Dáil Éireann debate -
Wednesday, 5 Mar 2003

Vol. 562 No. 5

Motor Vehicle (Duties and Licences) Bill 2003: Second Stage.

Minister of State at the Department of the Environment and Local Government (Mr. Gallagher)

I move: "That the Bill be now read a Second Time."

The primary purpose of the Bill is to give legislative form to the increases in motor tax rates and trade plate licences, which were contained in the Financial Resolution on motor tax, passed by the Dáil on 12 December 2002. The Financial Resolution and this Bill provide for a standard 12% across the board increase on motor tax on all classes of vehicle. As the House will be aware, the increases in motor tax are already in place and apply to all motor tax taken out for periods after 1 January this year.

As well as increasing motor tax, the Bill also contains a small number of minor technical amendments to motor tax law designed to improve the administration of motor tax. The technical changes relate to extending the national vehicle records, which are held in my Department's vehicle registration unit in Shannon, to include vehicles prior to first taxing or vehicles never taxed.

It is also proposed to provide that, as well as local authorities, the Minister for the Environment and Local Government may be classed as a licensing authority for motor tax purposes. This will facilitate the introduction of a new system to allow the motoring public to pay their motor tax on-line later in the year. The final minor technical adjustment will simply remove an Irish punt amount from the law as it is now redundant and its euro equivalent is already in place.

The decision to increase motor tax rates was taken against a background of 33% inflation in the past ten years compared to a 12% rise in motor tax rates. In making the decision to increase motor tax rates, the primary consideration was the need to provide adequate funding for the non-national road programme. Unlike other taxes, motor tax is not paid into the Exchequer. It is paid directly into the local government fund. This fund, which was established under the Local Government Act 1998, is ring-fenced 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 and this is supplemented by an Exchequer contribution. The fund is used to finance non-national roads and the general purpose needs of local authorities.

As the Minister indicated during the debate on the Financial Resolution in December last, as a consequence of channelling motor tax receipts into the local government fund a link has been created between the amount of tax paid by motorists and the visible and concrete service they get for that tax in terms of better roads and better local government services.

The National Development Plan provides for investment of €2.43 billion in the non-national road network in the period from 2000 to 2006. Looking at the operation of the plan for its first two years, I am happy to inform the House that expenditure in both the regions is almost 13% ahead of that profiled for the period. The non-national roads measure is one of the best performing measures under both the south and east, and BMW regional operational programmes.

Last year, Fitzpatrick Associates, Economic Consultants, carried out an in-depth independent evaluation of investment in our road network. This covered both national and non-national roads. The evaluator's overall conclusion on the non-national road programme was positive and the evaluation confirmed this programme was being operated on a reasonable and efficient basis. The cost management of the programme was satisfactory and no major adjustments were recommended by the evaluator. The verdict for the first two years of the programme is good and the credit for this is mainly attributable to the local authorities, which carried out such excellent work throughout the period. I take this opportunity to commend all those involved in the programme.

Continuation of this good work by local authorities is dependent on having adequate resources at their disposal and therefore we are increasing the rates of motor tax and trade plate licences. For this year €434 million will be available for non-national roads. This compares to €435 in 2002, which was the highest ever State grant provision for non-national roads. Along with funding roads, adequate finance must be provided for local authorities to perform all their functions and to continue to provide good quality services to the public. If local government is to continue its good work, it needs extra resources and this is the reason for increasing motor tax rates.

As I mentioned at the outset, the new rates of motor tax set out in the Bill apply to tax discs and trade licences taken out for any period beginning on or after 1 January 2003. The new tax rates for all vehicles are set out in the Schedule to the Bill. While the increases were 12% on all vehicles, I would like to highlight for the House what this increase means in actual cash terms in relation to private cars and goods vehicles which make up over 90% of the national fleet. For private cars with the lowest engine size of under 1,000 cc, the annual rate increase is €15. For private cars in the 1,001 cc to 1,300 cc category, the annual increase is between €23 and €28. For private cars in the 1,301 cc to 1,400 cc range, the additional annual increase is €30.

Some 60% of the national car fleet is made up of cars that are less than 1,400 cc. Therefore the annual extra costs for most motorists will be between €15 and €30 – that is between 29 cent and 58 cent a week. Put another way, that is between 4.1 cent and 8.2 cent per day. For the remaining cars, the increases will range from €32 for cars above 1,400 cc up to €137 for cars over 3,001 cc. Less than 0.5% of cars in the country are in the 3,001 cc plus category.

For goods vehicles, the effect of the 12% increase will vary depending on the size of the vehicle. Some 80% of vehicles in this category are at the lowest level of charge, meaning that they will pay an annual increase of €26 or 50 cent per week. A 12% increase is also 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. The increase for a pair of trade plates will be €27.

This is a short Bill and its purpose is simple. It is to copper-fasten the increases in motor tax introduced by the financial resolution passed by Dáil Éireann last December. Clearly, increasing any tax is not a popular decision and is not one which is taken lightly. These increases are being introduced with good reason and for a particular purpose. The revenue generated by the motor tax increases will be used for funding local authorities. In particular, it will be used to fund the non-national road programme to ensure local authorities can consolidate and build on the great progress made in rehabilitating our non-national road network over recent years. I commend the Bill to the House.

Mr. Allen

This Bill implements the savage increases in motor tax rates and trade licences proposed in the budget in December. The introduction of a standard, across the board increase of 12% at a time when inflation is running at 5% and possibly 6% and car sales are plummeting is unacceptable. We need only look at an article in The Irish Times of 4 March which stated that new car sales fell significantly last month amid signs that the economic downtown was finally taking hold in the industry. Car registration figures for February were down by 18.8% on the same month last year and 5.5% for the year so far. The number of cars sold in the first two months of this year was 52,454 of which 19,624 were sold last month, a fall of 4,490 on February 2002. It is against this backdrop that these increases are being introduced.

Ireland is entering a recession, which will add another nail in the coffin of what is becoming an increasingly uncompetitive economy. In addition to the cuts implemented in 2002, this year to date has been a bleak one for those seeking improved public services and infrastructure. The cuts implemented last year, which will continue to affect the country, include 800 health jobs, €36 million in funding for schemes designed to tackle educational disadvantage, €12.5 million from the budgets of FÁS and the IDA and €40 million from the overseas development aid budget, which will affect the world's poorest people. It is important we highlight these figures as they amount to another stealth tax. Regardless of what the Government says, they are another way of screwing the public.

The House and the public will have to be reminded over and over again of the promises made by the Taoiseach and the Government prior to the general election and what has happened since. Within weeks of the election, during which the Taoiseach insisted the public finances were in good shape, he stated corrective measures would be necessary to dig the Government out of its economic hole.

I will remind the House of some of these measures. In education, a 10% cut in real terms was imposed on primary school budgets and other cuts in real terms were made to budgets at every level. Health spending increased by 5% at a time when health inflation rates were 10%. The drug refund and long-term illness schemes were reduced by 10% in real terms. To maintain current service levels, hospital managers were told budgets would have to rise by some €380 million, yet the actual increase was €26 million. The roads budget, to which the Minister of State referred, was cut by 4.5% in real terms. At a time when we should be developing our rail services, the development budget for rail was cut by 8.5%.

I do not need to remind the Minister of State that the first-time buyer's grant has been axed. In agriculture, the budget for Bord Bia was reduced by 13% while 44% was cut from agricultural development under the national development plan. Rural Ireland will also be affected by the 26% cut in the budget of the Department of Community, Rural and Gaeltacht Affairs, including a 68% cut in the western investment fund. In addition to a cut of 40% last year, the defence budget for this year was cut by 10%. None of these reductions takes into account the public pay element of increases in departmental budgets.

The increase of €200 million in the capital budget for 2003 will be wiped out by increased VAT costs for the construction industry. The Minister cut the budget for improved infrastructure in absolute and real terms. Alongside the cuts new charges were introduced. The failure to index tax bands in the budget effectively amounted to an increase of around €300 million in the tax burden of workers and will cost the average family an additional €400 per year. The cost of a visit to a casualty department has risen by 26% to €40. VHI charges increased by 18% in September 2002 following a rise of 9% in 2001. ESB bills have risen by more than 13% for domestic users, more than 8% for small businesses and more than 4% for industrial users. College registration fees have increased by 69% and free third level education has been effectively scrapped. It is also clear from the comments of teachers in recent days that the Government is preparing the way to abolish free fees.

The drugs payment scheme threshold was increased by €19 to €70. Local authorities have been forced to increase water and bin charges in an effort to avoid abolition. The Environmental Protection Bill currently passing through the Seanad will create chaos because it effectively removes powers from local councillors and gives them to managers who will now make up the shortfall in central funding by raising refuse charges to about €600 per year.

The television licence fee was increased by 40% to €150, bus fares in Dublin have risen by 9% and the increase in the lower rate of VAT will cost the average family about €182 per year. Motor tax is up 12% on 2002 while bank card charges have increased by 108%.

In two budget speeches the Minister for Finance, Deputy McCreevy, signalled the introduction of a carbon tax in the foreseeable future. The principle of passing on the environment in a better state than one receives it should be a key policy objective and should lie at the heart of sustainable development. By signing up to the Kyoto agreement, we will have to cap greenhouse gas emissions at 13% above 1990 levels. Current energy emissions exceed this target by 20%. Despite being in power for almost seven years, this Government has done little or nothing to advance that objective as the greenhouse gas intensity as a result of economic growth here has worsened since 1997.

The Government's transport policy has been a failure. Its waste strategy is in a shambles having achieved less than one-third of the target it set itself for growth in recycling. Illegal dumping is rampant and landfill sites are running out of capacity. While it was to be expected that the massive expansion of employment, house building and car ownership over the past decade would push up emissions, it is disappointing that emission levels per vehicle grew by 26% in the past six years.

Despite the long run-in period, the Government admits it has implemented less than one-fifth of the measures intended to achieve the Kyoto objectives. New Zealand was one of the most recent countries to introduce a carbon tax. Last October when it announced its plans for a carbon tax, the Government stated that although the measure would push up fuel costs it would help the country meet the target set for it under the Kyoto climate change agreement.

The tax being introduced there, at approximately €12 per tonne of carbon dioxide equivalent, will be levied some time after 2007 but only if the controversial Kyoto protocol comes into force internationally. It is estimated that petrol prices in New Zealand will increase by about 6%, diesel by about 12% and gas and electricity prices by 8% or 9%. The losers will be coal users who will see costs jump by about 19%. The New Zealand Government has said the unquantified amount of finance raised by the new tax would be offset by the reduction of other taxes.

The Minister of Finance stated that we are now facing the introduction of a carbon tax here because of our obligations under the Kyoto protocol. However, the world's biggest air polluter, the United States, has refused to ratify the protocol which it sees as flawed because it does not bind developing countries. The New Zealand Government has promised that the revenue raised from its proposals will not be used to improve the Government's fiscal position but will be recycled through the tax system into climate change projects.

It is significant that New Zealand is pressing ahead with its carbon tax proposals despite the fact that the United States and New Zealand's near neighbours, Australia, have rejected the climate agreement expressing fears that it would damage their economies. Incidentally, I was amused to discover that New Zealand intends to impose a tax on a wide range of activities, including on sheep and cattle because one of the biggest producers of greenhouse gas in New Zealand is the belching of cattle and sheep. Even they are not spared in terms of these greenhouse taxes.

The public here will greet the announcement of a carbon tax with a high degree of scepticism. They will be very suspicious that the Government is enthusiastically espousing the calls for a carbon tax at a time when it is increasing charges and imposing further taxes to compensate for its own mismanagement of the economy and the public finances. It is vital that carbon taxes are introduced for environmental reasons and not for crude financial reasons. If carbon taxes are to be introduced, they must be part of a well thought-out strategy to deliver real changes in tune with the behaviour of individuals and businesses rather than simply imposing a burden on the public to prop up the poor management of public expenditure we have seen in recent times.

Carbon tax is not the answer to everything. I am aware the Department of the Environment and Local Government estimates that it would raise approximately €510 million annually but would reduce greenhouse gases by about 1.4%.

Deputy Richard Bruton, the Fine Gael spokesman on finance, pointed out that because of existing structures of excise on fuels, a uniform carbon tax increases fuel prices in line with their environmental damage. In that respect for natural gas, for example, there will be twice the rate of price increase of motor fuels even though it is a much cleaner energy source. Small businesses would face a significant competitive disadvantage compared to large users of energy who will receive free of charge tradable emission rations instead of paying the tax. Irish businesses competing in the United States, however, will experience problems because of the Bush Administration's reckless attitude to the Kyoto agreement.

If carbon tax is being proposed, key guidelines must be set out by the Government in a Green Paper, as Deputy Bruton suggested, and time should be given for responses from key players in the Irish economy as well as the consumer. If the Government proposes to introduce carbon tax, the revenue gathered must be ring-fenced for promoting other energy saving or emission improving actions. It must be used for compensating low income households and ring-fenced for cutting other taxes. It cannot be used to prop up Government mismanagement and incompetence.

The rate of carbon tax should be set out at a level that does not put us at a significant disadvantage to that of other European countries, none of which has so far proposed a rate comparable to that advocated by the Department of the Environment and Local Government. The Government has failed to reform motor tax which should be graduated according to the emission performance of vehicles as in the United Kingdom. Has the Minister any ideas on the system in the UK? I would like to hear in his response whether it is examining the whole question of emission performance of vehicles.

The key to success in environmental policy is that the public must understand the rationale but have confidence also that the money taken from the system will be used to deliver a better environment for us all. The revenues gathered must be used to promote innovative behaviour-changing policies in the various sectors.

This Bill, in the absence of motor tax reform, is a crude measure to raise revenue to pay for the Government's mismanagement and incompetence, as well as for its election promises, most of which have not been implemented.

In the time remaining to me I want to make a number of suggestions. The greenhouse gas emissions from fossil fuels and transport here are of particular concern because a rise of 176% in emissions is predicted between 1990 and 2010 if there is no policy change in this area. The Government should encourage the use of biofuel as an alternative to diesel and petrol powered engines in an effort to reduce emissions and promote the biofuel industry. It should also remove excise on biofuels when used in transportation, a policy supported by more environmentally conscious European Union countries. If significant progress is to be made, a new tax regime must be created that positively discriminates in favour of renewable fuels.

Real potential exists for viable alternative use of farmland and existing crops. Agricultural set-aside land, for the most part in fallow, could be used to grow industrial products while seed-rape and sugar beet, two crops with biofuel potential, have been grown successfully here over recent years.

Has the Government examined European models in relation to taxation and biofuels? What are its ideas on those because all we are getting today is another stealth tax? There is no forward planning on the part of the Government. What incentives are available to local authorities to encourage them to use biofuels as an alternative to petrol and diesel? The local authority in my area is an EU grant aided participant in a programme with a written commitment to operate its fleet on biofuels. Incentives should be given to local authorities and public bodies to use alternatives to petrol and diesel.

This Bill is just one of a long litany of new charges being imposed on the public. The public have been screwed with new taxes, increased charges and cuts in services since the general election. Having been fed with promises prior to the election, they have been screwed since then and they will not forget the Government's deception and double-talk during the election campaign. I wish to share the remainder of my time with Deputy English.

Mr. English

Deputy Allen summed up what this Bill is all about – it is another tax, simple as that. The Minister of State said we are here because this was voted on by the Dáil on 12 December last but the Opposition was against this measure. The Government parties voted for the tax.

This Bill is in keeping with the theme of Fianna Fáil-Progressive Democrats policies. We seem to spend a great deal of time debating tax hikes, broken promises and cutbacks for which the Government received no mandate in the general election. This undermines the system of accountability in the House and erodes public confidence in our political institutions. Many new Deputies are concerned with the image of politics and the actions of the Government do not help. The image of politics is going down and the imposition of more taxes does not help. It would be different if people were warned a year or two ago that these taxes would be imposed. In Finland the Minister for Finance is very honest and warns people that times will be hard for a couple of years. People accept that and do not mind paying taxes. In Ireland we screw the people, keeping quiet until we hit them with taxes; no wonder they do not want to pay them.

As recent legislation proves, our Government colleagues have become arrogant. They care nothing for public confidence in our political structures and they dislike accountability. They would prefer if the first people knew about proposed legislative changes was when those were enacted or, in the case of taxes, when deductions are made from people's wages. That is why the debate this morning on the Finance Bill was cut short and why even this debate finishes at 7 p.m. The Government wants to keep things quiet and to keep discussions brief. That brings us to freedom of information, which is a principle we hold dear as the centre of democracy. We do not intend to give that up without a fight.

When will we stop asking motorists, the motor trade and taxpayers to write blank cheques for an unspecified amount of work on our national roads infrastructure? People are driving on the same roads that they were using five years ago but in some cases those roads are now worse. Road maintenance costs money and building new roads costs even more money but recent startling figures from the National Roads Authority shows that spending has grown beyond belief. Motorists wonder if they are paying for roads or making millionaires out of shareholders in civil engineering and construction companies. Are we being asked as motorists to pay our fair share of the maintenance costs or, through the Government's policies, are we fuelling the hyper-inflation in the construction field which is taking the blame for so many broken promises?

For example, a bypass was proposed for Ashbourne in Meath in 1996-97, when the best price was €80 million. The price is approximately €170 million today, five or six years later. What has gone wrong in the last five or six years? Is that why we are paying extra taxes?

Are the policies of the Government fuelling this hyper-inflation? If so, what does the Government propose to do? Taking inflation into account, are motorists being asked to fork out money for nothing new? Are we throwing our money down the drain? Perhaps the Government is doing that for us. There is not much pleasure in this situation and it has to change. It is time for accountability and for motorists to be given a fair deal. No reasonable person minds paying for what they use or get but what are we getting for this money? There is talk of people being able to see, in the Minister of State's words, visible and concrete service. However, people will be queuing for eye tests to see that service. The roads are in a desperate state all over the country but we are being told about a visible and concrete service: I do not believe in it.

The Minister of State told us the money for roads is ring-fenced by the local authority. That is like a person who loses money in a field; he knows the money is in the field but he does not know where and cannot find it. Motorists feel much the same and most sane people would not go back into a field to lose money again. However, present Government policies seem insane. There is certainly little logic to them: first spend money to buy an election and then say with a cheeky smile that sound management means people will have to be fleeced for a while to make up for the con pulled on them – trust us with your money as we know what we are doing.

Does the Government think we are all fools? Does it pay any heed to taxpayers' money or is it something the Government takes for granted? Is the Government so arrogant as to think that a slender majority gives it permission to demand taxpayers' money at will for whatever it wants, with no real accountability? Are the economics of the national stadium, "the Bertie bowl" at work here too? Are overtaxed motorists now being asked to fill the Taoiseach's holes, the holes left in the economy by years of mismanagement of our infrastructure? I am a motorist and I say "no". There will be no more money until we know exactly where it is going. What roads will the money be spent on? What distances will be covered and how many holes will be filled in?

What proportion of the funds is being spent on administration and legal fees, false claims settlements or consultant fees? I have a major problem with consultants lapping up money. We had a stretch of road in Meath for which €200,000 was allotted over several years to deal with footpaths and so on, but in the first year consultants accounted for approximately 25% of the cost. They get paid up front and swallow a large amount of the money, so people do not see the visible and concrete service to which the Minister of State referred. The money has gone into someone's pocket.

What percentage of our money is being spent on fancy signs which state that projects are funded by the national development plan or on television advertisements for NDP-funded projects? The national development plan is mostly funded by taxpayers' money: that is our money, money from motorists and others. We did not ask for TV advertisements to tell us where our money is going; we know we are paying the money but we did not ask for advertisements to tell us about it. More money should be spent on the roads to bring them up to European standards. The Government may not care much about this but it is a serious point.

It is not too much to ask what exactly our money is to be spent on. Next year we should be shown what it has been spent on – a real road in a real town. Motorists should be given a reason to believe in politicians and the power of the House. Accountability means results are measured – we should be able to come in here next year and say this much was spent on materials for roads and so on. We should be shown the percentage of funding spent on roads where it is needed.

I am sure my county's situation is mirrored all over the country. Our roads budget has been slashed and the people of Meath are saying: "We are being asked for a 12-13% increase in taxes yet we are getting less money to spend on our roads." That does not add up. It makes no sense to them that there has been a reduction of €16.3 million in overall road spending in Meath, although I understand the motorway in Drogheda accounts for some of that. There is a €290,000 drop in spending on national roads maintenance, though I know the Minister of State will say that much of what we are discussing relates to non-national roads. There was a drop of almost €2 million in funding for regional and county roads in a county where the roads are in a mess. The ordinary maintenance of regional roads is down by 13.6% and maintenance of county roads is down 21.3%. We had a debate on this last Monday at the council. How are we to tell people that though they are paying more taxes less money is being spent on roads? That does not add up and people are looking at us as if we have two heads. I could cite other figures. If the Minister of State could respond to this when he replies it would be great, as I could then go to people in Meath and explain to them why this situation looks like a "con". Maybe I am missing something.

It is a hobbyhorse of mine that the Government has a love affair with roads. We must start thinking of railways, as then we would not need these motor tax increases. We should try to get people off our roads, which are a mess not only due to the lack of funding but because there are so many cars using them. We should take freight off our roads. This Government spent millions repairing the railway between Kingscourt and Navan but as soon as the money was spent it closed the line because there was no freight for it. We should encourage business to use the railway for freight. Deputy Allen spoke about new initiatives to clean up the environment. We should also look at ways to get business to invest in the rail network. We see the fancy advertisement on television telling us about money being spent on the railways but that money will only keep what we have and fix up a few lines and a few carriages. There will be nothing new, no extra track and we will see increases in motor tax every year for the next five years.

Mr. Gilmore

I cannot recall complaining before about having too much time to speak on an issue but it is ludicrous that each spokesperson this afternoon has 30 minutes to make a contribution on a single tax measure when this morning the Government refused my party leader when he asked for adequate time to debate the Finance Bill, the most important finance measure of the year, and particularly the sneaky attempt by the Government to introduce on Report Stage an amendment that will give a tax break to private hospitals when the Government is not providing sufficient money to fund the health services.

It is appropriate, however, that this measure is being debated on the day the Finance Bill was rushed through the House and guillotined by this dishonest Government. This is a mini-Finance Bill, it is a tax raising measure just as the motion which preceded it in December was a mini-budget following the budget that was introduced then.

This is simple. The Minister for Finance comes into this House and tells us that he has reduced taxes and intends to keep down income tax while every other Minister is sent in to raise taxes and charges by any means possible. There has been a litany of such increases since the general election. College registration fees have been increased by 70%. Charges for medical care have risen as a result of the changes in the drugs refund scheme. The Minister for Social and Family Affairs is clawing back €12 million from the poorest tenants in the State through the increased personal contribution under the rent allowance scheme. The increase in VAT has affected first time home buyers among others.

Local authority charges and rents have been increased. The Minister for Finance is imposing an additional charge on credit and ATM cards. Not only are we being taxed on the card we put into the machine, now the Government intends to charge a tax when we remove the receipt from the machine after seeing the bad news on the screen. There have been increases in the television licence, ESB prices and bus fares. The largest single contributor to increased inflation in this State is the Government through the charges it is levying and this Bill makes permanent the increases in motor taxation introduced in the wake of the budget.

When the Minister for the Environment and Local Government came into the House in December to introduce the measure by way of a Dáil motion he told us this was a 12% increase in motor taxation that would go to the local government fund and would be ring-fenced for roads. We assumed if there was a 12% increase in motor taxation there would be a corresponding increase in the local government fund or in the allocations for the non-national roads fund. I asked the Minister about this at the time because I was aware that the Department of the Environment and Local Government had already circulated to local authorities their allocations under the local government fund and that, far from reflecting any increase, the allocation reflected the position in the book of Estimates – that there was no additional Exchequer money going into the fund. It was effectively frozen at last year's levels and the real increase for day to day local authority activities was of the order of 2%, considerably less than the rate of inflation.

I asked the Minister what additional increase local authorities could expect in their allocations or in allocations for non-national roads as a result of the increase in motor taxation. After many exchanges where the Minister told me I was wrong, where he corrected and contradicted the figures I put to him, he eventually made the admission of the day. He said, "I never said that this is extra money". When I pressed him on the issue, he said, "I want to maintain and develop the non-national roads structure. This is my job and I face choices. I was not prepared to see a decrease in the non-national roads fund. That would have been disastrous because we have achieved a high level of road maintenance". Motorists would be hit with a 12% increase in motor taxation but the Minister admitted that there would be no extra money for local authorities or roads.

Let us see how well the Minister did in maintaining the funding position. He announced a total allocation for non-national roads to local authorities on 27 January of €433.986 million. I compared that with the announcement made by his predecessor in January 2002 and found that Deputy Noel Dempsey had announced €438.46 million in State grants for non-national roads. A child can see that €433 million is less than €438 million, particularly after inflation is taken into account.

When we look at the detail of allocations for the restoration of non-national roads, an issue the Minister of State emphasised this afternoon, we find the decrease is considerably more. In 2002, €221 million was allocated for restoration but in 2003, after a 12% increase in motor taxation, the figure falls to €216 million. The Minister should tell motorists stuck in traffic this evening why, after increasing motor taxation by 12%, the money to fund the roads programmes and maintain and restore the roads is being reduced at a time when the number of vehicles is increasing. Motorists are being tricked by this measure. The Government has told them that motor taxation is being increased and there will be a corresponding improvement in the state of the roads but that is not the case. It is reducing the money for roads funding and using the increase in motor taxation as a means of raising general taxation to fill the pothole in Government finances arising from its spending splurge before the general election. Now it finds it has to cut public services and expenditure and raise taxes by all kinds of devious means. The Minister's statement in the House that motorists will not feel the pinch as the cost only amounts to between 4.1 cent and 8.2 cent per day will cut no ice with them, particularly in view of the state of the roads on which they have to drive.

I draw the Minister's attention again to an issue I raised when this topic was before the House last December. Whatever may be the state of national primary and secondary roads, the tertiary roads of this country, particularly in urban areas, are a disgrace. For many motorists driving home this evening, the worst roads they will encounter are those within their own housing estates which, in many cases, were built 20 or 30 years ago. Since then, the roads built by the original developers have not been resurfaced or maintained by the local authorities and are, literally, falling apart. Local authorities do not have the resources with which to repair and maintain those roads. In my local authority area, Dún Laoghaire-Rathdown, I was recently informed by the director of services, who is responsible for the roads programme, that the county council's estimate for the restoration of tertiary roads in its area is €10 million, while the amount of money it can provide from its own resources in any year is approximately €500,000. We are faced with a situation where, unless resources are provided to deal with those roads, what is now an issue of resurfacing, restoration and repair will very soon become a much bigger problem of total reconstruction at considerably greater cost to the public purse.

My proposal to the Minister, in the context of the debate on this Bill, is that a special fund be made available by his Department to enable local authorities to repair and improve tertiary roads. There used to be a practice in the Department whereby, in mid year, there was a review of moneys coming out of the local government fund and around August each year a small grant was made available when the Government found that car registrations had increased or some local authorities had underspent and some reshuffle of funding was possible. That mid-year grant was always very useful to local authorities to meet urgent road repair projects. Last August, due to the Government's post-election cutbacks, no such grants were made available to local authorities.

The final issue to which I wish to refer in this debate directly affects my constituency. The Minister and his Department will be well aware of a Supreme Court decision last week in respect of the M50 motorway scheme which, effectively, halts work on the scheme at Carrickmines. Having addressed the issue in an Adjournment debate last week, I do not wish to repeat everything I said on that occasion. One of the issues at the centre of the Supreme Court case, on which the Minister for the Environment and Local Government has remained remarkably silent, is in respect of the status of Carrickmines Castle and its environs. The case was put to the Supreme Court which, evidently, accepted that Carrickmines Castle is a national monument. The Minister for the Environment and Local Government, whose responsibility it is to state explicitly whether it is a national monument has remained remarkably silent on this question. The local authority and the National Roads Authority have been operating on the basis that it was not a national monument and had applied for what is known as a section 26 permission to allow the motorway construction to proceed. If it is a national monument, they will have to make a separate application under section 14 of the relevant Act. The one thing we do not know is whether the Minister with responsibility for deciding if it is a national monument will actually make that decision.

As a consequence of the Supreme Court decision, the cost of constructing this motorway is set to increase by a figure – depending on whose estimate one believes – between €50,000 and €100,000 per day and at best estimate, in a best case scenario, construction and completion will now be delayed by two years. It is time the Minister for the Environment and Local Government or the Minister of State came off the fence on this issue to tell the House whether Carrickmines Castle and its environs constitute a national monument. If it is not a national monument, the local authority can take a particular route and if it is a national monument, there are obvious consequences which flow from that in terms of what the courts may subsequently decide. It is an issue on which the Minister can no longer remain silent. The sequence of bad decisions – I will put it no stronger than that today – which were made in the lead-up to the approval of this motorway scheme, have resulted in a situation whereby a national monument, Carrickmines Castle, is at risk, the construction of the motorway will be considerably delayed and the cost to the taxpayer will increase enormously.

Mr. F. McGrath

I wish to share time with Deputies Harkin, Cuffe and Morgan.

Acting Chairman (Ms O'Sullivan)

Is that agreed? Agreed.

Mr. F. McGrath

I welcome the opportunity to speak on this Bill. The primary purpose of the Bill is to give legislative form to the increases in motor tax costs and trade plate licences. It involves a standard across-the-board increase of 12%, which is more than twice the rate of inflation. The Bill aims to put this revenue into the local government fund. I welcome and support the concept of a local government fund, particularly when this money is earmarked exclusively for local authority purposes. However, there is still a long way to go in relation to radical reform of local government, especially with regard to its finances, including motor tax investment schemes. Sections 1, 2, 3 and 5 deal with technical changes, replacing the former £90 with €114 and providing for revised tax rates for vintage vehicles. Section 6 provides for increased fees for trade plate licences and the replacement of trade plate licences in respect of motorcycles and all other vehicles.

That may sound very good in this Bill but motorists are not happy. They have genuine concerns about value for money. The question is regularly asked as to whether we are getting value for money and most motorists seem to answer "No". They do not mind paying their motor tax and making their contribution to the wider community but they resent – I support them in this regard – the absence of real value for money in relation to roads, services for dangerous roads and safety measures. These are the type of questions people ask Deputies. The sad reality is that not enough money is being spent to ensure maximum road safety. I agree that we have improved the roads over the years by improving the motorways, but there are many roads which are a serious danger to the public. In many parts of Ireland one can see secondary roads in very bad condition. There are major roads in my constituency in Marino such as Griffith Avenue where the regular comment from the local authority is that there is no budget for serious repairs. This money should be invested on these inferior roads and traffic calming measures. This motor tax belongs to the people. The elected members of local authorities do not need to have their hands tied by the Government in raising funds with new creative and radical ideas. We must stop hammering the motorist and when people pays taxes, we must spend them wisely on their behalf.

Section 7 provides for a technical amendment to extend the national vehicle file records to include vehicles prior to taxing. We need this kind of regulation which plays an important role in measures to combat crime or tax avoidance. Nobody is above the law and that message should be sent out loudly and clearly, particularly to those who refuse to pay their taxes and, in particular, motor tax. Society is now moving in that direction but we need to keep the momentum going. We should not be afraid to state that by paying taxes, one is paying for services and that occasionally we must raise taxes to pay for services. However, there should be no tolerance for anyone, particularly the well-off in society, who want to avoid tax or come up with scams to dodge tax.

My other major worry about this Bill is whether we have enough gardaí to implement it in an effective way. If not, we are codding ourselves and, worse still, we are codding the people. This legislation is not worth the paper on which it is written, if that provision is not encompassed in it.

Section 8 provides for the legal framework to enable the Minister to process on-line motor tax applications. This can be extremely helpful to the consumer and to the staff. It will assist staff in a positive and efficient way. It is the way of the future and it should be developed as quickly as possible. This type of technology should always be used for the benefit of the people and to promote efficiency and quality services for the consumer.

Returning to the local government fund, it is essential that this fund is expanded. We cannot have local authorities running around each year looking for money or Ministers threatening to dissolve them, as in the case of Dublin City Council. It is not good for local democracy and it is certainly not good for the taxpayers. This motor tax and other revenue must be pumped into the city councils to prevent the introduction of double taxation like bin charges or water charges. Once they get the bin charges through, incidentally, let there be no mistake about it, these extra charges are on the way.

There is plenty of space in the local government fund to raise money and develop services. This Bill has the potential to allow that but I am not optimistic as I feel the Government has decided that the way forward is to treat local authorities and elected members of city councils with contempt. I welcome the opportunity to discuss this Bill and I hope some day we will get legislation which will radically reform motor tax and bring in more democratic and more balanced local government.

Ms Harkin

I am happy to have an opportunity to speak on the Bill, the objective of which is to extend the Finance (Excise Duties) (Vehicles) Act 1952 and the Finance (No. 2) Act 1992. While the primary purpose is to give legislative form to the increases in motor tax rates and plate licences, I ask the Minister to use the opportunity afforded by the debate on, and subsequent Com mittee Stage of, this Bill to make changes to the tax relief for vehicles purchased for use by people with disabilities.

A person who has received a primary medical certificate can apply for relief, either as a driver or passenger, or there is a provision for family members to apply. This scheme provides that for a driver with a disability, VRT and VAT borne in respect of the purchase and adaptation of the vehicle may be repaid up to a maximum of €9,525 provided that the vehicle's engine capacity does not exceed 2,000cc. This means that a person who purchases a car with an engine capacity of 1,100cc or 1,200cc will get a lower refund that a person who can afford a more expensive model with, for example, an engine capacity of 1,800cc or 2,000cc.

However, the real inequality exists where up to a maximum of €15,875 can be repaid in respect of VAT and VRT under the heading of passengers with disabilities or family members. This tax relief is available in respect of a vehicle with an engine capacity which does not exceed 4,000cc. In other words, if a person can afford to buy a top of the range Mercedes with an engine capacity of 3,800cc or 4,000cc, for example, he or she will benefit to the full extent, whereas if a person can only afford to purchase a more modest vehicle with an engine capacity of 1,500cc or 1,800cc, the person will not get the maximum benefit. Therefore if one has a great deal of money to spend, one can save a great deal.

There is a strong case for making a standard payment to all disabled persons of, say, €12,700. This would have the effect of introducing equity into the system rather than the current position, whereby those with the most money to spend benefit most and those with the least money to spend benefit least.

However, to avail of this tax relief a person must, in the first place, be in possession of a primary medical certificate. The medical criteria for this certificate includes a stipulation that the person be without one or both legs, or be without both arms. There are other criteria but I am particularly interested in these two. Any person must be recognised as disabled, certainly as far as driving is concerned, if he or she is without one arm, yet such a person does not qualify for a primary medical certificate and therefore cannot qualify for the VAT or VRT refunds. There is such a case in my constituency and I am sure the Minister will recognise that a serious inequity exists here. Surely the purpose of the tax refunds is to allow disabled persons' mobility and independence? If persons without one arm wish to get on with their lives and preserve their independence and their mobility, and adapt their vehicles so that they can drive, surely they too should be allowed to avail of these tax refunds?

While I understand that the issuing of a primary medical certificate is not within the specific remit of the Minister of State, Deputy Gallagher, the consequences of having or not having such a certificate fall within his remit. I also understand that Departments are subject to certain fiscal con straints but if my earlier suggestion of a flat-rate payment to all disabled drivers were introduced, it is more than likely that money would be saved. If the medical criteria for getting a primary medical certificate in the first place were extended to persons without one arm, the extra number concerned would be quite small and money saved by introducing a more equitable system for all disabled drivers would more than cover the cost of extending the criteria.

This is an opportunity to introduce a more equitable system and at the same time extend that system to include those who are disabled but who are currently outside the system, and it probably would not use up any extra resources. I ask the Minister to consider that proposal in the context of this legislation.

Mr. Cuffe

The measure in the legislation is a realistic way of tackling the issue of raising revenue from the motor vehicle industry. However, the debate should centre on whether it is the most equitable way of dealing with this issue or whether we could make further reforms which would provide an element of greater equity for the motor car user.

I drive a Mercedes-Benz Smart car. Its engine capacity is 600 cc and I pay an annual tax of €144, which is the same as I would pay if I had a 1,000 cc car. It would also be the same if it were 900, 800, or 700 cc. The Minister should consider the lower end of the scale and introduce reductions. The car I drive is the most efficient and environmentally friendly petrol-engine car on the road, but I get no breaks from the Minister for this. The taxation for cars with engine capacities of less than 1,000 cc should be reduced commensurate with the reduction in engine size. I do not believe the current arrangements are fair on people who try to do their bit for the environment but do not receive a break in terms of annual tax.

It would be more equitable to put the taxation on fuel. This tax hits equally those who travel 1,000 km per year and 100,000 km per year. Let us take the example of a widow who drives her car once a week to and from Mass in the local village. She should not have the same tax burden as somebody who travels 100,000 km per year. It is one of the failings of the current tax regime that we do not provide any bonus for those who try to minimise their annual mileage. We should try to address this issue through a slight increase in tax on fuel and a slight decrease in annual tax.

This tax is ring-fenced for the purpose of financing local government. This sets a dangerous precedent as local government becomes dependent on tax revenue from the motor vehicle industry. It would be preferable if the Minister were to reform the financial basis of local government and give it real autonomy, as opposed to using various methods of taxation to provide its income. I do not think local government should have to look very carefully to find funding from the car industry. It should be given funding on an annual or triennial basis in its own right. It is high time the Minister gave autonomy to local government rather than making it wait, cap in hand, for the following year's revenues to accrue to it. That is how it works elsewhere in Europe. Local government should not have to wait for its motor tax receipts to know whether it can provide school meals or funding for new buildings. It is dangerous to make local government dependent on motor taxation.

We should also consider the allocation of funding to public transport. This funding is dedicated to local government, but if, for example, a strong effort is made to improve public transportation, getting more people out of their cars and onto buses, that is not reflected in the tax take. In fact, the tax take will go down. There is a contradiction in ring-fencing motor tax for local government. Local government should have its own financial footing.

We should also have some way of taking into account the actual environmental damage caused by the vehicle. As we try to reach our Kyoto targets, we should be looking not at annual tax measures on vehicles, as the Minister proposes, but at the amount of fuel used, pollution created and climate-changing gases emitted by the vehicle. That would be a modern way of dealing with the environmental pollution caused by the motor vehicle, rather than the single-minded and specific annual tax being proposed in this measure. We could have a much more equitable system. I ask the Minister to revise the rates of tax to be paid on cars of less than 1,000 cc to take into account the smaller amount of environmental damage created by small engine cars and consider the case of the widow driving her Mini to Mass. She does not benefit from what the Minister is proposing today. I believe that a more equitable system is possible and I hope the Minister can deliver it.

Mr. Morgan

On one hand, I congratulate the Minister on putting the boot into those stubborn people who refuse to leave their cars at home. On the other hand, however, when we look at the options people have, we begin to see how unfair this tax increase really is. Can motorists leave their cars at home and travel by public transport? Of course they cannot, except in a small number of areas. What if they need their cars to travel 20 or 30 miles to a train or bus station, as I and many others do? How much will it cost to leave the car at the station when these new charges are introduced?

What are motorists being offered in exchange for this massive increase in tax? Gridlock – a good old-fashioned bumper-to-bumper, five-mile-per-hour crawl while one's job or business waits for one's arrival. They also get tolls. Just to make sure the motorist feels totally ripped off by the 12% hike, he is pushed into a toll plaza. If the motorist manages to arrive in one of our wonderful cities or towns, the Minister offers him or her totally inadequate parking facilities, and where there are parking spaces the motorist is further ripped off by the local authority who in turn is seriously underfunded by, unsurprisingly, the Minister's Department. We have VRT, VAT, tolls, parking charges, gridlock and potholes. I am sorry, we no longer use the word "pothole". According to motoring correspondent Brian Byrne, the term does not exist on the NRA's website. In an article a few weeks ago, he highlighted the new term for potholes: "surface distress". This is the new spin from the NRA on potholes – the Minister can check it – as if it mattered to motorists who are unfortunate enough to drive into one of these holes. The effect is the same whatever it is called.

We do not have reliable public transport, adequate parking facilities or park and ride facilities. All in all, it is unfair. The recent hike in diesel charges introduced on the night of the budget in December represented an increase of €2,000 per truck per year, according to the Irish Hauliers' Association. That is a significant increase in a key area of our commerce infrastructure – moving goods from point A to point B quickly and cheaply. Hauliers are now suffering, and this is before the Bill has even gone through the Dáil, a €2,000 increase per truck per year. Of the Exchequer's €30 billion annual income, motorists already pay more than €4 billion, so they are already carrying a significant burden. Motorists are the soft underbelly of Irish society, victims of not only the Government and local authorities but also insurance companies, oil companies and clamping and towing companies. It is endless.

I accept that raising further tax revenue is necessary. The Revenue Commissioners recently conducted a study. It is unfortunate that a report by them, examining the top 400 earners in the State and the tax they pay, was not available at the time of the budget. It was published on 13 December and concluded that some 24% of the highest earners pay no tax while a further 18.8% of top earners pay less than 5% tax on their income. On the other hand, the burden is borne by the soft underbelly of society – people who are victimised by everyone. This is not constructive taxation and it is not alleviating the burden on those who need more help. For example, a widow living in rural Ireland and going to chapel or buying her few groceries is caught in this drastic net, even though her small car may be her only means of transport. Meanwhile, on the other side of the scale, the Revenue Commissioners admit that the richest people are paying minuscule contributions towards the State.

The cart is very much before the horse in this instance. I appeal to the Government to restructure the tax system to give fair play and a break to those who need it. The report of the Revenue Commissioners details clearly where the money is coming from. It is grossly unfair that motorists should be burdened in this way. If the tax revenue generated were to contribute towards some alleviation of our environmental problems, we could acknowledge it as a step in the right direction. However, it is not and makes no attempt in that direction, like the pay-as-you-go system Deputy Cuffe suggested. This is a grossly unfair tax. I wait with interest to see if this money will come back to local government as it should do. However, I can sense the Minister for Finance, his fingers twitching, counting the euros as they come in to see where the money can be diverted to and I cannot see it going to people who would benefit from it.

If this revenue was funding projects such as park and ride facilities which would free up the gridlock that affects our towns and cities by getting people onto public transport, it would be welcome. If it were spent on public transport it would benefit those of us who cannot use public transport as often as we would like because it is inadequate and undependable. If even some of this additional tax was spent in these areas there could be an argument for the increase, but this is the wrong way round. This taxes those who can least afford it while people who can afford to be taxed are left alone. It is a sad indictment of Government policy that this is allowed to continue.

I ask the Minister of State to tackle his colleagues at Cabinet and ask them to catch themselves on, have a look at the matter and see how it is for people in the real Ireland as opposed to the horsey world in Kildare. If Ministers were to do that, we would have an effective change of policy.

Mr. Andrews

This Bill comes before the House on foot of the budget changes announced last December. It is one of the more difficult aspects of Government, which is not easy to deliver and which is not easily entered into by Ministers. We are part of a global economy and, as it slows, we must put the brake on more so than any other economy in the OECD. We are doing our best to ensure that fundamental budgetary and fiscal policies remain steady, that we stay within the terms of the stability and growth pact of the EU and that we deliver on what people elected us to do, which is to keep the economy on the straight and narrow.

All of our commitments prior to the general election were predicated on growth in the economy. Although that is not forthcoming, the economy is still growing faster than other EU and OECD countries, albeit not at the rate which we have become used to over the past seven years. As a consequence, unsavoury increases have been forced upon us and we must have the courage to push them through and stand over them.

The key issue in regard to motor vehicle tax is how we are going to comply with our obligations under the Kyoto Protocol. As Deputies know, we are obliged under the terms of that protocol to reduce our greenhouse gas emissions to 13% of our 1990 figure. We are currently way in excess of that at around 25% and the projection for 2010 is over 30%. We have a gun to our head in that if we fail to comply with our obligations we will face fines. While concern is expressed by Members opposite about the direct impact of these measures, the impact of the fines would be even greater. We must face this issue head on.

A tax strategy group has been established under the various Departments to analyse the best way to introduce carbon energy taxes. How we do so is important because it will be one of the most challenging aspects of fiscal policy over the next 12 months. All Deputies should contribute to this ongoing debate. No decisions have been made other than we must comply with Kyoto and introduce carbon energy taxes. Whether we do so alongside the current motor vehicle regime is a matter for discussion, as is what we do with such taxes. Some people feel that carbon energy taxes will reduce competitiveness but that depends on what we do with the revenue and how many other countries comply with their obligations. Given that our output of greenhouse gases is so far in advance by comparison with other countries, we are fooling ourselves if we believe we will protect our economy by continuing to disregard our obligations. We are already producing over 17 tonnes of greenhouse gases per person per annum which is far in advance of the 10 tonnes per person per annum in the rest of the EU and 2 tonnes in the developing world where climate change is most adversely felt. Unless we deal with these issues immediately, we will pay the penalty down the road. We have a real duty to do so in the next 12 months and deliver upon our obligations by 2010.

As regards the implementation of these taxes, the key issue is that lower income groups should not be unduly burdened. People on lower incomes spend a proportionately higher amount on fuel than people with higher incomes and we must bear that in mind during the forthcoming debate. I agree with what Deputy Cuffe said about the relationship between the amount of fuel burnt and tax paid under the simple principle of "polluter pays"– a 4,000 cc car does not burn energy at the same rate as a smaller one. This regime is going to be revolutionary in the changes it will bring. It will be welcomed and reasonably easy to sell politically. It has been tough to sell the local bin charges that also come under the polluter pays framework. It was a mistake to get rid of water charges as it is a scarce resource. Our environment is becoming a scarce and valuable resource and we must consider charging to protect it. Many people driving on our roads do not seem to care about the implications of their burning of greenhouse gases. We must also consider incentives for best practice so that industry in particular is encouraged to use the best forms of manufacturing and carbon energy fuels in those processes.

I am a member of Dún Laoghaire-Rathdown County Council and I am sure most members of local authorities are familiar with the difficulties we are having with the local government fund. I am delighted to note that funds raised through the increases will go directly to local government funding for non-national roads and other discretionary spending. I support the Bill and commend it to the House.

Mr. O'Connor

In the short time I have been in this House I have drawn on the experience I gained at local authority level and I am now preparing to leave that part of my political career behind. While I am not suggesting colleagues who have not served at local authority level have less experience, the experience one gains at that level is valuable.

Mr. Naughten

The Deputy should talk to the Minister for the Environment and Local Government about that.

Mr. McCormack

He should contribute to Deputy Ring's fund.

Mr. O'Connor

On another occasion I said that turkeys do not vote for Christmas but they make a large contribution to the season.

I told a friend of mine I was coming to the House to speak on the Motor Vehicle (Duties and Licences) Bill 2003 and he told me it did not sound very interesting. I tell this story because sometimes we deal with issues the public perceives to be uninteresting yet they can affect the daily existence of people. I live only eight miles from this House but because of public transport limitations I find myself having to use my car. I look forward to the day when I will be able to take the Luas, a good bus service, or, if God is good to me and gives back my fitness, I will be able to walk the eight miles to work.

The business of this Bill is important and I am happy to support it. I admire the work of the two Ministers of State in attendance, Deputies Gallagher and Michael Ahern.

Mr. Morgan

The Ministers of State had better watch out, Deputy O'Connor is after their jobs.

Mr. O'Connor

If Members from other parties cannot admire Ministers of State, I certainly can.

The purpose of this Bill is to give legislative form to the increases contained in the financial resolution passed by this House in December last. The technical issues apart, I would like express my views on the areas where these revenues are spent. As Members are aware, revenue collected under this Bill has been ring-fenced and put into the local government fund since 1999. It is exclusively used for local authority purposes and is distributed to the authorities as discretionary grants in respect of day-to-day spending and expenditure on non-national roads.

When I speak about the state of non-national roads I am sure many colleagues will agree that while our national routes may be improving, there seems to be a marked deterioration of local roads both urban and rural. As I drive around my constituency to attend clinics in Tallaght, Greenhills, Templeogue and Firhouse, I not only have my constituents complaining about this but I am personally aware of the impact on my car of this disrepair. I call on the Minister to investigate the potential for the value for money section in his Department's internal audit section to do a report on how the grants from the local government fund are being spent on local roads. While I expect that this would be a lengthy task, I suggest that an urban and rural authority be selected firstly and, subject to the findings of this report, a decision be made to extend the exercise to other authorities.

Every day we are made aware of the demands for State support in areas such as education, health and social welfare. This will be a scheme where the revenues accruing from Ireland's large vehicle fleet should ensure a decent standard of road maintenance that, on the face of it, we do not have. I do not say this to get at the Department or local authorities. In addition to the value for money report, departmental officials should also consider a five to ten year development plan for all non-national roads that would, like the school maintenance programme of the Department of Education and Science, list the upgrading of the local roads on a priority basis. Over a maximum ten-year period most, if not all, non-national roads should be upgraded. Taxpayers would then see the difference in our roads and the value of work done.

Much of the business transacted in this House has the potential to impact on all citizens and communities. Sometimes the title of Bills and the manner in which business is dealt with does not catch the public's imagination. It is important in a debate like this that we stress the positives. I missed some of the other contributions but cars, and the use of them, is a subject at which we are all entitled to look. We must all understand we are causing problems for each other. I do not mean to be patronising, but those of us who travel only a short distance to Leinster House are in awe of our colleagues who have to travel 200 or 300 miles to get here. I do not know how people in that position cope – I find it difficult enough to cope with the eight miles I have to travel. If one goes onto the streets around Leinster House one will see the effect too many cars is having on the environment. I commend the Bill to the House.

Mr. McCormack

I wish to share my time with Deputies O'Dowd, Crawford and Naughten.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

Mr. McCormack

This measure is not about the issues the previous speakers mentioned. It is a direct tax increase of 12% on the cost of motoring. It hits the easy target again and has nothing to do with carbon energy taxes. It is simply a tax on the motorist.

The Minister of State said the motor taxation was passed by the Dáil on 12 December 2002 in the financial resolutions. Technically, he is correct. It was passed by the Dáil but only by the Government parties in the Dáil. The Opposition parties opposed it, as they will again when it is brought to a vote. It is an unjust tax on the motorist.

Deputy Harkin referred to disabled drivers and disabled passengers. I put down a parliamentary question on this issue and was told that a review group had been set up about two and a half years ago on the disabled drivers and disabled passengers tax concessions scheme. It reported recently to the Minister, according to the Minister's reply of 18 February last. The Minister should deal with that report urgently. The review has been going on for two and a half years so why can the report not be dealt with so that disabled passengers and disabled drivers get the concessions to which they are entitled?

Will the costs involved in going on-line be taken out of the finance raised? The Minister, Deputy Andrews and Deputy O'Connor stressed that the fund which was established under the Local Government Act 1988 is ring-fenced in law for the specific purpose of local government and cannot be used by the Exchequer for any other purpose. The fund is financed from the proceeds of motor taxation and this is supplemented by an Exchequer contribution. If that were true, I might be inclined to support the Bill because the county roads need all the money they can get. However, nothing could be further from the truth. That is not the situation.

There is a 12% increase in motor taxation. There should be a subsequent or corresponding 12% increase in grants for county and tertiary roads. Until I see that 12% increase in the fund, I cannot accept that it has been ring-fenced. The money is being put into the fund but the fund was reduced because the extra taxation of 12% was due to go into it. The figures confirm it. The Minister for the Environment and Local Government announced on 27 January last that a total of €433 million was allocated for non-national roads. In the same month last year, €438.46 million was allocated for non-national roads. Instead of a 12% increase, there is a decrease. This is a fake and the Government backbenchers have been taken in by it. With an increase of 12% in tax and many more cars and other vehicles on the roads, far more revenue is being generated by road tax. However, there is still a decrease in the funds for non-national roads. That is the factual position and if the Minister can convince me otherwise, I will accept it.

The county roads and roads in city housing estates are falling apart. It is false economy not to repair them. Once the surface of the road is gone, the foundation will be washed away because without the surface there is nothing to hold the road in place. A small amount of money spent now on the restoration of the surfaces of these roads will save millions in the long run for the Department and the local authorities. The Minister and the Government backbenchers gloated that this money will be ring-fenced. That is false. The money is being put into the fund but there is no increase in the fund.

According to the explanatory memorandum, there will be a revised road tax for vintage vehicles. That is not clear in the Bill. What does that statement mean? The Bill also contains two technical amendments to motor tax law and an enabling power to facilitate the processing of on-line motor tax applications. How will that affect local authorities? Facilities will have to be set up in local authorities and extra staff will have to be employed. Will the local authorities be compensated for the extra cost incurred in establishing those facilities? I hope the Minister will address these questions.

Mr. O'Dowd

Motor taxation is a serious issue, particularly for those who have to pay it annually, if they can afford it. Many people pay their motor tax quarterly. The increases in motor tax and the general tax increases on motorists are savage. The private motorist is seen as an easy target for governments of all hues all over the world.

The issue is where this money is spent when it is put into local authority funding. I live in Drogheda and drive more than 30,000 miles per year. Most of my time is wasted sitting in traffic in Dublin city. Despite the transport policies and the funding Dublin Corporation puts into transport and roads, I cannot see any money being invested in park and ride facilities on the outskirts of the city. There is no park and ride facility on either the main road from the north into Dublin or on the Ashbourne road, although there are thousands of motorists.

If people do not have access to public transport, they must use their cars. They have no choice. However, people who come into the city using these two routes could exercise a choice if there were locations where they could park their cars for a reasonable fee and travel into the city on public transport. That is not happening. It is shameful. It is a waste of time for the drivers who are stuck for hours in traffic. If one leaves this building at any time between 4 p.m. and 7 p.m., one will be delayed in Pearse Street for up to three quarters of an hour. I do not know if the staff in the Department have examined this problem. If they have, they should put pressure on Dublin Corporation to address these issues so people can use the alternative of park and ride facilities to get into the city in time for work.

The other issue is the cost of petrol and diesel. If one travels on the road from Drogheda to Dublin via Swords, in every petrol station one will pay a higher premium for fuel than on the Ashbourne road. It is cheaper to drive on the Ashbourne road than on the main road to the North. The reason is that there are cartels. On some routes and in some towns there is a uniformity of price, whether it is 79 cent, 82 cent or 85 cent per litre. There can be a difference of seven or eight cent per litre in the prices charged on different routes.

It is time for the Minister of State to write to the Director of Consumer Affairs or the Competition Authority directing them to investigate the exorbitant charges on various routes. Diesel and petrol can be purchased at a location near Moate more cheaply than anywhere else in the country, but how can it be sold for such a low price there when the rest of us have to pay so much elsewhere? It is a serious issue because motorists are being ripped off.

We should take a holistic approach to this matter. We all need to drive sometimes but we should also try to use public transport when we can. Motorists are being taxed out of all proportion, particularly with regard to fuel costs in certain areas. Drivers can pay through the nose for fuel in isolated towns like Dingle. An investigation of such charges should be undertaken on a national level.

Mr. Crawford

I oppose the Bill which is just another form of taxation. On budget day, the Minister for Finance announced certain fiscal measures but he did not mention the 12% rise in motor tax which was introduced the following day. I have known the Minister of State for a long time and I realise that he means well. In his speech, however, he said that along with funding roads, adequate finance must be provided for local authorities to perform all their functions. As a member of a local authority I know there was no increase in funding for roads. In addition, there is tremendous pressure on local authorities due to the better local government policy being introduced – a step that was supported by all parties – yet no extra funding was provided to pay for it. As a result, more local authority staff have to be paid, but funding is insufficient to allow them to deliver a better service. It is a very serious issue.

The Minister plans to introduce a Bill to allow county managers to find money wherever they like. Earlier this year a county manager wanted to impose a charge of €140 per tonne for waste disposal, although the price was reduced to €101 through negotiation. If the Minister gets his way, however, councillors will not have the authority to get such charges reduced, so that is a means of imposing more indirect taxes by stealth.

I have to deal with Monaghan County Council on a daily basis. In 2000, we had €10.5 million for local and regional road development. In 2001 the figure was €12 million, and in 2002 it was €13 million. This year, however, road funding has fallen to €12.92 million, even though motor tax increased by 12%. A senior engineer has said that it will take 15 years to upgrade the remaining roads in Monaghan.

Before he became a Member of this House, the Minister of State, Deputy Parlon, negotiated a roll-over tax which is another indirect charge on those whose land is acquired by compulsory purchase order.

A number of speakers have mentioned VRT and VAT refunds for handicapped drivers. Recently, I came across a case of a mother whose five-year-old child has Peirthes, a rare disease. It is affecting the child's leg yet he cannot be operated on until he is in his forties. Nonetheless, his parents have been refused a VRT/VAT refund on their car which is essential for transporting their child in a comfortable manner. The Minister of State should re-examine how that refund scheme is operated. Establishing committees to undertake a two and a half year review is a great way of avoiding an issue, but the committee has now reported and appropriate action should be taken as soon as possible.

The taxation system should be re-examined seriously. In recent years, the Minister for Finance has granted a sizeable decrease in income tax to middle income earners. However, poor people in rural areas need private transport because there is no alternative. Despite that, VRT is being increased on the average family car, which will hit people who can least afford it. In addition, the price of petrol and diesel fuel is increasing. The Minister should not charge elderly people in rural areas, many of whom are poorly off, any more than he has to. They do not have the option of using public transport. There are no railways in Cavan, Monaghan or Donegal so people have no choice but to use cars.

Mr. Naughten

The Bill represents a tax on business and regional development because it will introduce a rise in the cost of fuel. Every one cent increase in fuel prices impacts at a rate of 0.7% on sales in the haulage sector which has suffered from insurance cost increases of between 36% and 63% in the past 12 months. A 12% rise in motor tax is more than double the rate of inflation. It is unacceptable because it is fuelling inflation. When the budget was introduced, the Minister for Finance and the Tánaiste spoke ad nauseam about trying to ease inflationary pressures. When they met the social partners they gave a commitment to reduce inflation during the remaining 18 months of the current agreement. The 12% rise in motor tax will put huge pressure on the haulage industry which is already trying to cope with increased diesel fuel charges introduced earlier. All this will impact on inflation, thus affecting import and export costs, as well as the cost of distributing goods to rural areas.

The Minister for Transport has proposed the introduction road tolls which will represent a fresh tax on investment and regional employment. The tolls will only operate in the regions, not in and around Dublin, so they will be badly hit.

Earlier in the debate, Deputy Andrews spoke about the agreements we signed up to under the Kyoto protocol to reduce greenhouse gas emissions by 13%, based on 1990 levels. At the moment, however, we are exceeding those levels by 20% and it is disappointing to see that vehicle exhaust emissions have risen by 26% in the last six years. The Government has done nothing about this issue but, having introduced the Finance Bill, the Minister for Finance is now talking about introducing carbon taxes. We have heard nothing, however, about encouraging the use of renewable fuels such as rape seed oil. Such fuels are currently viewed in the same way as hydrocarbons and so they are taxed at the same rate of duty. Why was a reduction in duty on rape seed oil diesel not considered? Why should the excise duty on renewable energy sources be the same as that for hydrocarbons? This does not encourage the use or development of such fuels. Why are we not encouraging their development and use by reducing excise duty on renewable resources?

This legislation is short-sighted. Every year when these proposals are made I raise the same issue but the Department fails to address it. We need to take a different attitude, such as that adopted abroad.

Germany, France, Italy, Austria and other countries take a different attitude to renewable energy sources such as rape seed oil. For example, in Austria a great deal of technology has been developed in relation to bio-diesel and encouraging its use. The use of bio-diesel would reduce costs on industry, the cost of exports and it is a renewal energy source, which would reduce the cost and the demand we put on hydrocarbons. The difficulty in recent years has been that the differential between the cost of oil and hydrocarbon products has not been sufficient to support the development of new technology in this area.

For example, in Oak Park where a tremendous amount of research has been done in this area, the conversation of some land from food to biofuel produce would ease some of the major problems facing agriculture and other sectors of the economy. Ireland has a high degree of dependence on imported energy. Farmers could make a significant contribution to the national energy supply. As a rough guide, each 1% of farmed land devoted to biofuels could supply 1% of the national energy requirement.

Ireland's greenhouse gas emissions are growing rapidly. The livestock industry contributes to the cause of greenhouse gases. Some displacement of ruminant animals by biofuel production would help in the reduction of methane emissions and fossil fuel consumption and help to support farm incomes. We know the Government's attitude to farmers' incomes. Such a measure would benefit the economy, employment and the agricultural community. That is hard for the Government to swallow, but it is a measure that should be considered. A 5% reduction in the national herd, which the Government is targeting through stealth taxes on the farming community, and 50% of that vacated land used for biofuel production would have a major impact on national greenhouse gas trends.

The disposal of organic by-products from the agriculture and food industry is becoming an increasing problem. For example, recovered vegetable oil and tallow, which is a massive problem in the agricultural sector, could be used as a biofuel and have a major impact in reducing oil imports. The Government has not done anything to support farm incomes or to encourage the use of biofuels, which could have a major impact on reducing the costs of exports and imports and help us meet the emission targets set under the Kyoto Protocol. To date, we have not seen any action from the Government in this area.

Dr. Devins

I am pleased to speak on this Bill. I, like I am sure everybody else, do not like paying tax. It can be argued that motor tax is no different, but I stress that there is a big difference. In this case the revenue collected by way of motor tax goes directly into maintaining our roads. It is used in road restoration and maintenance programmes. In other words, road users are being asked to pay for road maintenance.

There is a difference between national roads and non-national roads. I come from Sligo where there are only two or three national roads while 95% or more of the roads are non-national. The money collected by motor taxation goes directly towards helping to maintain the upkeep of these roads. I agree with the previous speakers who said that roads are vital in the west. They are the lifeblood and arteries of social and business life in my county and elsewhere throughout the west. However, those roads must be maintained and kept in a good state. The revenue collected by way of motor tax in each county will be spent on maintaining the roads in those counties.

In a small county like Sligo or Leitrim, the number of road users has increased enormously, but the revenue collected by way of motor taxation is not sufficient to maintain the roads to the required standard. I commend the Government on topping up the local government fund, which has ensured that the roads in my county have been maintained in a good state.

We have a five year rolling programme under which county council engineers update and publish each year the roads that will be restored and maintained. This has been made possible by the local government fund developed by Fianna Fáil, which is committed to ensuring that local government continues to meet the needs of local people.

Another aspect of the Bill I welcome is the provision whereby one can pay one's motor tax on-line. I remember queuing for almost two hours in a motor tax office some years ago to pay my motor tax. With an increase in staff and the development of facilities, the frequency with which people can be dealt with has improved enormously. The use of the on-line facility will speed up the service even more.

I wish to refer to insurance certificates. When a person buys a new car, they apply for an insurance certificate in order that it can be put on the road. However, many constituents have called to me in recent months complaining about the inordinate delay in the issue of insurance certifi cation. They have paid their premium to the insurance company, but it has taken two, three, or, in one case, four weeks for the insurance company to issue the insurance certificate. A member of the Garda Síochána pointed out to me recently that such motorists could be penalised for driving their cars without displaying an insurance certificate. However, the fact that there is a delay in obtaining the certificate is not their fault; it is the fault of the insurance company. With the onset of the penalty points system, I ask the Minister of State to consider this complaint. With all the resources that are at the beck and call of insurance companies, it is unreasonable that it can take up to four weeks before motorists are issued with a simple certificate to enable them to legally drive their cars on the road.

I agree with Deputy Naughten that toll roads are down the road, but I would take a different line from that of the Deputy. I commend the Minister, Deputy Brennan, on bringing a degree of original thinking to the problems that beset us in terms of our roads. I am sure the Minister will not put in place a toll road in an area unless there is an untolled road there. That is what happens on the Continent and such facilities must be put in place here. If a toll road is to be put in place, those who want to use it will have to pay the toll and presumably they will get to their destination quicker than if they did not take that road, but if motorists do not want to pay a toll, they should be able to travel on good quality non-national or national roads to their destinations.

The ability of county councils to raise revenue through motor taxation to restore and maintain county roads, which are the lifeblood of rural areas, will be greatly enhanced by this Bill.

Dr. Cowley

I wish to share time with Deputy Ring.

Acting Chairman (Mr. Sherlock)

That is agreed.

Dr. Cowley

I am pleased to speak on this Bill. Anybody from my county would be very aware of the condition of the roads in the county because motorists are continuing to pay increased taxes, but the roads in that area have not improved. Little seems to have changed. This Bill is to give legislative effect to more increases in motor tax rates, which does not make sense.

People in Mayo are not unreasonable; they are very tolerant and have accepted a lot. The road from Casltebar to Newport is a disgrace. It has been on the cards to upgrade that road for the past 18 years. Ministers have driven on that road and they have visited my area, yet the condition of that road has not improved. That is why I am in the Dáil because the Government has not delivered on a commitment in this regard, as a result of which we still have awful roads.

The conditions of the road from Ballina to Bohola scheduled for completion in 2003 is as bad as ever. The road from Castlebar to Westport, the regional roads, the road to Achill – I can talk about all the roads, including the main road into Mayo – are a disgrace. Mayo is famous for having the worst primary entry route into a county. We are told about balanced regional development, but where is the commitment to the N5 that would allow the people in my area to get balanced regional development and be equal to others? However, we are not to be so favoured. The Government has failed to prioritise any major road project in the west. The situation will continue where the development of the south, east and Dublin will be copperfastened. That was brought out in the Fitzpatrick report on the Border, midlands and western area which stated that there were no clear time-bound targets for anywhere except Dublin and major inter-urban routes. We need precise targets for the development of roads to the west if we are to have balanced regional development.

It angers people to see that the major expenditure has been in Dublin and on major inter-urban routes, with the southern and eastern regions a whopping 45% ahead of target. How can this be termed "equality"? It is like Animal Farm; some are more equal than others. Those who live in the Pale, south and east are certainly more equal than the rest of us.

It does not make sense because the Pale is already chock-a-block with people and does not need any more. Half our graduates must go to Dublin to find their first job. It is ridiculous when the answer lies in balanced regional development. All roads lead to Dublin and that is so obvious, it is immoral. Other speakers referred to countries such as Portugal and Cyprus which have a coastal road around the country which allows any area to be accessed. The system in Ireland is a recipe for congestion.

I was pleased to see the Minister for Transport, Deputy Brennan, open the Knock – Claremorris bypass, but that is an oasis. It links Galway and Sligo and allows people to get through Mayo as quickly as possible. It is the only reason it was built as far as I can see. We hear about the terrible overrun in roads expenditure, but unfortunately it is not happening with our roads in Mayo. Despite this, we pay the same taxes. We deserve equality. How can we be expected to pay more taxes, as the Bill suggests we should, if there is no improvement in our roads? It is nonsensical. I do not blame the National Roads Authority, rather the Government which has failed to deliver to the west over the years which is why we have bad roads.

The open-ended contracts for the construction of roads mean the risk will be taken by the State with the consultants and designers paid on the basis of a percentage of the finished cost. That is economic madness and is at the cost of national and non-national roads in Mayo. The national development plan is a fraud where balanced regional development is concerned and is a fraud perpetrated on the people. The taxpayer must pay for the tune the piper plays. Unfortunately, we are the suckers.

Expenditure on the national roads programme is €16 billion and rising. Why not rationalise the programme and build roads that are not motorways but which allow plenty of room for passing? They would give some semblance of equality and would do wonders for tourism, balanced regional development and combating the urban sprawl in Dublin. There are many examples of such roads throughout the world. The national development plan motorway programme will compound the terrible over-population of the Pale. Why not develop an infrastructure that will serve the country?

I am aware of the situation regarding insurance costs where people pay above and beyond what others pay. I read about the terrible cost of insurance fraud. However, the real fraud is perpetrated on the people of the west by a Government that is not prepared to afford us equality in terms of balanced regional development to give us a chance to attract industry to allow people and graduates stay in their areas. We do not want our graduates to go to Dublin. We want to keep them in our area, but they are obliged to go because of the economic situation. We need a commitment to and deadlines from the Government for balanced regional development.

Mr. Ring

I am delighted to share my time with my colleague with whom I share a constituency.

This is the greatest country in the world for collecting taxes. The 12% increase in the Bill is massive and is not right in the current climate. I will give examples of how good we are at collecting taxes.

The clampers in Dublin sicken me. They are present around the clock to clamp people who do not have a ticket displayed on their cars or whose tickets have run out not more than five minutes before. A friend of mine, who came to Dublin at 8.15 a.m. one day to be at work at 8.30 a.m., was clamped because he did not have a ticket displayed and could not purchase one from the nearby machine because it was out of order. This person won the case. The question must be asked: where were the people to ensure the ticket machine was in working order? This country is becoming a dictatorship. The Government is arrogant and acts like a dictator.

We are great for taking money from people through taxes. Despite this, local authorities cannot afford to erect proper signage. If one wishes to find a hospital or road in Dublin city, one cannot find a sign pointing in the direction of it. Why are we against signs in this city and country? We are great for clamping, taxing and taking money from people.

On the issue of roads, if one comes into Dublin on the N5, one can travel legally at 70 miles per hour because it is a motorway. All of a sudden, it is reduced to 50 miles per hour. That is not right. What are the Minister and local authority doing to regularise this? How can a person be expected to go immediately from 70 to 50 miles per hour?

It is good that the Government has introduced penalty points, but I will give another example in this regard. The other day there was chaos on the M50 because the traffic lights were out of order. I turned off the motorway to find gardaí with a speed camera 200 yards down the road. I thought it was RTE at first but it was the Garda Síochána. No garda was on duty on the M50 to deal with the problems caused by the lack of traffic signals, yet 200 yards down a slip road, they were on duty with a speed camera. I do not imagine they caught many people speeding that evening because there was chaos on the road. People were not moving at more than five miles per hour. Why were these gardaí not on duty on the M50? They are great in Garda headquarters at identifying a car in any part of the city. Why did a message not go out from there to the two gardaí to sort out the traffic problems on the M50? It is all about collecting the euro from the poor, over-taxed consumer. It is not right.

I raise the issue of roads in the west, especially national primary and non-national roads. The road from Longford to Mayo is the greatest national scandal. People are expected to live and industry is expected to survive with it. Industrialists from the area, who met the Tánaiste before last Christmas, run many companies in County Mayo which employ thousands of people. Their exports go from Mayo to Dublin before being sent throughout the world. The greatest complaint they receive is that their goods are damaged. This is a problem for industry in the county and is simply because the road from Strokestown to Charlestown is a national disgrace.

It sickens me in that context to see the Government announcing additional funding for the National Roads Authority or, as a colleague of mine, Councillor Gerry Coyle, rightly calls it, the no roads at all authority. It is certainly a case of no roads for the west. We have had enough. It is not good enough. We cannot survive with it any longer. Goods cannot be transported into and out of the west. No funding could be found for the national primary route from Westport to Castlebar nor for the N26 from Foxford to Ballina. What is wrong with us? What does Fianna Fáil have against the west and Mayo? How are we to survive? The Government does not want people to live in rural areas.

The provisional licence regulations introduced by the Minister for Transport, Deputy Brennan, are another scam and way of collecting money. The Government is putting the cart before the horse on this issue. Let us take the example of people in rural areas who have never driven in a city, on a dual carriageway or negotiated a roundabout. They use their cars to enable them to pick up the pension on a Friday, to go to the doctor and to go to Mass on a Sunday. If they were going to Ballina or Castlebar, they would pay for public transport or take a taxi, but would not drive their cars. It is time the Government looked at a way of dealing with this and there is a very simple way. It will have to introduce a rural Ireland number plate, whereby these people could only drive in rural areas or towns and would not be able to drive in cities. Many of these people will never drive on a motorway or a dual carriageway. We are putting them out of business and it is not right.

If the Minister were serious about this he would have put this on the school curriculum. By third year in secondary school students should take the theory test. Before completing their leaving certificate, they should have completed their practical driving test. That would cost the State a few pounds. However, the attitude of the Government is that if it costs money it is no good. If it is taxation, it is great and it will pull the money out of people's pockets. The new driving test requirements have caused chaos in the west of Ireland and all over the country particularly for elderly people who have provisional licences but do not cause accidents. I am totally opposed to anybody who drives dangerously and am all in favour of lives being saved. However, there is a difference between that and attacking innocent people.

It is a bit like the way people can be caught on cameras. However, when my car was damaged and my phone was stolen in this city, there were not many gardaí or clampers around and nobody seemed to see anything. If I parked my car for ten minutes and failed to put my money in the box, it would be clamped and I would have to pay €80. There are more clamping cars in this city than there are taxis. It must be a great industry and I would love to know how it operates. They must get a percentage for every car they clamp. They remind me of the young lads who used to get the penny for an empty bottle. Every time the clampers clamp a car they must be getting more than a penny.

However, these clampers cannot see people breaking into, robbing and damaging cars. I left my car on Lower Mount Street to go into a pub. I was only out of the car for two minutes and when I returned, my windscreen was smashed and my mobile phone was taken. I asked a man selling papers if he saw anything and he told me that nobody sees anything in this city. If I left my car for five minutes more than it should be, there would be a clamper there and somebody would have seen it. How is it that with all the equipment in the Dublin Transportation Office, they could not see what was being done to my car? Why could they not have made a phone call to alert the Garda Síochána? However they can ring the clampers to tell them to be there in two seconds, before the car is gone. People do not mind paying their dues, but there are times when people get delayed in shops, visiting a doctor or at work and they are five minutes late. For somebody on low income €80 is a considerable amount of money.

What will the Government do about signage? What will the Government do about the daft speed limit signs? The speed limit on the national primary road approaching Mullingar is 60 miles per hour and all of a sudden there is a 30 miles per hour speed limit.

The national car test is another racket. Cars that are only two years old are now being tested. Modern cars are not like those 20 years ago. They all adhere to a very good European standard, but it is all about revenue for the Government. If we were half as good at repairing the roads it would be great. To get a pothole fixed takes about six weeks. Once the local authority has been informed, it has to find a worker to do it. I recently tabled a parliamentary question to find out how many engineers and workers were employed in my local authority. There are more engineers employed than ordinary workers. The first people to be let go are ordinary workers and not engineers.

The Minister has responsibility for cars. He used to be a very good MEP and was part of the European scene. When we first joined the EU we were told that a person buying a car in France, Germany or any European country could bring it into the country without having to pay tax, but yet we still have the VRT. Are we part of Europe or not? Why are we so good at introducing EU regulations when they cost the taxpayers? Why does the Minister not introduce a Bill to eliminate the VRT? I am told there is a test case already. Although we have a derogation from Europe, we should not have. A recent case involving another European country was lost and the Irish Government will also lose. I know the State is collecting significant revenue from VRT. Why are we so good at bringing in EU regulations when France, Germany and other countries ignore them?

I recently received a phone call from a constituent in the food business concerning EU regulations. Two years ago I was in France having my dinner when a dog came in, cocked his leg and nobody took any notice of him. Some 200 people from the food industry were recently at a meeting in Knock. The health inspector told them they were a danger and threat to the food chain here. We are gone EU regulations mad and have gone a step too far. People in business and other workers paying tax have had enough. They are up to their necks with government, regulations and diktat. I predict that 20,000 or 30,000 people will be on the streets of this city before too long because they cannot put up with any more regulations.

We are great for employing civil servants. Once they start their jobs they want to find ways to take a pound off the next man to pay for the jobs they have just got. It would be far cheaper to let people who are working continue to do so and have fewer civil servants. I am not talking about the civil servants here, but those in every local authority and health board. We have so many paper pushers that we will not have enough paper for them if we do not stop.

Cecilia Keaveney

I will not bash the Civil Service or the engineers who work for the councils because many of them do a very good job.

This is my first opportunity to welcome the Minister of State, Deputy Pat Gallagher, from my neighbouring constituency. I wish him well in his five years in office. It is good to see him back in the national arena. I agree with Deputy Ring that the Minister was an excellent MEP and was very good at communications. I am sure this will serve him well in his portfolio here. Introducing a Bill that will result in people paying more money for a facility is never a nice message to sell. However, if we can see the value of what is being done and that message is communicated, the increase is justified.

For the first time ever, I bought a new car this year and probably got caught by both increases.

Mr. Ring

What kind of car is it? Is it a Mercedes?

Cecilia Keaveney

I put my money where my mouth is and invested it directly in better provision for my own services in County Donegal. The primary purpose of the Bill is to give legislative effect to the increases in motor tax rates and trade plate licences provided for in the financial resolution on motor tax in the budget in December. The standard 12% across the board increase in motor tax for all classes of vehicles has already hit me personally. However, as the measure is for good reason, I agree with it.

The amendments to motor tax legislation designed to improve the administration of the system are welcome. During my day-to-day business, I receive an increasing number of e-mails, which I usually read within a reasonable period. If I could make the day longer, I would be able to read them even sooner. E-business is important for business and business transactions. The facility to pay motor tax on-line is also welcome.

The motor taxation offices established by the previous Government, which consisted of the same coalition partners as the current Government, have been important in increasing the ease with which people in my region pay motor tax. I welcome the fact that many of the offices moved to Donegal as part of the decentralisation process are now opening or have opened already. The motor tax office in Carndonagh, for example, has been a phenomenal success. At one stage it was handling 20% of all motor taxation in the county.

People appreciate being able to use a facility locally and anything that eases the process of paying motor taxation is welcome. I commend the Government for decentralising motor taxation offices as it has returned local government to the people to whom services must be brought. I also commend all those working in the local offices for whom the transfer from the centralised office to the new facility was traumatic. There appears to have been few teething problems and the change has been very successful.

As the chairperson of the Committee on Arts, Sport, Tourism, Community, Rural and Gaeltacht Affairs, I have a suggestion to make regarding the technical changes being extended to the national vehicle records held in Shannon. We have a serious problem both in my region and nationally with the phenomenon of cars being abandoned and burnt out by joyriders. Although it is handy for people in my constituency to say all such cars originate in Derry, I do not believe this to be the case. Cars which have perhaps failed the national car test or bought cheaply in another jurisdiction are being driven around by boy racers, who then set them on fire on roadsides and push them into hedges or fields. Often they are not even pushed off the road and present a hazard for unsuspecting drivers who may come around a corner.

It seems all car records are held in Shannon. When a person is finished with a car, he or she is supposed to fill in and return a form to the vehicle registration unit detailing what has happened to the car, for instance, whether it has been scrapped or sold on. Is this not a roundabout approach to the issue? Is it not possible to provide for a mechanism in the legislation which would ensure such information is quickly shared with local authorities? For example, the unit could provide the local authorities with information on cars which have not been taxed in a particular year or about which no information has been received, which could then appear on the computer system of the authority in question. The Garda and the owner of the car could then be notified and genuine owners could clarify what happened to the car. People who have sold the car on for less positive uses could and should be pursued and an example made of them.

The problem of abandoned cars could result in serious accidents involving not only joyriders, but also unsuspecting families who may drive around a bend and crash into a burning car on the side of the road. We should consider the possibility of improving the information available to the vehicle registration unit in Shannon and giving the Garda and local authorities access to it.

Will the Minister indicate whether it is envisaged to reinstate the scrappage scheme? I understand this was a successful scheme. If this is the case, why was it withdrawn? Under the national car test, cars can be deemed to be of no use. Under the old scheme, one received £1,000 or £2,000 to scrap one's car which meant people had some extra money to buy a better quality car. It also offered a way of ensuring cars at the end of their shelf life were kept in a controlled environment. We need a mechanism for providing information on the whereabouts of such cars which would allow them to be dealt with properly.

Recently, at local authority level, the question was raised as to the number of facilities for scrapping cars available nationally and the value to a dealer of providing such facilities for a local authority. The question was also asked as to whether local authorities should receive capital grants from the Department of the Environment and Local Government for establishing scrappage facilities. We have some excellent facilities for waste disposal in Carndonagh, where the central office is located, and we hope to establish a similar facility in Buncrana. We need to address this serious issue and the vehicle registration unit in Shannon should play a role in this.

I return to spending increases. There has been a huge increase in funding for the national primary roads on which significant sums are now being spent. I have gripes about the fact that the national development plan does not make provision for the N2-A5 to be brought up to motorway standard. However, I am aware of sums of money being spent in this area. I welcome the decision to proceed with the bypasses at Carrickmacross and Castleblayney. It is important we continue to improve access.

There is insufficient co-operation between Departments. The Departments of the Environment and Local Government and Transport should maximise co-operation in areas in which they can provide mutual assistance. In the context of the N2-A5, a joint effort between the Departments here and either the Secretary of State for Northern Ireland, the relevant British Minister or a local Minister once the Executive is up and running again which will, I hope, be in the near future, will yield improvements. Much of the road has significantly improved since I started to use it several years ago. The problems with it are now almost exclusively confined to the North. I have worked on a cross-Border group with my northern colleagues from most parties and we also met Peter Robinson on the issue. Although the problem has been recognised, it must also be recognised that a solution needs to be sought and found.

On the national primary roads, which are not specifically addressed in the Bill, it was indicated to us that because it was a tight year, counties such as Donegal might have major difficulties in terms of receiving allocations. Prior to the recent announcement by the National Roads Authority the indications emanating from it were that roads in County Donegal would not receive a significant allocation. When we met the NRA we were desperate to receive €9 million to enable us to keep the show on the road, as it were. As it was a tight year, we wondered if we would receive it. In the end, we received in the region of €13.5 million.

Other speakers claim money is not being spent and list areas to which it is not being allocated. Money has been made available and is being spent. While I will have rows with the NRA as to where it is spent and how much my county receives, nevertheless we received more than we had anticipated. I welcome the increase.

National primary roads do not impact on my part of the constituency because we do not have national primary routes and have just one small section of national secondary road. I hope major safety improvements can be made at Newtowncunningham to allow pedestrians to cross this very busy road. More forward planning is required. We need to allocate funds to long stretches of road rather than making allocations in a piecemeal fashion.

Despite concerns that County Donegal would not receive funds, it received a welcome allocation to cover the main roads. A total of €300,000 was allocated for the Moville Road, €300,000 for the Carndonagh bypass, €300,000 to start the inner relief road in Buncrana and €300,000 for the main Bridgend to Buncrana Road.

Some years ago Donegal lost its LAS moneys on the basis that they were being spent in a piecemeal fashion. That funding was subsequently regained after considerable discussion with the then Minister of State, the former Deputy Molloy. Councillors are always being told not to spend on a piecemeal basis and it is satisfying to spend some money in, say, four areas in one year but we would be better off putting a few million euro towards finishing those roads instead of spending money on repairing them year after year. By the time the people get on site, the €300,000 is almost gone. With a good cash injection in a particular year many of these roads could be removed from the work programme. In the past certain roads lasted 20 or 25 years and perhaps that could be examined on a bigger scale.

An announcement was made today about the LAS, and I welcome the €11 million allocation for Donegal. Eight years ago, when I was a councillor, the LAS money we received was so insignificant that works were carried out on only a small number of roads and most roads were left untouched. In the recent past, LAS money has been of major benefit to the county and the additional CLÁR funding that we have acquired will be of even more benefit. The devil might be in the detail of that but the CLÁR funding for non-national roads and LAS type moneys will be of major benefit to our own region. In that regard I thank the Minister of State, Deputy Ó Cuív, who is the Minister responsible for rural development.

I spoke on the need for co-operation between the Department of the Environment and Local Government and the Department of Transport but there should also be co-operation with the Department of Communications, Marine and Natural Resources because the problem of coastal erosion is often associated with coastal roads. Dealing with the problem of coastal erosion could be more imaginative in terms of how the moneys are spent and the way the people involved do this work. A long time ago I spoke to people who talked about using a CE type scheme to make the coastal erosion moneys go further. However, much more could be done to address this problem in terms of co-operation between the Departments.

I agree with earlier speakers who referred to discretionary maintenance. There has been a decline in the amount of discretionary maintenance given to councils as a result of the funding being channelled in a different way. Discretionary maintenance is important for local engineers in that issues that arise through the year are not always pre-planned and there must be a level of discretion applied to moneys that come in.

There is an ongoing row about freedom of information and there is a drive towards openness, accountability and transparency. It has reached a stage where everyone is trying so hard to account for the moneys they have been allocated that the discretion applied in the case of what may be a very good project can be lost. In some instances we are cutting off our nose to spite our face.

In my own area there have been town and village renewals as a result of money allocated from the PEACE initiative. Incredibly, small villages have come alive to the idea of doing something for themselves but when they ask the council engineer for additional funding to carry out more work, he or she is tied by the five year programme. The idea of local and voluntary groups coming together to work with the county council is being stymied by the lack of discretionary moneys. I am not saying engineers should be given vast amounts of money to do with it what they wish but many good projects are being put on the long finger. At the start of a five year programme one cannot be sure about the type of projects that will evolve. There should be some leeway and more discussion with the council engineers in that regard.

Very little is being done about "sioc" cleaning, as it is called in our area. Roads are constantly being torn up having only been resurfaced because the sides of the roads were not ledged and the "siocs" were not cleared. If the initial water problem is not addressed, it does not matter how much tar is put on a road the job will not be successful. It should be compulsory for roadworks to involve the cleaning of the verges on the sides of roads, which is a basic requirement. That work used to be done by council workmen but they are fewer in number now. This is a basic complaint in my own region but it is a serious one which is worthy of examination.

I commend the people involved in the low cost accident measures. This is an area to which we should try to allocate as much funding as possible. Sometimes a little money goes a long way in these situations. Rumble strips have been placed on the roads in an area just outside Malin, on the way to Glengad, to try to warn people of the dangers and speed limit signs of 25 miles per hour have been put up. They are trying everything to deal with the problem of speed on that road but if the height of the incline was reduced and the resultant material used to fill in the hollow, the problem would be solved. Unfortunately, commonsense solutions have to go through many hoops but if, God forbid, there was a fatality in any of these areas the money would be found and the work would be done.

An issue that causes me extreme annoyance is the disparity between the prices of petrol and diesel. A Deputy spoke about this earlier and he mentioned a disparity of between six and seven cent. I do a lot of driving and pass many petrol stations. I can tell the House there are disparities of 12 and 13 cent, and even more. It is time that someone examined this issue. I do not know if we need consumer legislation but I would like someone to explain the reason for a difference of five, six, seven or even eight cent in these prices in a small peninsula such as mine. The figure nationally is between 12 and 15 cent.

Rural transport initiatives should continue. Another area we have difficulty getting funding for is footpaths and car parks. It is easy to say the money should be taken out of the local fund but perhaps following this increase Donegal County Council will get considerably more money to deal with these.

The council has been imaginative in trying to solve its problems, whether in regard to employment or environment initiatives. It has been progressive in many respects and I commend the workers involved. There is much to be done, however, and I would like to ensure that we get the best possible advantages for our own area. I wish the Minister well. I presume he will work well with the Minister of State at the Department of Transport, Deputy McDaid. They may have a national portfolio but Donegal will gain from having two Ministers of State in Government.

Minister of State at the Department of the Environment and Local Government (Mr. Gallagher)

I thank all Deputies who participated in this debate. It goes without saying that any proposals to increase taxes will generate lively and good debate, and we had a lot of that here this evening. I would point out, however, that we are dealing specifically with non-national roads. Many questions were raised that are more appropriate for the Minister for Finance, the Minister for Justice, Equality and Law Reform, the Revenue Commissioners or the Minister for Transport. I will try to deal with the questions to the Department of the Environment and Local Government in the limited time available to me. If Deputies want me to convey their views to other Ministers I will be happy to do so.

I said earlier that 60% of the national fleet of cars are under 1,400 cc so the extra annual cost to most motorists will be from €15 to €30, between 29c to 58c per week, or 2.8c to 4.1c per day.

I cannot listen to this debate without referring to the past and there are Deputies present who have been in Cabinet. Decisions such as these are not taken lightly and I assure the House that the proposals in the Bill were not drawn up lightly. They were drawn up because it was the right thing to do to support our local government system and to maintain and improve our non-national road network. I underline that the local government fund is not used for national roads, which seems to be the perception among some Deputies. The fund is specifically for non-national roads.

Deputy Morgan and others can rest assured that the motor tax will not be diverted to the Minister for Finance. It is ring-fenced by the legislation, which states clearly that it goes to the local government fund. The Department of the Environment and Local Government keeps the local government fund account in a bank in Dublin, where it accrues approximately €2 million in interest each year. It is critical to underline that motor tax, unlike other taxes, is not paid into the Exchequer. That should be abundantly clear.

This is not a budgetary issue. It was the rainbow coalition which laid the groundwork for this measure when it decided to divert motor tax from the Exchequer into the equalisation fund, assigning it to local government.

Mr. Gilmore

It was a good decision. The Government has not kept it up.

Mr. Gallagher

We will deal with that. When that administration introduced the measure in 1997 it also took the opportunity to make provision to allow local authorities to increase motor tax rates above and beyond levels set centrally. That was the decision taken by the Government of the time. This Bill is all about ensuring local government is well resourced to perform its functions and to provide good local services across a range of areas, contributing to national, local and community development.

In 1997 the total allocation for non-national roads was €214 million. Contrast that with this year's allocation, €434 million. I was amused by Deputy Crawford, whose memory goes back to 1999 and 2000. I will take him back to 1997, when the allocation to Monaghan County Council was €7.5 million. Contrast that with this year's allocation, €12.97 million, an increase of 72%. That is a realistic increase.

Mr. Allen

It must be inflation.

Mr. Gallagher

It is an increase of 72% and the Deputy knows full well that the inflation over those years was a great deal lower than that.

Mr. Gilmore

What is the increase in car registrations?

Mr. Gallagher

It is about 12%.

Mr. Gilmore

It is more.

Mr. Gallagher

No, I have given the exact figure.

Acting Chairman

Members should speak through the Chair.

Mr. Gilmore

It is more. It is 40%.

Mr. Gallagher

Certainly not.

Mr. Gilmore

That is according to statistics from the Minister of State's Department.

Mr. Gallagher

No. One does not have to serve on a local authority to understand that those authorities have their own resources.

Mr. Gilmore

Very little.

Mr. Gallagher

Some Deputies were very critical but overlooked the fact that some counties have reduced their allocation on national roads from their own resources. That point should be made.

Mr. Allen

Why?

Mr. Gallagher

In 2003, despite difficult economic conditions, the fund has continued to provide a buoyant source of funding for local authorities. Deputy Gilmore suggested there was no increase in grants to local authorities in 2003 for their day to day needs. That is not true.

Mr. Gilmore

It is 2%.

Mr. Gallagher

This year €662 million has been allocated in general purpose grants for local authorities, which represents an average increase of 6% over the 2002 allocation—

Mr. Gilmore

The local government fund allocation includes capital—

Mr. Gallagher

—and in some cases it is 85% higher than the corresponding allocation in 1997. I am confident this level of general purpose funding from the local government fund, together with funding from local sources, is appropriate to meet the reasonable costs of local authority services this year. Since the 1998 Act came into force the local government fund has been the primary source of funding for non-national roads. This Bill is all about continuing the development of a good national roads system and is a key part of the national development plan. There is a commitment to promoting balanced regional development, social inclusion and rural development.

Regarding the non-national roads, the NDP is committed to expenditure of €2.43 billion to that network from 2000 to 2006. That comprises €1.08 in the BMW region and €1.35 billion in the southeast. There had to be positive discrimination as those regions have to catch up and expenditure in both areas is well ahead of the profile for the period January 2000 to December 2002. Actual expenditure in the BMW region of nearly €494 million took place against a profile figure of €458 million, while in the southeast actual expenditure was €677 million, in comparison with a profile figure of €580 million. Total expenditure in the 2000 to 2002 period was €1.17 billion, as against a profile figure of €1.038 billion. This is almost 13% ahead of the profile. The non-national road allocation announced in January this year provides for expenditure of €171.6 million in the BMW region and €247.3 million in the southeast. There is positive discrimination—

Mr. McCormack

What is the total?

Mr. Gallagher

Add up the two. There are many Members who were extremely critical of the funding going to the BMW region, saying it was not enough. They and their parties were totally opposed to regionalisation and positive discrimination.

Mr. McCormack

No, no. We led the campaign.

Mr. Gallagher

They were totally opposed to positive discrimination when it came to the case made to EUROSTAT. I know because I was deeply involved. I had many calls from Deputy McCormack's councillors which applauded our efforts and were critical of the Deputy's efforts.

Mr. McCormack

Not at all.

Mr. Gallagher

That is the fact. Tá an fhírinne searbh. In 2002 non-national road allocations will amount to almost €434 million.

Mr. McCormack

And 2003?

Acting Chairman

The Minister of State is being provocative in his attitude.

Mr. Gallagher

Is stating the facts provocative? I am here to state the facts and to be totally honest. The Chair will have to guide me in how to address this. I came in here to state the facts. Does the Deputy not want me to give them?

Mr. Allen

They are warped.

Mr. Gallagher

I will repeat for Deputy McCormack—

Mr. Allen

Why does the Minister of State not talk about policy?

Mr. Gallagher

That is the problem. The Opposition wants to forget 1997. It wants to forget the period from 1982 until 1986 when a Fine Gael led Government—

Mr. Allen

When Fianna Fáil had bankrupted the country. "Tighten the belt" said Charlie while he was living off the fat of the land.

Mr. Gallagher

Fine Gael did not tighten its belt between 1982 and 1987 when it increased the national debt from £12 billion to £25 billion.

Mr. Gilmore

That was 20 years ago.

Mr. Gallagher

It is a fact.

Mr. Gilmore

We could pick any year out of the air.

Mr. Gallagher

What did Fine Gael achieve?

Mr. Gilmore

Why not pick 1947?

Mr. Gallagher

The Deputies have to be reminded that the total expenditure on non-national roads was €214 million in 1997 compared with €443 million this year.

Mr. Allen

It is like listening to a broken record. It was the same last night.

Mr. Gallagher

Deputy Harkin asked about VRT on vehicles used by disabled drivers. That is not my brief but I appreciate the case she made. I made a submission myself to the former Minister of State, Deputy Mary Wallace.

Mr. Allen

The Deputy is in the Department now.

Mr. Gallagher

Which Department? I do not have time to explain to Deputy Allen that the Department of the Environment and Local Government does not have responsibility for that area.

Mr. Allen

The Deputy is in Government now.

Mr. Gallagher

The case has been made and it is a matter now for the Minister for Finance.

Mr. Allen

The Deputy is a Minister in the Government.

Mr. Gallagher

If the report on disabled drivers results in a widening of the tax reliefs from VAT and VRT for disabled drivers, the House can be sure that neither my Department nor I will object. If there is a knock on effect, we will deal with it then.

Mr. McCormack

It is three years since the review group was set up.

Mr. Gallagher

Deputy Allen referred to the possibility of introducing a motor tax regime based on carbon dioxide emissions. He looked at the British example. The Department is examining ways to relate car tax to emissions. It will look at equity, real emissions and reduction in revenue safeguards. We cannot compare this State with Britain because from March 2001 the vehicle excise duties for new cars have been determined by their CO2 emission figures and the fuel used. There are five bands with three rates in each, the lowest rate being for alternative fuel cars. Britain has only one rate for private cars and light goods vehicles while we have 22. The change to a carbon dioxide basis was, therefore, easy for the British but the Department is examining the relation of car tax to emissions.

Deputies Finian McGrath and Crowe spoke about local government funding. The arrangements introduced through the fund have served local authorities well. The Government is committed to ensuring local authorities have sufficient funding to provide quality services. Deputy O'Connor suggested the Department should carry out a value for money study. I indicated in my opening address that an independent evaluation was carried out by Fitzpatrick Associates Economic Consultants and that company stated we are getting value for money.

Deputy McCormack asked about progress with the on-line motor tax project and its funding. The Department received funding to set up the on-line system from the Information Society that is administered by the Department of the Taoiseach. The system should be introduced on a pilot basis in some areas by the middle of the year and rolled out by the end of the year. There will be no extra staff required by local authorities. The opposite will be the case, local authorities will not have to process business at the counter, saving time and money. The cost of an on-line transaction will be 15 cent.

Deputy Devins referred to the delays with insurance certificates. That is a matter for the Ministers for Transport and Enterprise, Trade and Employment. When payment is made, there should be no reason for any delay in issuing the certificates.

Deputy Ring mentioned VRT. That is a matter for the Minister for Finance and it formed part of the Finance Bill which was discussed in the House in recent weeks. Deputies Cowley and Ring referred to the situation in the west. I draw their attention to the fact that in 1997, €10.5 million was allocated there and that has now been increased to €19 million.

Deputy Keaveney referred to the announcement I made today of an allocation of €11 million for the local improvements scheme. This is an important scheme and I am pleased that improvements will be made on the basis of need, with the areas with most applications and the greatest need receiving the highest allocation on a national basis. The same system will then work with local electoral areas.

There is a commitment in the national development plan to provide €25 million over a five year period for regional signage in each county. This year we have taken the first step by providing €5.1 million to provide signage in Counties Donegal, Sligo, Galway, Kerry and Wexford.

The end of life vehicle recovery scheme was mentioned. The Government has agreed proposals put forward by the Minister for the Environment and Local Government on this issue. The motor vehicle and metal recyclers' associations have taken the lead in developing the scheme. The Government has agreed that it should proceed and the necessary legal provisions will be added to the Protection of the Environment Bill that is currently before the Seanad.

Deputy Gilmore referred to class three roads and asked why there was no funding last year. He has raised this on a number of occasions and it is an important issue for those involved but it is also marginal when one considers that class three grants amounted to €6 million when last allocated in 2001 and his own local authority, Dún Laoghaire-Rathdown, received €127,000 at that time. The tertiary road grants were paid for the first time in 1997 and additional funding was also provided for this purpose. No such funding was provided in 1998 or 2002 while funding for class three roads was made available in 1999, 2000 and 2001. In each of those years €6.1 million was allocated in the middle of the year – the allocations came about after mid-year expenditure reviews.

Savings were identified in a number of schemes in which progress was slower than anticipated as a result of delay in land acquisition and the class three allocations were reallocations. I acknowledge the importance of those roads and the necessity to have work carried out on them. The money involved was as a result of reallocations in other years but, unfortunately, that does not apply at present. It is a matter which I intend to look at with Department officials at some stage.

Question put and declared carried.