John Gormley
Question:12 Mr. Gormley asked the Minister for Finance the reason he is not honouring his commitment to introduce a carbon tax as promised by him in the budget for 2003. [30072/03]
Other Questions. - Tax Code.
I remind the Deputy of what precisely I said on the subject in my 2003 budget speech. I stated that: "the Government has asked the relevant Departments to advance the plans for a general carbon energy tax, with a view to introducing this from the end of 2004". Given the many implications of such a tax, both environmental and economic, I said that there would be full consultations with interested parties on the design of the tax.
As the Deputy will be aware, I subsequently published a carbon energy tax consultation paper on 31 July of this year which was designed to facilitate discussions on the introduction and design of the tax while recognising that there are divergent views on the issue. Submissions in response to the paper were invited from interested parties to be received by 30 September 2003. Relevant Oireachtas joint committees also considered the paper.
To date, 116 submissions have been received and the views in the submissions are divided in support of or concerned about the implications of such a tax. The submissions raised diverse concerns such as competitiveness, the impact on employment, the less well-off and rural areas, cross-Border aspects, the scope of the tax, the link with emissions trading, the role of negotiated agreements and alternative energy, the need for revenue recycling and how that should be applied. I propose to publish these submissions on my Department's website in the new year. The consultation process will inform the development of proposals for further consideration by the Government.
The Minister will be aware that his predecessor first mentioned this tax in his 1996 Budget Statement with the establishment of an environmental taxation group. The Minister referred to it in his 1997 budget, went into greater detail about it in his 1998 budget and has referred to it in every budget since then. Last year, the Minister stated that he had a view to introducing the tax in 2004.
I said from the end of 2004.
I will come to that in a minute. The Minister was clear in his statements that the introduction of this tax could be used to reduce tax in other areas such as labour. He asked for the submissions on 31 July and received them by 30 September. This is an ongoing consultation process which has taken eight years and precedes the Minister in office. The Minister neither likes nor wants this tax. That he did not include one reference to it in his budget speech last week indicates to many on this side of the House that he does not want to introduce this tax.
The number of submissions we have received proves that there are divergent opinions in this area. There are implications for competitiveness and the less well-off. To take the position of the Deputy and his party is grandiose. There are practicalities to be addressed in this area before we proceed.
It has been eight years.
This is evidenced by the number of submissions we received. We published our own documents on the matter, which will be considered further by the Government. It will be looked at in the coming months and we will publish the submissions we received. We will then make a decision. However, it is not, contrary to what the Deputy appears to be indicating, a case of giving a simple yes or no answer. It would be great if Ministers for Finance could make decisions on that basis. However, this is a complicated area in respect of which there are far-reaching implications for Irish individuals and businesses.
The Minister was able to make such decisions in other areas.
The Government will have to take all considerations into account before reaching a final conclusion.
The Minister will understand why Members on this side of the House are concerned that another "Parlon country" style decision will be made in respect of this matter and that they will thereby be prevented from making a serious contribution to the debate. I ask the Minister to engage with us on this serious matter.
What is the Minister's view on the effectiveness of the carbon tax? The Department of the Environment, Heritage and Local Government has indicated that while we are 20% over target, the implementation of a carbon tax will only reduce greenhouse gases by 1.4%. It will, therefore, make only a small dent in the problem. What is the Minister's view on the position of the US which, effectively, has opted out of Kyoto? How will this impact on the operation in Ireland of a carbon tax and how can we mitigate against it? What is the Minister's opinion on giving large, free rations to big energy users while, under many of the proposals, small businesses will be obliged to pay the full carbon tax? Is such a position equitable? I desire some serious discussion on these issues.
The Deputy has just outlined some of the major difficulties that exist in this area. Such difficulties must be given further consideration and I would welcome contributions from the Deputy and other Members in respect of this complex matter.
Will the Minister indicate his views?
I will give my views when the Government reaches its final decision.
Will the Minister not indicate what they are? He should lead the debate.
Is there any chance that a coherent approach to this matter will be taken by the Departments involved? The Department of the Environment, Heritage and Local Government seems to be of the opinion that it is important to adhere to our Kyoto commitments. The Department of Enterprise, Trade and Employment seems broadly opposed to Kyoto and is taking the US line. The Minister has just stated that he is involved in consultations but he said the same thing in respect of decentralisation, a matter which he proceeded to ignore until earlier today when he indicated his pride about the new programme.
Has a risk profile been carried out regarding the impact on our economy if we do not respect some of our obligations? Has the Minister received the submission of the Combat Poverty Agency regarding the impact of such a tax, unless it was very well structured, on poor and low income families which use certain types of fuel, particularly coal and briquettes, and which would be heavily penalised under any move to reduce emissions? What is the Minister's current thinking on this matter and does he have a coherent policy in respect of it?
What is the current thinking of the Labour Party? Is it for or against it?
The Minister will not even answer that question on his own behalf.
We ask the questions and the Minister is meant to answer them.
Is the Labour Party for or against it? What is the position of Deputy Richard Bruton's party?
(Interruptions).
Perhaps the Minister could arrange a debate on the matter and we can air our views.
At least I know where the Green Party stands. It is in favour of it.
(Interruptions).
We would welcome a debate.
Combat Poverty Agency is one of the 116 persons or groups that have made submissions on this matter. There are differing views on this issue. I cannot obtain an answer from Deputy Burton as to whether her party is in favour of it.
We should have a debate on it.
We could debate it at any time before the relevant committee and we would be glad to hear Members' views. The Government and I have to take all these matters into accounts. I am aware that, as Minister for Finance, I will be obliged to introduce a carbon tax if it is approved. Does the Labour Party favour such a tax?
The Minister is being asked questions and it is his job to answer them.
What about the Minister of State, Deputy Parlon? What is his position?
I never pontificate or state that we want to take the high moral ground and neither, for that matter, does Deputy Durkan's party. However, Deputy Burton's party wants to live on the high moral ground. In this era of openness, transparency and accountability, will she indicate her party's clear position? Does the Labour Party favour the introduction of an energy tax?
The Minister should give us his view.
So we do not know what is the position of the Labour Party. The members of that party, who are the doyens of openness, have not made up their minds.
An Leas-Cheann Comhairle:
That concludes questions for today.
It is just as well.
Written Answers follow Adjournment Debate.