Dáil Éireann debate -
Thursday, 8 Mar 2001

Vol. 532 No. 3

Order of Business. - Financial Resolution – Excise Duties on Mechanically Propelled Vehicles: Motion.

Minister for the Environment and Local Government (Mr. Dempsey):

I move:

"(1)THAT in this Resolution ‘the Act of 1952' means the Finance (Excise Duties) (Vehicles) Act, 1952 (No. 24 of 1952) and ‘the Act of 1992' means the Finance (No. 2) Act, 1992 (No. 28 of 1992).

(2)That the Act of 1952 shall, as respects licences under section 1 of that Act taken out for periods beginning on or after the 1st day of April, 2001 be amended in subsection (4) of that section 1 by the addition of the following paragraph after paragraph (f2>f):

‘(g)vehicles which are used exclusively for mountain and cave rescue purposes.'.

(3)That the Act of 1952 shall, as respects licences under section 1 of that Act taken out for periods beginning on or after the 1st day of April, 2001 be amended in Part 1 of the Schedule thereto:

(a)by the substitution of the following for paragraph 1:

‘1.Vehicles of the following descriptions not exceeding 500 kilograms in weight unladen:

(a)bicycles (other than bicycles which are electrically propelled), or tricycles (other than tricycles neither constructed nor adapted for use nor used for the carriage of a passenger), of which the cylinder capacity of the engine–

(i)does not exceed 75 cubic centimetres £25

(ii)exceeds 75 cubic centimetres but does not exceed 200 cubic centimetres£35

(iii)exceeds 200 cubic centimetres£45

(b)bicycles or tricycles which are electrically propelled£22

(c)vehicles with three or more wheels neither constructed nor adapted for use nor used for the carriage of a driver or passenger£45',

(b)by the substitution in paragraph 2 of ‘£52' for ‘£49' in each place where it occurs other than in subparagraph (c),

(c)by the substitution of ‘£170' for ‘£49' in subparagraph (c) of paragraph 2,

(d)by the substitution of ‘£451' for ‘£425' in subparagraph (b) of paragraph 2,

(e)by the substitution of the following paragraph for paragraph 4:

‘4.Vehicles of the following descriptions:

(a)vehicles designed, constructed and used for the purpose of trench dig ging or any kind of excavating or shovelling work which–

(i)are used on public roads only for that purpose or the purpose of proceeding to and from the place where they are to be used for that purpose, and

(ii)when so proceeding neither carry nor haul any load other than such as is necessary for their propulsion or equipment£5

(b)tractors (being tractors designed and con-structed primarily for use otherwise than on roads and incapable by reason of their construction of exceeding a speed of 50 kilometres per hour on a level road under their own power) and agricultural engines, not being tractors or engines used for hauling on roads any objects except their own necessary gear, threshing appliances, farming implements or supplies of fuel or water required for the purposes of the vehicles or agricultural purposes£52

(c)tractors (being tractors designed and constructed primarily for use otherwise than on roads and incapable by reason of their construction of exceeding a speed of 50 kilometres per hour on a level road under their own power and not being tractors in respect of which a duty is chargeable at the rate specified in subparagraph (b) of this paragraph) which are used for haulage in connection with agriculture and for no other purpose£52

Where a tractor is fitted with a detachable platform, container or implement (being a platform, container or implement used primarily for farm work), goods or burden of any other description conveyed on or in the platform, container or implement shall be regarded for the purposes of this subparagraph as being hauled by the tractor,

(d)tractors of any other description£170

(e)motor caravans, being vehicles which are shown to the satisfaction of the Revenue Commissioners to be designed, constructed or adapted to provide temporary living accommodation which has an interior height of not less than 1.8 metres when measured in such manner as may be approved by the Revenue Commissioners and, in respect of which vehicles, such design, construction or adaptation incorporates the following permanently fitted equipment–

(i)a sink unit,

(ii)cooking equipment of not less than a hob with 2 rings or such other cooking equipment as may be prescribed, and

(iii)any other equipment or fittings as may be prescribed£52

(f)vehicles which are kept and used exclusively on an offshore island to which there is no direct road or bridge access from the main-land£52.',

(f)by the substitution of the following paragraph for paragraph 5:

‘5. Vehicles (including tricycles weighing more than 500 kilograms unladen) constructed or adapted for use and used for the conveyance of goods or burden of any other description in the course of trade or business (including agriculture and the performance by a local or public authority of its functions) and vehicles constructed or adapted for use and used for the conveyance of a machine, workshop, contrivance or implement by or in which goods being conveyed by such vehicles are processed or manufactured while the vehicles are in motion:

(a)being vehicles which are electrically propelled and which do not exceed 1,500 kilograms in weight unladen£54

(b)being vehicles which are not such electrically propelled vehicles as aforesaid and which have a weight unladen–

(i)not exceeding 3,000 kilograms£170

(ii)exceeding 3,000 kilograms but not exceeding 4,000 kilograms£215

(iii)exceeding 4,000 kilograms but not exceeding 5,000 kilograms£277

(iv)exceeding 5,000 kilograms but not exceeding 6,000 kilograms£384

(v)exceeding 6,000 kilograms but not exceeding 7,000 kilograms£519

(vi)exceeding 7,000 kilograms but not exceeding 8,000 kilograms£653

(vii)exceeding 8,000 kilograms but not exceeding 20,000 kilograms £653 plus £154 for each 1,000 kilograms or part thereof in excess of 8,000 kilograms

(viii)exceeding 20,000 kilograms ............. £2,644',

(g)by the substitution of ‘£52' for ‘£49' in subparagraph (f2>a) of paragraph 6, and

(h)by the substitution of the following subparagraph for subparagraph (d) of paragraph 6:

(d)other vehicles to which this paragraph applies and which have an engine capacity–

‘(i)not exceeding 1,000 cubic centimetres£102

(ii)exceeding 1,000 cubic centimetres but not exceeding 1,100 cubic centimetres£152

(iii)exceeding 1,100 cubic centimetres but not exceeding 1,200 cubic centimetres£168

(iv)exceeding 1,200 cubic centimetres but not exceeding 1,300 cubic centimetres£182

(v)exceeding 1,300 cubic centimetres but not exceeding 1,400 cubic centimetres£196

(vi)exceeding 1,400 cubic centimetres but not exceeding 1,500 cubic centimetres£210

(vii)exceeding 1,500 cubic centimetres but not exceeding 1,600 cubic centimetres£262

(viii)exceeding 1,600 cubic centimetres but not exceeding 1,700 cubic centimetres£278

(ix)exceeding 1,700 cubic centimetres but not exceeding 1,800 cubic centimetres£325

(x)exceeding 1,800 cubic centimetres but not exceeding 1,900 cubic centimetres£343

(xi)exceeding 1,900 cubic centimetres but not exceeding 2,000 cubic centimetres£361

(xii)exceeding 2,000 cubic centimetres but not exceeding 2,100 cubic centimetres£462

(xiii)exceeding 2,100 cubic centi-metres but not exceeding 2,200 cubic centimetres£484

(xiv)exceeding 2,200 cubic centimetres but not exceeding 2,300 cubic centimetres£506

(xv)exceeding 2,300 cubic centimetres but not exceeding 2,400 cubic centimetres£527

(xvi)exceeding 2,400 cubic centimetres but not exceeding 2,500 cubic centimetres£550

(xvii)exceeding 2,500 cubic centimetres but not exceeding 2,600 cubic centimetres£644

(xviii)exceeding 2,600 cubic centimetres but not exceeding 2,700 cubic centimetres£669

(xix)exceeding 2,700 cubic centimetres but not exceeding 2,800 cubic centimetres£693

(xx)exceeding 2,800 cubic centimetres but not exceeding 2,900 cubic centimetres£718

(xxi)exceeding 2,900 cubic centimetres but not exceeding 3,000 cubic centimetres£743

(xxii)exceeding 3,000 cubic centimetres£900

(xxiii)electrically propelled£98'.

(4)That the Act of 1952 shall, as respects licences under section 1 of that Act taken out for periods beginning on or after the 1st day of April, 2001, be amended in Part II of the Schedule thereto–

(a)by the substitution of ‘£13' for ‘£12' in paragraph 5(a)(i), and

(b)by the substitution of ‘£29' for ‘£27' in paragraph 5(a)(ii).

(5) That the Act of 1992 shall as respects licences under section 21(3) of that Act taken out for periods beginning on or after the 1st day of April, 2001, be amended–

(a)by the substitution of ‘£30' for ‘£27' in paragraph (a)(i),

(b)by the substitution of ‘£180' for ‘£160' in paragraph (a)(ii),

(c)by the substitution of ‘£20' for ‘£17' in paragraph (b)(i), and

(d)by the substitution of ‘£44' for ‘£39' in paragraph (b)(ii).

(6)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)."

I thank the Opposition Whips for facilitating this debate this afternoon, as it necessary to move these resolutions to enable us to provide necessary notification before 1 April.

I also take this opportunity to apologise, as I said I would, to Deputy Howlin. I accused him last night of telling a lie in the House. He kindly checked the Dáil record for me and it transpires that I misheard the Deputy. I unreservedly withdraw the remark, and I apologise to Deputy Howlin.

This resolution provides for amendment of the Finance (Excise Duties) (Vehicles) Act, 1952, and the Finance (No. 2) Act, 1992, in relation to rates of motor tax and fees for trade licence plates. The House will be aware that at the end of last year press notice was given of the intention to change motor tax rates from the 1 April 2001. Not all motor tax rates are being increased, but where increases are proposed, smaller increases are to be applied to smaller cars which generally use less fuel and give rise to lower carbon dioxide emissions.

Motor taxation is paid directly into the local government fund. This fund, which was established under the Local Government Act, 1998, is provided in law for the specific purpose of local government and cannot be used by the Exchequer for other purposes. The fund is financed from the proceeds of motor taxation which is supplemented by an Exchequer contribution. The fund is used to finance non-national roads and the general purpose needs of local authorities.

The general purpose grants which are made from the fund to local authorities replace the old rate support grants. They are discretionary and may be used by authorities for whatever purpose they consider necessary, but are generally used to supplement other local income sources such as commercial rates and charges to finance their day to day operations. These operations cover a wide range of programmes for which local authorities have responsibility such as housing, roads, water and sewerage, planning, the natural environment, recreation and amenities and community development.

Local authorities face significantly increased costs in the delivery of these programmes for 2001 and must accordingly be adequately resourced to fund these increased costs if they are to meet the demands. In addition, local authorities are charged with delivering on large elements of the national development plan which is vital for social and economic development. It is imperative, therefore, that they have sufficient financial resources available to deliver this work. Local authorities' responsibilities do not end there, as the delivery of significant capital projects under the national development plan will have considerable implications for authorities in terms of operation and maintenance costs. Additional resources which arise from changes in motor tax rates will help local authorities to meet their commitments and to provide more and better quality services to the community.

New rates will apply to tax discs and trade licences taken out for periods beginning on or after 1 April 2001. As regards private cars, three different rates of increase are proposed depending on engine size. There will be a 4% increase for cars up to 1100cc, which represents an annual rate increase of £4 to £6, a 5% increase from 1101cc to 1500cc, which means annual increases of between £8 and £10, and a 6% increase for cars of 1501cc and over. These increases will range from £15 at the lower end of this bracket to £51 for cars over 3001cc. Almost two thirds of all cars are under 1500cc and will be subject to annual increases of between £4 and £10 – between about 8p and 19p a week.

A flat 6% increase is proposed for goods vehicles. At the minimum goods vehicle rate, which incidentally is paid by over four-fifths of commercial vehicle owners, this represents an annual increase of £10, or less than 20p per week. A revision of motorcycle tax rates is proposed to reflect the different engine sizes of these vehicles. The single rate of £22 is being replaced by the three tax bands, which existed prior to 1992. The new rates proposed vary between £25 for motorcycles under 75cc to £45 for motorcycles over 200cc.

There is also a tax class that includes vehicles constructed only for the conveyance of a built-in machine or workshop and includes recovery vehicles. Outside of recovery vehicles which collect disabled vehicles, this class includes cranes, well-boring machines and fish and chip vans. These vehicles, like goods vehicles, are designed and constructed for the carriage of various items in the course of trade or profession. It is proposed to bring these vehicles into line with the goods vehicle class and to increase their rate to the new goods vehicle minimum of £170.

As with goods vehicles, a 6% increase is proposed for agricultural tractors. It is proposed to align non-agricultural or general haulage tractors with the minimum goods vehicle rate. Average increases of 12% are proposed for trade licences, or trade plates as they are known. These are the green registration plates used by motor traders on vehicles, which are temporarily in their possession, in lieu of taxing such vehicles. While there are strict restrictions on the use of the plates, they are transferable between vehicles.

It is proposed to introduce two new motor tax classes. The first of these is to be a class covering all vehicles, irrespective of whether they are private vehicles or goods vehicles, which are used exclusively on an offshore island to which there is no direct road or bridge access from the mainland. A reduced rate of just £52 per annum is proposed for this class. This reduction is in recognition of the limited use of such vehicles and that some owners require a vehicle both on an island and on the mainland. The reduced rate will not apply to vehicles on islands such as Achill or Valentia which are connected to the mainland.

The second new tax class comprises all vehicles which are used exclusively for mountain and cave rescue purposes. It is proposed to exempt this class of vehicle from motor tax altogether. Vehicles used exclusively for transporting lifeboats, ambulances, fire brigade vehicles and State owned vehicles are already exempt from motor tax. Exempting this new class of vehicle for motor tax purposes completes a motor tax exemption for all emergency vehicles.

One of the primary reasons for rebalancing motor tax rates is to reflect their impact on the environment. As a greening measure, no increases are proposed for public service vehicles such as buses, taxis and hackneys. Youth and community buses, school buses and electric vehicles are also being exempted.

While not covered by the resolution, it is also relevant to report to the House on other measures proposed for introduction in tandem with the introduction of new motor tax rates. As a measure to assist people who may face difficulty in taxing their cars on a full year basis, regulations are being introduced to provide for a reduction in the surcharge which applies to vehicles which are taxed half yearly or quarterly. It is proposed that these regulations will come into effect from 1 April 2001.

This financial resolution will cease on the enactment of the relevant Motor Vehicle (Duties and Licences) Bill, 2001, which has been approved by the Government and will be presented at the earliest possible date.

Ms O. Mitchell:

I wish to share my time with my colleague, Deputy Clune.

I have no objection to paying road taxes, and certainly no fundamental objection even to paying increased road taxes. Most people would accept that road users should make some direct contribution to the cost of maintaining roads over and above that paid by the general taxpayer. There are huge demands now being made on local authorities in all areas but specifically in the area of roads, in trying to maintain non-national roads, even to increase the road building programme, in the control of road openings and in bringing some sort of order into it. Even in road sweeping, road safety and all sorts of other areas, there are demands on local authorities. For that reason I am reluctant to oppose this measure. I certainly would prefer a tax on cars to a tax on the elderly or on their children for keeping their parents in nursing homes.

I am opposing this resolution because it is a fraud. Does the Minister see no irony in a Minister from a party which some years ago abolished motor tax altogether coming in now with proposals to increase it? Does he see no irony in the fact that, when this measure was introduced some years ago to ring-fence this fund for local government, the Minister described it as a disgrace that local government should be funded by being pulled behind the family car?

My fundamental objection to this is the Minister's attempt to make a virtue of it as a green tax. It most certainly is not a green tax, and the Minister knows that very well. He knows it because he knows what a green tax is, given that he promised us one in the form of a tax on plastic bags – such taxes must be terribly difficult to produce because after two years we have not yet got it, but we have this tax after two months when it was announced surreptitiously as a sort of codicil to the budget This is not a green tax. It is a tax on ownership, not on usage. This tax is paid whether the car is in use or not. If it were a genuinely green tax it would discourage usage and we would all, as a result, drive less. On the contrary this is a fixed tax, and by increasing the opportunity cost of leaving our cars in the driveway, we encourage more use in order to try to spread the cost over additional miles. Not alone therefore is it not a green tax, it is quite the opposite. It is good old fashioned traditional rev enue raising, and the Minister should not try to dress it up as anything else.

In the Minister's press statement he said that policy in relation to motor tax does not form any part of taxation policy generally. Apparently this is because it is ring-fenced for local government. It is nonsense to say that. It is part of taxation policy. It is a revenue raising exercise. Otherwise why bother to increase it? It is certainly not out of environmental concern. The truth is that if this tax were not in existence, the Exchequer would have to fund local government directly, and the more this tax yields, the less pressure is on the Exchequer generally. Let us not pretend it is not a tax or a budgetary measure. It is.

It is not even a local tax, which might have some merit. If it were a local tax, spent where it is collected, my local authority would be extremely rich, but it is one of the poorest. The distribution of this tax, like every other aspect of local government, is entirely centrally controlled. It is distributed to the various local authorities according to some unknown formula, and it is certainly an unfair formula.

The Minister is either confused about this tax or he is deliberately adopting an entirely contradictory approach. On the one hand he is suggesting that it is a green tax aimed at reducing car usage – it will not, but that is the Minister's claim for it – and on the other hand, it is also being claimed as a tax which will increase funding to local authorities. It seems to me and to any logical person that there is something of a dichotomy in that position. The only logical conclusion one can draw from it is that the Minister's intention and his desire is to fund local government from a source of financing which he is also seeking to diminish. If the Minister really had any environmental concern and genuinely wanted to reduce carbon dioxide emissions, if he had any real desire for achieving more sustainable transport modes, he would be battering the door of his colleague, the Minister for Public Enterprise, Deputy O'Rourke, to get more buses onto the streets of Dublin.

The Minister with responsibility for housing expects the Dublin authorities to increase their output of houses to 20,000 or even 25,000 a year, depending on which figure one believes. However, this year not one single additional bus has been funded for Dublin Bus. If the Minister finds that amazing, he will be completely gobsmacked to hear the reason, which is that there is nowhere to garage additional buses. Can the Minister explain or defend that? Can the Cabinet sub-committee on the infrastructural deficit explain why there is such appalling lack of planning that we cannot have buses because we have no garage? How can the public have any confidence in the Minister?

I was present in Malahide when the Minister launched the strategic planning guidelines and promised that the additional houses would be accompanied by additional transport. Since then the Minister has not said a word about additional transport. All of those new households now have one option and one option only, that is to travel by motor car, with all the economic, social and environmental consequences that entails.

The Minister sought to fast track the planning process and increase the output of houses. He even introduced charges to deter the public from objecting to new developments. However, he did nothing to remove the single biggest cause of objections to new housing, which is the public fear that there will be increases in the level of congestion, and the public have every reason to fear it. It is an inevitable consequence of the failure to provide any public transport to match the increase in population and housing. As Minister with responsibility for housing and for the environment, the Minister has a responsibility to promote sustainable transport modes, and this measure goes nowhere towards achieving that. I reject this resolution as a fraud and as a deception of the public.

Ms Clune:

I want to comment on the method by which this proposed tax is introduced. It was announced in the budget on 6 December last. The Minister for the Environment and Local Government tells us that this motor tax is not a budgetary issue, not part of taxation policy generally. This kind of rhetoric rings hollow with motorists and those who have to pay this so called tax while being told that it is not a tax. Was the Minister trying to hide this tax by announcing it in the shadow of the budget, in the dark of night? Why did the Minister announce this measure, slipping it in when all the papers were put to bed and the Automobile Association and other bodies who comment on motoring issues and represent car owners had reacted positively to the budget?

This has been described as a green tax in an effort to try to fool people and make them believe it is benefiting the environment in some way. This measure is purely a means of collecting funds for the Exchequer and it is misleading to contend that it is a green taxation measure under which different rates of tax will be applied depending on engine capacity.

A car manufactured today can be up to 20 times cleaner in terms of emissions than a car manufactured 10 year ago. This is not reflected in this measure. Over the past 15 years the development of electronic injection systems, catalytic converters, multi-valve engines, exhaust gas accumulations and other new technologies have contributed to the manufacture of low emission passenger cars and light duty vehicle engines. These developments have led to significant improvements in air quality in other European countries, while continuing developments will further enhance air quality.

Cars with these new technologies have a higher engine capacity. For example, a four litre diesel engine has lower emissions than a ten year old small car. However, this is not reflected in this measure which focuses on engine size and does nothing to support new more environmentally friendly technologies. This measure does not give any incentive to motorists to purchase a new environmentally friendly car. The Minister is trying to sell this as a green taxation measure but he is not very convincing, particularly when one considers the number of cars imported from outside the EU which have higher emission levels and are not as environmentally friendly as some of the cars manufactured within the EU. I ask the Minister to consider the introduction of a measure which reflects the fact that emissions from older cars imported from outside the EU are contributing to poor air quality and damaging the environment. As a result of European directives and regulatory standards, a car manufactured today has 95% fewer emissions than a car manufactured during the 1970s. Since 1993 a number of emission directives have come into force, while many more are due to follow. These directives, when finalised, will enhance previous enactments.

The money collected under this measure will go to the local government fund. Does the money collected each year go directly to the local government fund? We do not seem to see it and I would like to know where it goes. Under this measure approximately £400 million will be collected each year. This money could be used to solve the problems in regard to non-national roads. I have previously raised with the Minister the plight of corporation boroughs which have been hard done by. In my constituency the roads have been neglected. Some money has come on stream in the past year or two but it is slow and roads have deteriorated to an embarrassing level. The level of funding provided for roads in my local authority area does not reflect the number of road users.

I will be parochial and raise a local issue of concern to me. Will the Minister on his next visit to Cork city take note of the quay walls which are collapsing? The embankment and road behind it are collapsing and much of the area has been fenced off as it is dangerous and not suitable for use by pedestrians. In recent years Cork Corporation has repeatedly requested the Department for funding to deal with this problem but it has not been forthcoming. Will the Minister consider this area which is an important amenity not only for Cork city but for the entire county?

My colleague referred to public transport. One of our contributions to the environment should be to encourage greater use of public transport and to discourage people from using their cars. This measure means a further investment in motor vehicles and there will have to be a return on that. My objection to this tax is that it is being promoted as a green tax, which it is not. Rather it is purely a means of collecting more revenue for the Exchequer.

Mr. Gilmore:

Two promises won the 1977 election for Fianna Fáil – one was the promise to abolish road tax, while the other was the promise to abolish domestic rates. It is ironic that 24 years later a Fianna Fáil Minister for the Environment and Local Government is proposing an increase in the reintroduced motor tax for a fund which will replace the fund which domestic rates had provided prior to their abolition in 1977.

I will not quibble with the proposed increases as they are broadly in line with inflation. I cannot pretend that if those of us on this side of the House were on the opposite side we would be doing dramatically different in so far as the amount of road tax is concerned. However, the Minister is doing himself no service in trying to pretend that this is a form of green taxation. For example, it is ludicrous to think that because there will be £15 less in motor taxation on a taxi, hackney or public service vehicle that somebody will use it in preference to private transport or that because the amount of motor taxation on an 1100cc car is £4 or £5 less than it is on a 1600cc car that one will opt to buy a smaller vehicle for that reason alone.

The reason the Minister is describing this as a green tax is that he was highly embarrassed at the time of the budget. I recall the time when hauliers took to the roads in protest and demanded a reduction in excise duty and in the taxation on motor fuels and the Minister declared publicly that there should not be a reduction in excise duty or in the taxation on motor fuels. I supported him publicly at the time, and I have no doubt that he argued for that position in Government. It was, therefore, a considerable humiliation for him when the Minister for Finance in his Budget Statement reduced the excise duty on motor fuels. To take the bad look off it, in the dead of night he announced the green taxation – what would otherwise be the normal inflation related increases in motor taxation which all of us would be happy to go along with without much fuss.

My concern is not the amount of the tax but its use. That reflects the concern of the motorist. The motorist will not lose a great deal of sleep tonight because there are a few extra pounds on motor taxation. Motorists are becoming increasingly agitated as to whether they are getting value for money for the motor taxation paid. Motor taxation now goes into the local government fund. When one looks at the way that fund is distributed one finds serious discrimination against those areas of the country which have the highest concentration of payers and also the highest concentration of new payers of the tax through new registrations. The local government fund for 2000 was not distributed on a purely per capita basis.

However, I accept other factors come into play. If one looks at it on a per capita basis it is very revealing. The lowest amounts of money were allocated to South Dublin County Council, £54.75 per capita last year, Galway city, £76, Waterford city, £79, Dublin city, £80, all of which are local authorities around the perimeter of major urban centres and which have the highest concentration of car owners and payers of motor tax. On the other hand, given that County Leitrim, where I accept there are factors relating to length of roads, got £228.76, County Longford, £199.23, and County Roscommon, £172.98, an explanation must be given why the allocation per capita is three and four times the amount between one local authority and another.

The allocation of this money is based on a per kilometre basis and no distinction is made between the kilometre of road which has a low usage in County Leitrim and the kilometre of road which has a high usage in the centre of an urban area. No allowance is made in urban areas for the provision of footpaths, more regular maintenance and cleaning of roads, public lighting and heavy traffic and that they are regularly dug up by utilities such as gas, electricity, Eircom and so on. There is a mismatch between those areas. The increases in the allocation in 2000 over 1999, based on a needs and resources study commissioned by the Department of the Environment and Local Government and carried out by Galway County Council, are close to inflation in the case of the large urban authorities. In Dublin city the increase was 7%, in South Dublin County Council it was 8%; in Dún Laoghaire-Rathdown County Council it was 8% but in Fingal County Council it was reduced by 7%. In Longford the increase was 22%, in Sligo it was 29%, in Laois it was 20%, in Kerry it was 20% and there are other examples.

There is a need to look at the way the local government fund is distributed. That look has commenced through the commissioning of the needs and resources study by the Department of the Environment and Local Government. A review group comprised of professionals from a number of local authorities is looking at it. Following a request from me, the Minister agreed that he and his officials would come to a meeting of the Oireachtas Joint Committee on the Environment and Local Government to explain how the local government fund is allocated and to discuss some better way of allocating that fund. It is not acceptable that the local government fund is allocated, in relation to roads, purely on a kilometre basis and in relation to other services, purely on physical criteria, such as social needs. In developing areas an increasing number of persons pay motor tax which is forming the core of the local government fund. Certainly moneys are provided through capital funding for sewerage, water, roads and, in some cases, community services but no fund is provided for the continuing cost of maintaining and managing those services. No consideration is given to the social needs of those areas and they were not factored into the needs and resources study carried out by Galway County Council.

Motor taxation is an environmental tax and is a tax on motor ownership. It is used by the local government system primarily for environmental purposes. This is as it should be. The problem is that those who pay the tax are entitled to ques tion why the housing estates in which they live, where roads and footpaths have deteriorated dramatically in the past 20 or 30 years because of increased usage of motor cars, do not get a sufficient slice of the local government fund to maintain and manage those services. Why is it that social needs are not taken into account in the distribution of this fund? There is an urgent need to review the way in which the local government fund is allocated. While I accept the preparatory work would be undertaken by experts, professionals and so on, the review should not be conducted behind closed doors. The Minister for the Environment and Local Government should take whatever recommendations are made to him by the review group and bring them before the Oireachtas Joint Committee on the Environment and Local Government to be debated so that there is a democratic input into the way the local government fund, made up of money collected from motorists, is distributed with a view to making the best possible use of that money. This would ensure a better relationship between this tax on private motoring and the impact of private motoring on our roads and the general environment.

Mr. Gormley:

I move amendment No. 1:

In paragraph (3) (a) of the motion, to delete subparagraph (b) of the paragraph proposed to be substituted.

I shall speak about the amendments later. The Green Party is more than happy to support fiscal measures which encourage sustainability and the Government has often referred to such measures. The Minister for Finance in his first budget referred to a tax on benefit in kind for parking spaces in Dublin. He hinted that certain civil servants complained about this proposed measure. It was dropped and has not been heard of since. Likewise there has been much debate about eco-taxes and energy taxes but none has been imposed. I have raised the proposal for a tax on plastic bags on numerous occasions in the House.

However, we must understand the concept of the eco-tax. It is based on "the polluter pays" principle but it goes beyond that. Eco-taxes are also about encouraging people. Incentives are needed in conjunction with taxes. That is why the question of usage is important. If one does not create waste, one should not pay. In other words, a flat rate for waste charges is of no benefit. People will fill bins up because their attitude is, since they are paying for the service they might as well use it. However, if the charges were volume or weight-related, people would be encouraged to recycle, which is what is required.

People are also required to use their cars less. The financial resolution could be described as a green measure at a stretch but it would be better if people used their cars less. Deputy Clune referred to clean engine technology. COf7>2 emissions increase in tandem with the increase in the volume of cars. Carbon dioxide levels increase with the use of certain technologies, such as the lean burn engine, which has been effective in reducing certain pollutants. There is a problem in terms of their contribution to greenhouse gases. Technology does not resolve the problem. Better public transport and less car usage is required.

The problem with the Minister's proposals is that he will tax the electric bicycle. The electric bicycle is an extremely green proposition. It is a fantastic measure and it is the way of the future. I cannot understand why the Minister is introducing this proposal and that is the reason we have tabled amendments. We hope the other Opposition parties will support us. I use a regular bicycle but I used an electric bicycle for a week. It takes four hours to charge. For example, Deputy Gilmore could use one to travel to the House from Dún Laoghaire. It operates as an ordinary bicycle but if one is travelling up a hill one can switch over to electric power. It is attractive to the business sector for business men who do not want to arrive in work covered in perspiration and the bicycle is also ideal for commuters. Taxing it flies in the face of sustainability.

The Minister may refer to the definition in the Finance Act, 1992, but the Government needs to get its act together and delete it. Electric bicycles should not be covered by motor taxation. That is not the way of the future. We should not tax solar panels, electric bicycles and so on. That is why the Green Party objects to the resolution. People can argue that electricity is used if one charges the bicycle. However, Eirtricity is a new electricity company which derives energy from renewable resources such as wind. Soon people will be able to obtain electricity from the company and they will be able to charge their bicycles using wind energy. That is an exciting prospect and it is a way to reduce COf7>2 emissions properly. A Government with common sense would want to encourage more people to use such bicycles rather than cars.

The use of motor taxation revenue to fund local government is not a sustainable option in the long term. We need to return to using rates for this. Local authorities cannot depend on revenue from cars. As car numbers dwindle, there will be less revenue. In future we want fewer cars. Countries such as Holland, which have a high volume of cars but lower car usage, are in transition. Shortly, there will be less car ownership because driving a car is becoming less viable. If one travels to countries such as Holland at the weekends the motorways are clogged up. In the long term we must move away from using motor taxation revenue in this manner.

I hope the Minister will look to the future and take on board what the Green Party is saying. He may be able to persuade the mandarins in the Department of Finance who do not have even the greenest tinge and do not understand the concept of hypothecation and how important it is to use fiscal measures to encourage sustainability. I hope, for instance, the Minister will meet the committee on green taxation which is supposed to come up with recommendations. Nothing is happening. If the committee had examined this issue, I would have hoped it would have recognised the sense of what the Green Party proposes.

The Minister said the measure would come up again in three months. Perhaps he will have the opportunity to examine our comments. The manner in which the traffic problem and air pollution has worsened dramatically in recent times and car ownership has increased exponentially means we will have to examine such measures. PM 10s, which are volatile organic compounds, cause asthma and high incidences of cancer in our cities. There have been alarming levels of these pollutants in my constituency, including along Pearse Street. We must examine more sustainable methods of dealing with society's problems.

We must examine planning in the long term but that is for another day. I urge the Minister to consider the amendments. I hope the other Opposition parties will accept them because we must signal that taxing electric bicycles is not the way forward. I have spoken to officials in the Department of the Environment and Local Government and in the Revenue. There has been a suggestion that electric bicycles should be insured. That would be the wrong road to take. They will not cause accidents. They are ordinary bicycles which travel at approximately 11 miles per hour. It is the way of the future and I hope the Minister takes my comments on board.

Mr. Naughten:

I am delighted to have an opportunity to speak on the financial resolution for a number of reasons. I will highlight two issues, which the Minister has neglected. First, he announced that he will exempt mountain and cave rescue vehicles so that all emergency vehicles are exempt from motor tax but he did not refer to sub-aqua teams. The waterways in the midlands are extensive and there is a huge reliance on the services of sub-aqua teams. They provide an excellent service with little funding. Many are voluntary, including Athlone and Rosommon sub-aqua teams. The vast majority of suicides result from drowning. The sub-aqua team is the first organisation to be contacted. In many cases it is not possible for the Garda sub-aqua team to be present at all searches because of the number of demands placed on it. The voluntary organisations, which are trained in search and rescue, are called in and can be mobilised at very short notice. For example, the River Shannon, one of the busiest waterways in Europe, has a number of voluntary sub-aqua organisations along it which can be called upon at very short notice if there is an accident or fatality. Sub-aqua clubs are unique voluntary organisations. Their vehicles are not full-time emergency vehicles, but they provide a very important service on a shoestring budget in many cases and I ask the Minister to exempt those vehicles from motor tax.

Electrical vehicles were mentioned by the Minister and Deputy Gormley. I wish to raise rape seed oil, a renewable fuel which should be promoted and encouraged. Farming is going through a difficult time and the country is subject to volatility in terms of oil markets. We have the potential to develop cash crops such as rape seed given our climate and I do not see why we should not be the leading country in developing this technology. Maxol has done much work in this area, but neither the financial resolutions in relation to excise duty which were tabled in the House on 6 December nor the resolution we are now discussing address this issue. I ask the Minister to look again at this as the only way we will encourage the development of these technologies and the use of rape seed oil is through incentivisation in terms of excise and motor tax.

The Minister said that "these operations cover a wide range of programmes for which local authorities have responsibility, such as housing, roads, water and sewerage, planning, the natural environment, recreation and amenities and community development". Deputy Gilmore highlighted the fact that the amount of funding for Roscommon is quite generous.

Mr. Gilmore:

And the roads are not great either.

Mr. Naughten:

I am just about to make that point. The roads are in a deplorable state. We have more kilometres of road per head of population than any other county and all the funding we get from this budget goes into the road infrastructure. There is nothing left for the other elements mentioned by the Minister. We can only avail of direct grants from the Department of the Environment and Local Government. There is no point talking about giving additional powers to local authorities unless we have the money to make the decisions required. Every time I raise issues like this with the Minister through parliamentary questions I am told about the discretionary fund we receive, which is a pittance. Once it is divided between the six electoral areas in my county it amounts to very little. We cannot tackle housing, water and sewerage or ensure proper investment in our roads as we do not have the resources to employ the staff, get the equipment or carry out work.

I hope the Minister will respond to some of the issues I have raised.

Minister for the Environment and Local Government (Mr. Dempsey):

I thank the Deputies for their contributions. As I said at the outset, we will have an opportunity to tease out some more of the issues in greater detail when the Bill comes before the House.

Deputy Naughten raised the issues of renewable fuels and sub-aqua clubs. There is a list of exempted vehicles and sub-aqua club vehicles might possibly come under it. Many sub-aqua club activities do not relate to emergencies but are recreational and social. However, the issue merits consideration between now and the intro duction of the Bill, and perhaps the Deputy will get somebody to make a formal submission or make a submission himself and we will examine it. Sub-aqua clubs do very valuable work, no more than the Civil Defence with which I was associated for many years, and they deserve some recognition.

I wish to deal with the amendments tabled by Deputy Gormley which I do not propose to accept for a few reasons. I have no argument with the case made by him that these are much more environmentally friendly, etc., but motor tax applies to all mechanically propelled vehicles, irrespective of how the vehicle is propelled. Since motor tax is now an important part of the local government fund and is distributed to local authorities to finance their activities, I am not in favour of exempting any kind of mechanically propelled vehicle. Also, the Deputy may have said that I was introducing a tax. In fact, all electrically propelled vehicles are currently liable to motor tax. Therefore, I am not proposing the introduction of a new tax. I have no difficulty with the principle of keeping motor tax on environmentally friendly vehicles to a minimum and that is reflected in the increases in motor tax.

People have said I referred to this as a green tax, but motor tax is not a green tax. I said that in relation to the changes I have made over the past number of years I am attempting to green the motor tax system a little more. My desire, and that of those who have spoken this afternoon, is to rebalance the motor tax system on that basis when we have the data on COf7>2 emissions from cars under EU directives – we do not manufacture cars and are somewhat dependent on EU directives.

Fine Gael and its former leader have accused me of issuing figures in the dead of night. Where I come from, 6.15 p.m. is not the dead of night – for me and most Deputies it is about half way through the day. I cannot help it if newspapers do not print the figures.

Deputy Gilmore made a number of valuable points. I am sure that if motor tax had a per capita basis, Deputy Gilmore would complain it was not a per kilometre basis.

Acting Chairman (Mr. McGinley):

As it is now 3.30 p.m. I am required to put the following question in accordance with an order of the Dáil of this day:

That the amendments set down to the Financial Resolution are hereby negatived and that the Financial Resolution is hereby agreed to.

Mr. Gormley:

On a point of order, is the Chair not required to put the amendment?

Acting Chairman:

The order of the Dáil states that one question is to be put if it is 3.30 p.m., as was agreed on the Order of Business this morning.

Mr. Gormley:

So the Chair is not taking the amendment?

Acting Chairman:

The amendment is taken in the question, which states that amendments set down to the Financial Resolution are hereby negatived and that the Financial Resolution is hereby agreed to, so the amendments are incorporated.

Question put and agreed to.