proposed directive and discussions are ongoing by technical experts reporting to the ECOFIN Council.
With regard to the issue of other so-called green tax measures, I am sure the House is aware of the working group that was set up following the budget of 23 January 1996, whose remit is to examine the strategic impact of taxation on environmental policy. This interdepartmental group, which is chaired by my Department, prepared a report which was discussed by the taxation strategy group in the context of the preparations for the budget. I am sure the Deputy will understand that, in advance of the budget, I cannot comment on any taxation proposals which the group may have recommended.
I thank the Minister for his response. The Minister will be aware that at the Kyoto conference on climatic change, Ireland subscribed to certain targets to be met before the year 2010. He will also be aware that there is a widespread body of opinion that we cannot meet those targets without taking drastic action. Has the Minister's Department commissioned any work to advise as to the financial and economic impact of the Kyoto targets, and what measures are being considered in order to meet them?
I am aware of the agreements entered into under the Kyoto Protocol. I am concerned about a number of aspects concerning how Ireland will implement it, particularly with regard to our international competitiveness, the effect that any such increased taxes would have on the consumer price index, and the impact that such taxes might have upon less well off members of the community. These matters will be borne in mind in the Government's considerations of various proposals put forward by my colleague, the Minister for the Environment and Local Government, in order to ensure that Ireland complies with its obligations under the Kyoto Protocol.
Does the Minister agree that, in order to have any significant positive environmental impact, carbon energy tax would have to be set at a level considerably above its current rate? I am talking about petrol and energy prices.
The Deputy has put his finger on the difficulties facing the Government regarding some of the suggestions put forward by some groups as to how this problem should be tackled. As the Deputy is probably aware, in Europe and elsewhere it is felt that increasing taxation on some of these products is the way to lessen their use. However, as I pointed out in my supplementary reply to the Deputy, that creates other problems. The Deputy is correct in saying that some of the figures put forward as to what the maximum increase should be — in order to reduce the usage of energy products — would have a considerable effect on the areas I mentioned in my supplementary reply. Yes, I am so aware and that will be borne in mind by the Government.
I give the Minister an opportunity to comment on press reports that the Government is considering imposing a tax on car parking spaces in the centre of Dublin and presumably in other cities as a benefit in kind.
The Deputy is aware that I consider all matters relating to taxation in the period before the budget.
I presume the Minister will not comment.
I learned from a previous experience never to confirm or deny any reports.
Can you explain, a Cheann Comhairle, why three supplementary questions were permitted on Deputy McDowell's priority question while only one was permitted on mine?
The supplementary questions were asked within the allotted time of six minutes. I am amazed the Deputy has not read the rules of the House and particularly those governing priority questions.
I have read the rules.
The Deputy is inferring that I am favouring one Deputy over another. If the Deputy reads the rules he will know that I am acting within them.
You are not.
The number of supplementary questions asked is not relevant. I object to the inference being made by Deputy Noonan which is unworthy of him.
It is not an inference. It is a statement.
I hope Deputy Noonan does not threaten to leave the Chamber. I would miss him even if the Ceann Comhairle did not.
The Minister should keep this going. The Ceann Comhairle will look after him.
Deputy Noonan should not be so sensitive. He always had a sense of humour and I hope he retains it.