Dáil Éireann debate -
Wednesday, 2 Dec 1998

Vol. 497 No. 6

Financial Resolution No. 4: Vehicle Registration Tax.

The Taoiseach:

I move Financial Resolution No. 4:

(1) THAT as respects vehicle registration tax charged, levied and paid as on and from the 1st day of January, 1999, subsection (3) (inserted by the Finance (No. 2) Act, 1992 (No. 28 of 1992)) of section 132 of the Finance Act, 1992 (No. 9 of 1992), be amended by the substitution of the following paragraphs for paragraph (a):

"(a) in case the vehicle the subject of the registration or declaration concerned is a category A vehicle which has an engine of a cylinder capacity exceeding 2,000 cubic centimetres, at the rate of an amount equal to 30 per cent of the value of the vehicle or £250, whichever is the greater,

(aa) in case the vehicle the subject of the registration or declaration concerned is a category A vehicle which has an engine of a cylinder capacity exceeding 1,400 cubic centimetres, at the rate of an amount equal to 25 per cent of the value of the vehicle or £250, which is the greater,"

(2) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

Financial Resolution No. 3 provides for an excise duty reduction on auto liquid petroleum gas which, when VAT is included, amounts to approximately 1.8p on a litre with effect from midnight tonight. The decrease is expected to cost the Exchequer approximately £5,000 in 1998 and almost £100,000 in a full year. The effect on the CPI will be negligible.

The change is also expected to increase consumption of auto LPG by almost 2.5 per cent. Auto LPG is an environmentally friendly fuel. Reduction in the rate will encourage greater use of this cleaner product as a road fuel.

Financial Resolution No. 4 changes the structure of the vehicle registration tax for private cars in category A. It makes the following changes: the tax will now have three separate rates based on engine capacity which replaces the existing two rate system; the rate of tax on cars of less than 1,401 cylinder capacity remains the same at 22.5 per cent of the open market selling price, as determined by the Revenue Commissioners, and for all other cars, the new system means a rate increase.

This change will bring in significant extra revenue to the Exchequer but the change in rates is not intended solely as a revenue raising measure. Instead, these changes are a first response to the undoubted environmental impact of motoring in terms of air pollution, traffic congestion and fuel consumption.

The new structure will mean that for cars with an engine of a cylinder capacity of up to 1,4000cc, the rate of vehicle registration tax will be 22.5 per cent. This is the existing rate for these cars under the current system. For cars with an engine of a cylinder capacity of 1,401cc to 2,000cc, the rate of VRT will be 30 per cent. This represents an increase from the current rate of 22.5 per cent. For cars with an engine of a cylinder capacity of 2,001cc and over, the rate of VRT will be 30 per cent.

This means that for cars with an engine of a cylinder capacity exceeding 2,000cc, but not exceeding 2,5000 cc, the rate is increased from 22.5 per cent to 30 per cent and for cars with an engine of a cylinder capacity exceeding 2,500cc, the rate is increased from 28 per cent to 30 per cent. The new structure will come into operation with effect from midnight on 31 December 1998. The Exchequer yield from these changes is estimated at £43 million in a full year. It is estimated that these measures will increase the consumer price index by just under 0.1 per cent.

Mr. J. Bruton:

I will not oppose Financial Resolution No. 3, but I will oppose Financial Resolution No. 4 on the grounds that to increase the tax on cars at this time is wrong since there is no adequate transport policy to provide an alternative for people to get to and from work other than by using a car. The public bus service is inadequate and not adequately supported by public funds. The bus fleet is extremely old and many areas do not have adequate routes. New suburbs, in particular, are not being adequately serviced by a bus service. Reports on the rail service show that it is unsafe and investment is not being made to deal with this matter on an adequate basis.

If the additional taxation on cars was used to fund a substantial enhancement of the bus and rail services, one might have a somewhat easier conscience in supporting such measures. The Government is seriously failing on the issue of traffic. We acknowledge the traffic problem has been brought about by our economic success. The almost 50 per cent growth in our economy in the past five or six years has created a greater demand on our infrastructure. This demand has to be met by radical action by the Government to reorientate traffic into public transport.

We cannot expect people to use public transport and leave their cars at home unless there is an adequate, clean and modern public transport system. People are used to a certain level of comfort nowadays in their cars. Cars have more modern conveniences than they had 15 or 20 years ago. People will not leave their cars at home and travel on a dirty rattling bus. They will expect the same level of comfort on a bus or train as they get in their cars, in which they do not have to stand leaning on somebody or perhaps squeezed in, as is the case on the DART in the mornings and evenings. We cannot coherently ask people to leave their cars at home unless we have proper public transport.

We oppose this increase in vehicle registration tax because it is being misapplied. If the money was used to put in place a proper public transport service, we might not object to it. I already indicated that I was disappointed at the Government's failure to tackle the green taxation issue, to acknowledge that tax is an instrument for changing behaviour and to deal with the issues publicly flagged by the Minister for the Environment and Local Government.

This Government has reached a point where Ministers think it is credit worthy for them to indicate they will put a matter to their colleagues. The Minister for the Environment and Local Government, Deputy Dempsey, obviously felt he was gaining some kudos by telling the Sunday Tribune about all his ambitions for green taxation. We now know he failed to get any of his ideas accepted at the Cabinet table. This issue has been kicked off to the social partners which is a sure guarantee it will not happen, because everyone must agree before anything is done in that particular context.

Mr. D. Ahern:

That is an awful slight on the social partners.

Mr. J. Bruton:

We are obliged to deal with the green taxation issue under the requirements of the Kyoto agreement. Ireland, as an economy, could face serious fines and structural difficulties in the first decade of the next century. We may have to close one or two of our electricity generating stations because we will be exceeding the global warming limits agreed at Kyoto, to which the Government signed up. There is a possibility that the ESB will have to close one part of Moneypoint because that is the only way Ireland can keep within the limits we agreed. If that happens, it will be because we did not prepare in time.

We could have done something by aggressively investing in public transport while at the same time discouraging private motoring. We could have done something to reduce global warming in good time and avoid what may transpire to be a very serious economic crisis in the first decade of the next century because of our failure to comply with the Kyoto agreement.

The ultimate environmental damage being done to the planet by global warming is one of the most serious justice issues in modern times. From our economy's point of view, it is an exceptionally serious issue because we have entered into international commitments which could poleaxe our economy if we fail to fulfil them. If, like the old cliché, a stitch in time saves nine, we took measures now to reduce the extent to which we produce global warming gases from motoring, electricity generation and so on, we would be able to live within the limits of the Kyoto agreement. We are not willing to do that now because it is not urgent. I believe it is inevitable that we will pay a high price at the end of the day.

This measure, which is the only one being put forward that has anything to do with this, is a very modest one. I oppose it because it is not introduced in the context of a broadly based public transport policy that emphasises buses and trains and ensures people have a more humane and less self-centred and atomistic existence than that which is currently the pattern of modern life.

Mr. Ferris:

We do not have a problem with Financial Resolution No. 3 which is just a token. I do not know if anything will be done to cut down on unwanted gases. We should have been more imaginative in this regard. I have a problem with Financial Resolution No. 4 which we will oppose. I am amazed the Minister decided to introduce this range of VRT increases despite the effective lobby in recent months. Those on the Government side participated in that lobby and gave their support to the Society of the Irish Motor Industry. On the last occasion the Government sought advice on this subject, it took the advice of the industry, based on the facts and figures it produced, and reduced VRT, which increased car sales and created additional wealth and employment. On this occasion it lobbied the Government on the basis that if there was a genuine reduction in VRT, it could lead to a further growth in employment.

The cubic capacity of cars ranges from 1400cc upwards and these are the type of cars people buy as replacements if they want to ensure they get to work safely and on time. In addition to the problems created by this additional tax of £43 million on the industry, thousands of second hand cars with VRT are sitting in the forecourts of garages throughout the country. Garage owners cannot export those cars unless they are allowed reclaim the existing VRT, to enable them to compete with similar cars from other countries.

This brings into focus the difficulties with imported cars from Japan and elsewhere which are not meeting the same standards as the newly designed modern cars on sale here. This is a double edged sword. We should at least give garage owners the opportunity to compete by exporting second hand Irish cars which are of a much higher standard than imported cars from Japan. However, that cannot be done because of the way VRT is applied to new car sales.

The motor industry provides hired transport for tourists. Many people in my constituency are involved in this industry and have experienced difficulties with the cost of cars and the provision of insurance and VRT. It almost pays American and other tourists who come to Ireland for a motoring holiday to go across the Border to hire a car. That means people in the South could lose their jobs.

Although these taxes are intended to raise revenue, we should look at their long-term implications for the industry and for the people employed in the industry. For that reason, we will oppose the proposal to increase VRT on new vehicles.

Mr. Barrett:

I join my colleagues in opposing the proposed increase in VRT. I am astonished that the Taoiseach, whom I respect for presenting things in a practical way, is trying to convince us that this is being done in the interests of the environment. That is the last straw. It is bad enough to tell us that an increase of 5p on a packet of cigarettes will save our health.

The reason there are so many cars on the roads is low interest rates and special packages being offered by garages through finance companies and scrappage schemes. We will not stop cars being bought by increasing VRT, but we will make it difficult for people who have no other form of transport. If young people want to buy houses, they must move out of the city into the countryside where there is no public transport or provision for a transport network. Yet we are telling these people it will be more expensive to buy a car. Surely it is safer for people to buy new cars than to allow them to drive old ones?

I would have thought Government policy would have been in keeping with its policy last year to slightly reduce VRT. The Government may argue it is not changing the rate for cars up to 1400cc. However, the price is still too high if it is compared with European costs and the price of insurance. We must also look at its effect on the tourism industry, as Deputy Ferris said. From an environmental point of view, it would be better for people to drive new cars than old ones as there would be less emissions from exhausts.

I do not see any proposals in the budget to deal with old buses which pump exhaust fumes into the air or with heavy vehicles which cause environmental problems and should be off the roads. This is another excuse to raise revenue. If the Government wants to raise revenue, it should say so rather than arguing for this increase on an environmental basis.

Increasing people's tax relief and then taking it back from them will make their day to day living more expensive. I heard a great deal today about the tax package. However, people's wage packets will not increase by much every week. As Deputy Noonan said, we were not told about the increase in the price people will have to pay for drugs if they are ill. VHI payments have been increased so that will take away from a person's tax relief if he is a VHI patient. If we must pay more for our cigarettes and motor cars, the £6 increase in tax relief will not be long disappearing.

I join with my colleagues in opposing this measure. It is time we brought the cost of living into line with other European countries, particularly in terms of motoring. The price of a car here compared to that in Great Britain, let alone on the Continent, is frightening. We must send a message to the Government that it is time the Irish motorist got a fair deal compared to those in other European countries.

Mr. Sargent:

It is a pity Financial Resolutions Nos. 3 and 4 are not being taken separately given that there is some difference between the two. Financial Resolution No. 3 is worthy of support, although it is a small measure. I am sure the Taoiseach will claim it is a major step forward.

We are now in harmony with Northern Ireland where there is no excise duty on LPG. Unfortunately, however, diesel will still be seen as a cheap option. We now know it is a serious cause of respiratory illness and it has carcinogenic effects. We must go further in radicalising our transport policy.

There is great disappointment that there are not more green taxation measures in this budget. Kicking this issue to the social partners is like Keith Wood kicking the rugby ball into the crowd in the hope of a good result. However, it depends on what the crowd does with it. In this case we must show political leadership and face up to our international responsibilities. Those responsibilities will come back on us like a ton of bricks in 2012 when we are asked to account for the commitments we have legally entered into in limiting CO 2 emissions.

The VRT increase in Financial Resolution No. 4 may dissuade people from purchasing cars, but it will not dissuade them from using them. Once someone has made a financial commitment of that magnitude, he will be encouraged to use that product as often as possible. This will cause greater problems which we are supposed to be trying to resolve. It is cynical to describe this as an environmental exercise when the park and ride schemes only begin at 10 a.m. and do not deal with rush hour congestion. If they were used as we would like to see them used, there would not be enough buses to accommodate the numbers of passengers. The Government must come back with the type of radical approach which will not be seen as a cynical exercise such as this. This will mean a budget which would put green taxation at the centre of reform. It would take tax off labour and ensure that tax on consumption is at the centre of our tax code. Only then will we begin to see people motivated by what most motivates them — financial advantage. People will be financially better off by making better use of better public transport. This will not come until the Government shows some political leadership.

Other countries are far ahead of Ireland on this issue. They have introduced LPG bus fleets, they have lower tax on environmentally sound activity and higher tax on environmentally damaging activity. Unless we grasp the nettle, we will find ourselves paying between £500 million and £1 billion by the year 2012 or thereabouts. We entered into a legally binding commitment. If Deputy Dempsey was serious, he would have resolved these issues in Cabinet before seeking to make political mileage out of claims he cannot substantiate.

We are still waiting to see the first glimmer of green taxation from the Minister. When we begin to see such taxation perhaps we can begin to take the Government seriously on its international commitments on the environment.

An Ceann Comhairle:

For the Deputy's information, resolutions 3 and 4 will be put to the House separately.

Minister of State at the Department of Education and Science (Mr. O'Dea):

This measure will affect only a minority of car purchasers. The fact is that 57 per cent of cars in use are under 1400 cc. This is a tax targeting measure which, hopefully, will encourage people to buy smaller cars. The benefits of this should be obvious, even to Opposition Deputies.

The point has been made that it is hypocritical of the Government to present this as an environmental measure. It is not being presented exclusively as such a measure. It is hoped that it will have a beneficial impact on the environment in that it probably will encourage more people to buy smaller cars. This has been acknowledged by Deputy Sargent. However, it is also a revenue raising measure. VRT is a well-established source of revenue under successive Governments. There is an income tax giveaway of £581 million in the budget. We have to obtain revenue from some source and we must protect the sources we have, particularly where increasing a source of revenue will not have knock-on economic implications.

The Opposition has made the point that we need a proper transport fleet, we need to improve the roads infrastructure and so on. We concede these issues but we have to get the money from somewhere. Raising money in this way will make a contribution to these objectives. This measure will have some environmental impact. However, it is also a revenue raising measure. When one looks at the unprecedented increase in car sales due to the economic growth of the past few years, no one can doubt that the motor sector is well able to afford this modest £43 million. It will not put a dent in that business. It is a textbook example of an area in which we can raise revenue without adverse economic implications.

Mr. Barrett:

The punter will pay for this, not the motor industry.

Mr. O'Dea:

This measure will also have a positive environmental impact. I cannot understand why the Opposition will not support this measure. I have not heard any logical reasons for their position.

Mr. Barrett:

What about the price of cars here in comparison to the UK?

Mr. O'Dea:

Maybe we will hear something which makes sense before the conclusion of this resolution.

Mr. Deenihan:

It is fair to say that the Government tried to satisfy as many sectors as possible in this budget. Despite the welcomes I have heard from farm leaders, the average farmer will not welcome this budget as there is nothing it in for them. The motor industry will also be very disappointed. I do not have to remind the Taoiseach that this industry is responsible for about 46,000 jobs and takes in £2.2 billion in taxation. This is a substantial figure. Despite Deputy O'Dea's remarks about the £43 million which will be raised by this measure, I have heard from a reliable source in the industry that this measure could cost £100 million. Deputy Harney should seek clarification from the industry on this point.

The Irish consumer pays 25 per cent more for a car than the average European consumer. We import 40,000 used cars every year but we export none. Because of VRT our second-hand cars are not competitive. This budget presented an ideal opportunity to address this issue. The motor industry had a strong lobby and became very good at lobbying. However, it has delivered the goods for the Government, the country and the taxpayer. This is the first attempt to halt that growth and to de-motivate the motor industry.

Whatever gains the average taxpayers will receive from the small PAYE concessions will be eroded by this measure. This provision will erode whatever gains the average motorist is receiving by changes in PAYE. In most houses, there are two people working. In many cases, particularly in rural areas, people have to travel long distances to work. People need more powerful cars and they are buying bigger cars. This measure will discourage them from doing so. The Government is not going to retract this provision. The Taoiseach has many friends in the motor industry. I have seen him associating with many of them at places such as Listowel races. However, I do not think they will be so kind to him at the next race meeting.

The Taoiseach:

We have 144,000 new cars, 40,000 of which are imported.

Mr. Deenihan:

The Taoiseach will have to wait for the effects of this measure.

Mr. M. Smith:

The Deputy should be more positive.

Mr. Higgins

(Dublin West): The Minister for Finance stated that in addition to the changes in VRT he proposed to take a number of initiatives which have been recommended by various parties to address the growing traffic problem in urban areas. In this context, it is clear that he is bringing in this measure under cover of sorting out the growing traffic problem. This is derisory and on that basis alone it must be challenged. To use the increase in VRT as an important vehicle to sort out traffic chaos is taking the people for fools. It is derisory. This Government is the first to try to introduce revenue raising measures under false cover. We saw the attempt to pass off the increase in duty on cigarettes as a health measure. Now we see a revenue raising measure passed off as an attempt to solve the traffic problem and improve the environment. This practice adds to the level of cynicism among the general public. Fianna Fáil expressed great concern at the issue of genetic engineering of plants but threw up their hands in helplessness. Nothing was done to deal with that question but a revenue raising measure is presented as one to improve the environment.

This measure will not work and must be placed in the context of this and the previous budget. Last year's large reduction in capital gains tax sent a clear signal to the section of society which buys big cars. They were being clearly told to continue to buy large cars. This year's reduction in corporation tax sends the same signal to the same sector. Top executives will continue to be rewarded with large company cars and this practice will continue to be encouraged by the Government. The Government's presentation of this measure as one which will improve the environment is not convincing when profiteers and landlord speculators are encouraged to buy large cars, take up even more space on our roads and pollute the air.

Working people and small self-employed people who need to drive a middle-range car to get to work or run their businesses will suffer from this measure while the extra tax will not create hardship for large corporations who give cars to their executives as benefits in kind.

Prohibitionism does not work. We must create viable and attractive alternatives to the private car. Investment in public transport is essential. The Government has taken no imaginative steps in this regard. Employers could be obliged to provide showers so that workers who cycle to work could shower before they start their day's work. Numerous imaginative measures of that sort could be taken.

The Government continually panders to petroleum companies who dictate our transport policy. Enterprise Oil and other main players in the petroleum market have made large gas and oil finds off our coast. In contrast to the Norwegian government, our Government will derive almost no revenue from these discoveries. The companies are not even required to use Irish workers in their enterprises. These conglomerates have no incentive to invest in research into alternatives to the petroleum-driven motor car. If these companies were obliged to invest some of their massive profits in research and development into alternative means of transport much more effective, safer and cleaner forms of transport would be developed.

The opposition to this motion is determined to reject the cynicism of the Government in presenting one revenue raising measure after another as attempts to promote health and improve the environment.

Mr. Shatter:

I have been listening with interest to the debate and I found the comments of the Minister of State at the Department of Education and Science, Deputy O'Dea, particularly fascinating. If this is a serious environmental measure I expect the Government to lead by example and to announce that all ministerial Mercedes will be replaced by cars which come below the level at which the extra tax is to be charged and that such cars will in future be provided to Ministers and Ministers of State.

Mr. D. Ahern:

And former Taoisigh.

Mr. Shatter:

That would be important if the Government seriously expects this to be accepted as an environmental measure. I am sure Deputy O'Dea will lead by example.

The Minister of State, Deputy O'Dea was in danger of competing with the gentleman on the Eamon Dunphy radio show with whom he has engaged in public battle and of whom he has been critical. The Minister of State's contribution would have been worthy of that comedy routine. If we wish to encourage people to use smaller cars we should give tax relief on smaller cars and not impose additional tax on bigger ones. We do not have a coherent public transport system. Large numbers of people depend on their cars to get to work. This Government has dismally failed to put in place the policies which are so badly needed.

The motor industry was referred to. We know that industry is booming and a historically high number of new cars are being purchased. However, the motor industry has created a substantial number of new jobs and could play a role in the export of second-hand cars. I do not believe the Minister for Finance has given any consideration to that possibility. Our economy is changing and the possibilities within it are changing too. In years gone by the idea of exporting second hand cars would have been regarded as fantastic. Now it is a possibility and that is something which must be examined in the context of the tax system.

Also of concern in this area is the manner in which every person required to use a car for business or domestic purposes is discriminated against in the context of the vast majority of citizens throughout the European Union. At the time of joining the European Union, an implicit promise was made to Irish people that cars which were more expensive here and which were taxed to a greater degree than in the vast majority of European Union countries would eventually, after an introductory period, be available at costs similar to those of our European partners. That is now not only not the case, the gap is being widened by the Government's policy. It is the wrong way to convince people, especially those dependent on motor cars to travel to work, that they are full participants in the European Union and are benefiting from being in a single economic entity.

Deputy John Bruton, the Leader of Fine Gael, referred to the general absence of a transport policy. The Government will raise additional revenue from this measure. In an earlier debate on physical and sensory disability, one element of transport policy was referred to which indicated the failure of the Government to take a comprehensive overview of what is socially necessary. This was the acquisition of 150 new buses by Dublin Bus and the appalling anomaly that none of these, which have been acquired with State funding, will be wheelchair accessible. Will any of the money raised by the additional taxes imposed go towards ensuring that even a reasonable number of the new buses being purchased for public transport purposes will be wheelchair accessible? Has any thought been given to that? The problem is that the action does not match the rhetoric in this area. In the context of my constituency of Dublin South, the absence of a transport policy has forced people to use cars. People who drive their cars in the early morning from areas such as Knocklyon, Firhouse and Dundrum find themselves caught in an hour of gridlock and the same in the evening when they return home.

Let the Government put in place genuine policies to encourage people to use public transport when there is a viable public transport system. At a time when there is not, when there are piecemeal policies and postponements of initiatives, such as the Luas from the Sandyford industrial estate to the city centre, and when the Government cannot get its act together, it should not impose additional taxation on the users of motor vehicles. What it should do, and would have the support of this side of the House for so doing, is discourage people from using what were referred to in years gone by as "gas guzzlers" and encourage them to buy smaller cars where it is feasible for them to do so in the context of their needs. In that context, if the Government intended to impose higher VRT on larger cars, the minimum it should have proposed this evening was lower VRT on smaller cars and it failed to do so.

Mr. Ardagh:

I warmly welcome the budget on behalf of the elderly people, social welfare recipients, carers and low to middle income earners in Dublin South-Central.

There are roads in my constituency which are narrow, so much so that it is impossible for two cars to pass each other. It is to be hoped that with more cars of an engine size smaller than 1400 cc being bought——

Mr. Shatter:

Do all cars in Drimnagh go in one direction?

Mr. Ardagh:

——it will be easier to access the various areas within my constituency.

There is a traffic problem in Dublin which must be addressed. This new measure, while raising £43 million for the Exchequer in 1999, will also reduce the power, size and speed of cars on the road in Dublin and this will have a positive effect on the movement of traffic in the city.

I sympathise with Deputy Deenihan's earlier remarks and with other Deputies from the country because they need large cars to travel the few hundred miles back and forth to Dublin each week in comfort. Thanks to the actions of the Minister for Finance, Deputy McCreevy earlier in the year, they will perhaps not mind paying the additional cost as they change their cars for that purpose.

Road accidents are often caused by fast, heavy motorised vehicles with high capacity engines in excess of 1400 cc and even 2000 cc travelling at very high speeds. This measure will help reduce the overall number of accidents which occur.

I found the lobbying by the motor trade threatening and aggressive. I received a letter saying if I did not attend a certain meeting, the motor dealers in my constituency would be informed of my absence from that meeting which was to be held in a hotel not far from Leinster House. I am on good terms with motor dealers in my constituency. One has his business beside my constituency office. He, like all motor dealers, has done tremendously well in recent years in the sale of new motor cars. The number of large, high powered cars sold recently has increased dramatically. It is only fair that those who can afford such cars pay the extra money which, at the same time, will reduce demand for large, fast motor cars which have a negative effect on traffic and accidents. For that reason, I have no hesitation in welcoming this financial resolution.

Mr. D. Carey:

I join Deputies who spoke against this measure. They gave various reasons for their opposition. Mine is that I do not believe there has been a proper examination of the use of cars. Regarding what Deputy Ardagh said, the number of fatal accidents involving large cars is considerably less than the number involving small ones.

Mr. Ardagh:

Not in proportion to the numbers on the road.

Mr. D. Carey:

Recent statistics have shown that deaths in motor car accidents have involved young people under 25 driving small cars. If the most prominent orthopaedic surgeons in our hospitals say one is safer in a larger car, why must the State always attack such vehicles? It is convenient in every budget for the Government to attack large cars.

Mr. O'Donoghue:

The Deputy should pick on someone his own size.

Mr. D. Carey:

I was involved in a major accident and could have been killed only I was in a large car. I do not view them as an object for snide remarks or sneering.

I would have been killed if I was not travelling in a large car.

Mr. Ardagh:

The Deputy was well insured.

Mr. D. Carey:

I was well insured. I do not know how well insured the Deputy is.

Mr. Finucane:

That comment does not befit Deputy Ardagh.

Mr. D. Carey:

Deputy Ardagh's snide remark does not become him. He is in a Department that should have researched this matter.

An Leas-Cheann Comhairle:

The Deputy should address his remarks through the Chair.

Mr. D. Carey:

I address those remarks to the Chair. Surgeons have put this point to me and that is why I have raised it here this evening. I was not trying to provide amusement for the Fianna Fáil Deputies on the Front Bench. I never provide amusement for Fianna Fáil and I do not intend to start now.

I am sure the Chair has met many senior surgeons and spoke to them about the causes of accidents. I am sure they never told him that they were caused because the motorist was driving a large car. The Departments of Finance and the Environment and Local Government are in collusion every time this convenience VRT tax is raised. They impose this tax on large cars, but that is wrong. We all have friends who were involved in serious accidents. More than 500 people are killed on Irish roads annually. Most of those accidents do not occur in the city. I accept the concerns of my fellow Deputies about the increase in pollution caused by the number of cars in the city. Most accidents occur in the country.

Many small farmers use their cars to transport their families and goods. I would not encourage farmers to drive small cars because their cars must be strong enough to pull a trailer full of produce. They use a car and trailer to move produce from one farm to another. Therefore, it is better if they have a large car that can pull a trailer. However, this measure will discourage farmers from buying large cars.

This measure seems to have been introduced out of spite. The SIMI has a lobby who wanted VRT reduced to increase the number of jobs created in industry. The Government rejected that proposal because it wanted to collect £45 million in revenue to cover something else and it decided to introduce this convenience measure, but it will rebound on it. As Deputy Deenihan said, the industry has responded very positively to the reduction in VRT during the past four years. I would like the Taoiseach, when replying, to state what research has been carried out in respect of large cars. Will Ministers stop travelling in large cars? I saw the Minister, Deputy O'Donoghue, on a television programme the other night talking about the new measures that will be imposed in respect of drivers. He said that if they do not obey the rules they will be caught. I have often been overtaken on the main road south by the Minister's car. Will the Minister lead by example and ask his driver this weekend to travel at the authorised speed limit?

Mr. Ferris:

He will have to keep up with Jackie.

Mr. O'Donoghue:

That will be no problem.

Mr. D. Carey:

The Minister will not do that. Ministers can ignore the law. When my party was in office I saw Ministers for Justice who are Members of the Fianna Fáil Party drive at high speeds.

Mr. Molloy:

Driving down the bus lane. The is what the Deputy's crowd is doing.

Mr. D. Carey:

Yes. Driving in any lane, as the Minister of State's crowd is doing. The Minister of State has put bad thoughts in my mind and they will involve my tabling questions to his Department. Thank God for the Freedom of Information Act. I will be able to get more fun out of the Minister of State. I wanted to say much more about this matter.

Mr. D. Ahern:

The Deputy could have fooled us.

Mr. D. Carey:

I want the Taoiseach to tell Members why he is targeting large cars. Is there a constructive reason for doing that or is this tax being imposed for some frivolous reason because agreement could not be reached at the last Cabinet meeting and it was decided to pick up £45 million by imposing this tax? I cannot see any other reason for imposing it. Is this measure an attack on the SIMI because its lobby has increased or is it being imposed because it did not pay the Government last year? Did the SIMI not divy up? Imposing this tax is petty and wrong.

Mr. Finucane:

May I make a contribution?

An Leas-Cheann Comhairle:

There is a time limit on the debate on these resolutions and fewer than four minutes remain.

Mr. Finucane:

My name was on the list.

An Leas-Cheann Comhairle:

I received this list by the Ceann Comhairle.

Mr. Finucane:

I asked at an early stage if I could contribute to the debate on this resolution.

An Leas-Cheann Comhairle:

Yes, but the Deputy's name was not reached on the list.

Mr. Barrett:

There is no provision to call the Taoiseach now.

An Leas-Cheann Comhairle:

Deputy Callely is next on the list.

Mr. Finucane:

I do not mind if Deputy Callely speaks next. Why can the Taoiseach not speak later tonight?

An Leas-Cheann Comhairle:

A time limit was agreed by the House. It was agreed that the debate on this resolution would conclude after one hour.

Mr. Barrett:

We have co-operated on time limits for these types of motions, but we will not co-operate in that regard in future because it is very unfair that Deputy Finucane cannot contribute to this debate.

An Leas-Cheann Comhairle:

Deputy Barrett, there was an agreement that there would be a one hour debate on these resolutions. That was put and agreed by the House.

Mr. Barrett:

It is wrong that Deputy Finucane cannot have a minute to make his contribution.

An Leas-Cheann Comhairle:

A number of Deputies' names are on the list. Deputy Callely is next on the list.

Mr. Finucane:

He is only after walking into the Chamber.

Mr. Callely:

I was here earlier.

Mr. Barrett:

Deputy Callely only came into the Chamber five minutes ago, but Deputy Finucane has been present since the debate on these resolutions commenced.

An Leas-Cheann Comhairle:

I do not want to have an argument about the manner in which this debate was managed. I am obliged in the Chair to call a Member on one side of the House and then call a Member from the other side of the House. When I came into the House the Ceann Comhairle had a list including two Opposition Members. I called the two Opposition Members and then I called Deputy Ardagh. I will not have a dispute about the way the Chair managed this debate. This is the last resolution.

(Interruptions.)

Mr. Finucane:

I do not want to have to respond to the Minister, Deputy O'Dea's hypocrisy. I know people in Limerick who are also known to the Minister of State. Will he take time out of his busy schedule——

An Leas-Cheann Comhairle:

Deputy Finucane, please allow the Taoiseach to reply to this debate.

(Interruptions.)

Mr. D. Ahern:

The Opposition has nothing left to say because this is a good budget and it knows that.

The Taoiseach:

A total of 140,000 cars will have been sold by the end of this year. There may be further car sales because this measure will take effect from 31 December. There has been a total of 40,000 second hand car sales. In 1993 only 64,000 new cars were sold. That shows there has been an enormous growth in car sales. A total of 57 per cent of new car registrations are in the zero to 1400cc band. Practically 60 per cent of cars are still within that range. A total of 39 per cent of new car registrations are in the 1400cc to 2000cc band and only 4 per cent are over 2000cc. I do not see that there is any great difficulties with regard to this measure.

Deputy Sargent said that all EU states must have a minimum EU tax rate for auto LPG. It will be 9p per litre cheaper here after the budget. The restructuring of VRT will not solve environmental problems and I did not say it would, especially as it can only have a real impact on future purchases of new and imported used vehicles, but it has an important role to play in influencing the type of vehicle purchased at the key choice stage. Restructuring can only be effective as part of a balanced environmental package combining green taxes and other elements such as traffic related measures. Other elements in this package include the provision of tax incentives for the construction of park and ride facilities, the exclusion of certain employee travel passes from benefit in kind provisions and the excise reduction on LPG, which will encourage greater use of environmentally clean products. I did not get a chance to make any points on the last two resolutions because the time was talked out.

Mr. Finucane:

The Minister for Agriculture and Food, Deputy Walsh, used it all up.

The Taoiseach:

A few years ago, when the parties that are now in Government were in Opposition, they did not oppose the imposition of taxes on cigarettes. That has not been done in this House for a number of years. The effect of this upon the Consumer Price Index was quite large. In addition, from the tax related figures one can see there has been a huge increase over the CPI increases. That matter must be taken into account.

Mr. Ferris:

Would the Taoiseach consider abolishing VRT on second-hand cars that are being exported?

An Leas-Cheann Comhairle:

I am sorry Deputy Ferris, but I am obliged to put the question at 11.10 p.m. in accordance with an order of the House today.

Financial Resolution No. 3 agreed to.

Question put: "That Financial Resolution No. 4 be agreed to."

The Dáil divided: Tá, 78; Níl, 69.

Tá

• Ahern, Bertie.
• Davern, Noel.
• Ahern, Dermot.
• Dempsey, Noel.
• Ahern, Michael.
• Dennehy, John.
• Ahern, Noel.
• Doherty, Seán.
• Ardagh, Seán.
• Ellis, John.
• Aylward, Liam.
• Fahey, Frank.
• Blaney, Harry.
• Fleming, Seán.
• Brady, Johnny.
• Flood, Chris.
• Brady, Martin.
• Foley, Denis.
• Brennan, Matt.
• Fox, Mildred.
• Brennan, Séamus.
• Gildea, Thomas.
• Briscoe, Ben.
• Hanafin, Mary.
• Browne, John (Wexford).
• Harney, Mary.
• Byrne, Hugh.
• Haughey, Seán.
• Callely, Ivor.
• Healy-Rae, Jackie.
• Carey, Pat.
• Jacob, Joe.
• Collins, Michael.
• Keaveney, Cecilia.
• Cooper-Flynn, Beverley.
• Kelleher, Billy.
• Coughlan, Mary.
• Kenneally, Brendan.
• Kirk, Seáamus.
• Cowen, Brian.
• Kitt, Michael.
• Cullen, Martin.
• Kitt, Tom.
• Daly, Brendan.
• Lawlor, Liam.
• O'Hanlon, Rory.
• Lenihan, Brian.
• O'Keeffe, Batt.
• Lenihan, Conor.
• O'Keeffe, Ned.
• McDaid, James.
• O'Kennedy, Michael.
• McGennis, Marian.
• O'Rourke, Mary.
• McGuinness, John.
• Power, Seán.
• Martin, Micheál.
• Roche, Dick.
• Moffatt, Thomas.
• Ryan, Eoin.
• Molloy, Robert.
• Smith, Brendan.
• Moloney, John.
• Smith, Michael.
• Moynihan, Donal.
• Treacy, Noel.
• Moynihan, Michael.
• Wade, Eddie.
• Ó Cuív, Éamon.
• Wallace, Dan.
• O'Dea, Willie.
• Wallace, Mary.
• O'Donnell, Liz.
• Walsh, Joe.
• O'Donoghue, John.
• Woods, Michael.
• O'Flynn, Noel.
• Wright, G. V.

Níl

• Allen, Bernard.
• Hogan, Philip.
• Barnes, Monica.
• Howlin, Brendan.
• Barrett, Seán.
• Kenny, Enda.
• Bell, Michael.
• McCormack, Pádraic.
• Belton, Louis.
• McDowell, Derek.
• Boylan, Andrew.
• McGahon, Brendan.
• Bradford, Paul.
• McGinley, Dinny.
• Broughan, Thomas.
• McGrath, Paul.
• Browne, John (Carlow-Kilkenny).
• McManus, Liz.
• Bruton, John.
• Mitchell, Gay.
• Bruton, Richard.
• Mitchell, Jim.
• Burke, Liam.
• Mitchell, Olivia.
• Burke, Ulick.
• Moynihan-Cronin, Breeda.
• Carey, Donal.
• Naughten, Denis.
• Clune, Deirdre.
• Neville, Dan.
• Connaughton, Paul.
• O'Keeffe, Jim.
• Cosgrave, Michael.
• O'Shea, Brian.
• Coveney, Simon.
• O'Sullivan, Jan.
• Crawford, Seymour.
• Owen, Nora.
• Creed, Michael.
• Penrose, William.
• Currie, Austin.
• Perry, John.
• Quinn, Ruairí.
• De Rossa, Proinsias.
• Rabbitte, Pat.
• Deasy, Austin.
• Reynolds, Gerard.
• Deenihan, Jimmy.
• Ring, Michael.
• Durkan, Bernard.
• Ryan, Seán.
• Enright, Thomas.
• Shatter, Alan.
• Ferris, Michael.
• Sheehan, Patrick.
• Finucane, Michael.
• Shortall, Róisín.
• Fitzgerald, Frances.
• Stagg, Emmet.
• Flanagan, Charles.
• Stanton, David.
• Hayes, Brian.
• Timmins, Billy.
• Higgins, Jim.
• Upton, Pat.
• Higgins, Joe.
• Wall, Jack.
• Higgins, Michael.
• Yates, Ivan.

Tellers: Tá, Deputies S. Brennan and Power; Níl, Deputies Barrett and Stagg.

Question declared carried.