Local Government (Household Charge) Bill 2011 [Seanad]: Second Stage

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

The Local Government (Household Charge) Bill's purpose is to give effect to the EU-IMF programme of financial support commitment to introduce a property tax for 2012. The programme reflects the need, in the context of the State's overall financial position, to put the funding of locally delivered services on a sound financial footing, improve accountability and better align the cost of providing services with the demand for such services.

However, in light of the complex issues involved, a property tax requiring a comprehensive property valuation system would take time to introduce and, accordingly, to meet the requirements in the EU-IMF programme, the Government decided to introduce a household charge in 2012. The household charge is an interim measure and proposals for a full property tax will be a matter for consideration by the Government in due course.

The Bill is a relatively short and straightforward legislative instrument. Essentially, the majority of residential property owners in the State will be liable to pay an annual charge of €100. Liability arises each year on a point in time basis. It is expected to raise some €160 million on full collection and the revenues from the charge will support the provision of vital services provided by local authorities in our communities. Internationally, local services are administered by local authorities and financed by local service charges. In Ireland, local authorities are responsible for, among other services, fire and emergency services, maintenance and cleaning of streets, street lighting, planning and development services, public parks, libraries, open spaces and leisure facilities, etc. These essential local services benefit all members of the public, including business.

In common with all levels of government, the financial position of local authorities remains under significant pressure. At the same time, as part of the efforts to close the gap between income and expenditure in the public finances, Exchequer funding of the day-to-day activities of local authorities cannot be immune and, accordingly, the 2012 Exchequer allocation to local government has been reduced by €164 million compared to 2011. The introduction of the household charge in 2012 is, therefore, critical to ensuring that local authorities have the necessary resources to deliver services to their communities at close to existing levels in the coming year.

We had a helpful and constructive debate in the Seanad on the Bill last week and it is fair to say that most of the discussion revolved around the exemptions and waivers from the household charge. In the main, Senators advocated additional provisions to exempt more owners and properties from its scope. I am satisfied that the current provisions in the Bill for exemptions and waivers are sufficiently broad and will exclude those households in particular difficulties from the ambit of the charge. The provision of additional exemptions from taxation measures could give rise to a domino effect. Providing an additional exemption from the charge may seem entirely reasonable in itself but it could give rise to pressure for more exemptions catering for circumstances different, but not wholly dissimilar, from the original one. There could be a tendency for calls to be made for an incremental extension of exemptions to a point where the revenue stream from the charge starts to be eroded significantly. The broad applicability of the household charge has allowed us to set it at the lowest possible level for 2012 at €100. The inclusion of further exemptions or waivers would require a corresponding increase in the level of the charge and would disadvantage those households remaining liable for the charge.

The Minister is fooling nobody.

Senators also pointed to the provisions in the Bill which enable the level of the charge to be increased in line with changes in the consumer price index, CPI, in the future. I stress that this provision would only allow for minimal changes in the level of the charge and it is also included in the Local Government (Charges) Act 2009. Any significant change in the quantum of the charge will require primary legislation and cannot be increased without further reference to the Oireachtas. I would also point out again that the household charge is an interim measure and will be replaced by a full valuation-based property tax in due course.

The charge will be administered on a self-assessment basis and is to a significant extent based on those arrangements applying to the non-principal private residence, NPPR, charge introduced under the Local Government (Charges) Act 2009. It will be a matter for owners of residential property concerned to register and pay the charge. It is intended that the liability date will be 1 January, with payment due by the end of March for those not opting to pay by instalments. This liability date was chosen due to its fit with the overall annual financial cycle of local authorities and will allow moneys collected to be expended by authorities in the year collected. It also provides clarity as to ownership on the liability date as there are likely to be very few, if any, property transactions on New Year's Day.

I wish to make clear that the liability date of 1 January is the date upon which persons will have to assess whether, as an owner of a residential property, they are in fact liable to pay the household charge. The payment of the household charge can be made from this liability date up to and including 31 March 2012.

That is a nice New Year's Day present for them.

Persons will have a full three months from the liability date to pay the household charge.

Significant efforts will be made to ensure that property owners are aware of the household charge and the liability and payment dates. My Department and local authorities will undertake a national information campaign to advise people of the charge and their responsibilities in regard to payment. A similar and successful advertising and information campaign was undertaken in the context of the NPPR charge in 2009. I am confident that those liable to the charge will be aware of their obligation to discharge their liability for the charge by 31 March 2012 and, thereby, avoid late payment fees or late payment interest.

There will be a major boycott of it.

That is up to the Deputy if he wants to break the law.

No, it is not up to me; it is up to the people. The Minister is imposing a draconian fine of €2,500 to try to coerce them. He has not gone into that at all.

The Minister has the floor.

The Deputy is getting a little excited about the charge and he is working hard on it.

It has not even started yet.

Late payment fees and late payment interest will only apply if the household charge is not paid in respect of a liable property by or on the due date of 31 March. These are similar provisions to those that apply under Revenue legislation in respect of the late filing and payment of certain taxes and will act as an incentive for persons to pay the self-assessment household charge on time. Any household charges, late payment fees and late payment penalties will remain as a charge against the property concerned.

The Government recognises that the charge represents an additional cost for home owners and it is proposed to facilitate them by allowing it to be paid by direct debit in four equal instalments of €25. I will set out in regulations the dates by which each instalment will fall due and the arrangements for the payment of the instalments.

Similar to the €200 charge on NPPRs, an online system is being developed by the Local Government Management Agency, LGMA, to enable home owners pay the household charge over the internet by credit or debit card. In addition, home owners will be able to make payments by cheque and postal order through the post to the LGMA. A bureau will be put in place in the agency to administer the charge on a shared service-agency basis for all local authorities.

It is recognised that the existing revenue base of local authorities is narrow by international standards. This was a consideration in the introduction of the NPPR charge in 2009. While the charge represents a dedicated source of funding for local authorities, which is relatively stable, it does not go far enough in addressing the imbalance in the sector's financing. A proper broadening of the revenue base for local government will come about as a result of the introduction of the household charge. This measure is significant because it recognises that local authorities should not be disproportionately dependent on central government funding.

The proceeds of the household charge will be paid directly into the local government fund. As Minister for the Environment, Community and Local Government with responsibility for the management of the fund, I will disburse moneys back to local authorities in general-purpose grants. It is considered that this approach is preferable to allowing local authorities to directly retain moneys collected from the household charge in their areas. It will make it possible to introduce equalisation into its distribution, ensuring local authorities with higher populations than others do not benefit unduly as a result.

The Government proposes that a small number of exemptions to the household charge will apply. The proposed exemptions are properties that are part of the trading stock of a business and have not been sold, occupied or been the source of any income since their construction; properties vested in local authorities or voluntary and co-operative housing bodies for social housing, as making such properties liable would lead to a circular flow of income and be unnecessarily bureaucratic; properties owned by a Government or the HSE and used or let in the performance of their functions, as making such properties liable would lead to unnecessary circular administrative structures; properties to which commercial rates apply — as with the second house charge, it is intended that this charge would operate as an alternative to commercial rates, that is, a property will be liable for either commercial rates or the household charge if it is domestic property, but not both; where a person is forced to vacate a property because of long-term mental or physical infirmity — this exemption was included in the Local Government (Charges) Act 2009 as a compassionate measure intended to provide for elderly people who have no choice but to move out of their sole or main residence into a residential nursing home; and where a charity owns a property.

In addition to these exemptions, two important waivers will apply to the charge. The programme for Government commits to giving consideration, in the context of introducing a property tax, to the impact that such a tax would have on the number of households in mortgage distress. The Government, therefore, proposes to exclude from the charge households in receipt of mortgage interest supplement from the Department of Social Protection. Mortgage interest supplement provides short-term support to help eligible households pay mortgage interest payments. In excess of 18,000 households will benefit from this waiver. The Government also intends providing a waiver for households in certain categories of unfinished housing estates. The report of the advisory group on unfinished estates identified two categories of households in particular difficulty: category 3, comprising 1,112 estates, where a developer is in place but there is no on-site activity and where there are significant planning, building control compliance and public safety issues to be addressed; and category 4, comprising 188 estates, where the developer or site owner is not contactable and-or where no receiver has been appointed and serious public safety problems similar to category 3 exist.

I will set out the estates to which the waiver will apply in regulations. These regulations will be informed by local authority returns to the Department from the 2011 national survey of unfinished housing estates. The Government's priority is to address the needs of these estates as quickly as possible but, in the interim, this waiver will benefit such residents as they work with other stakeholders in developing resolutions for these problematic developments. The costs of this waiver will abate over time as the issues in these estates are resolved and property owners become liable for the charge.

During the Bill's passage through the other House, a number of amendments were put forward, proposing to exempt various additional categories of properties and persons from the charge, including affordable housing, those who had paid stamp duty in the housing boom period and persons in receipt of the numerous welfare payments from the Department of Social Protection. These proposals would have the potential to severely reduce the amount collectable from the charge, would significantly increase the administrative burden and costs associated with the charge and would be inconsistent with the need to introduce a new broadly based revenue stream of funding, which is vital for local government services.

While I accept the introduction of the charge is an additional cost to households, the exemptions and waivers provided in the Bill, added to the provisions for instalment arrangements, in my view, provide a comprehensive response to those in particular need. I would also point out to Deputies that expanding the number of exemptions would leave no option but to increase the charge for others in order to raise the revenue necessary to adequately resource local government.

I consider it important to reiterate that those households that have no liability for the charge include: tenants in private rented accommodation for any lease or tenancy under a term of 20 years; tenants in local authority housing; tenants in receipt of supplementary welfare allowance rent supplement from the Department of Social Protection; households that are purchasing their homes under the shared ownership scheme, where the local authority still retains an ownership stake; tenants and-or those living in housing provided by voluntary and co-operative bodies and charities; those living in housing vested in the HSE or a Minister of the Government; those home owners who have been forced to vacate their property by reason of long-term mental or physical infirmity and who are now living in a property which they do not themselves own; those households in receipt of mortgage interest supplement; home owners residing in certain unfinished housing estates; and those residing in property owned by charities or discretionary trusts. I am confident, therefore, the Bill provides a reasonable level of protection for those in greatest need in our communities.

Concerns were also raised in the Seanad on the issue of bedsits and liability to the household charge. While the charge does apply to such properties, I must stress again that it is the owners of bedsits who will be liable, not the tenants.

Is there with a problem with socialism that the Deputy——

Does the Minister think the landlords will not pass it on to the tenants?

The debate is going very well. Let us continue.

The Bill contains 20 sections and is a relatively straightforward piece of legislation, which will be easy for Deputy Higgins to understand. Essentially, owners of liable residential property will be required to pay to the Local Government Management Agency an annual charge of €100. I consider it important to minimise the costs associated with its collection. Accordingly, county and city councils will delegate their functions in administering the charge to one body, the Local Government Management Agency, which will be paid the costs of administering the charge from the proceeds of the household charge.

As there is no existing database of residential property ownership in the State, the Local Government Management Agency cannot issue bills or invoices. In this regard, the charge is a self-assessment measure and it is for the owners of residential property, in the first instance, to assess whether they are liable to pay the charge. Nonetheless, the charge is relatively simple and straightforward and is easy to understand. In addition to the normal sanctions involving a fine on conviction of an offence, the Bill incorporates late payment fees and late payment interest provisions which should act as a real incentive to pay the household charge when it is due.

From a drafting perspective, the Bill starts from a position where all residential property is liable for the household charge. It goes on to exempt certain buildings and owners from this liability. To put it another way, it identifies what is not liable within the totality of residential buildings, rather than taking as a starting point buildings and owners that are liable. These include, in section 2, properties which are owned by a Minister of the Government or the HSE, or are vested in local authorities or voluntary and co-operative housing bodies for social housing purposes. Other exemptions to the charge are provided for in section 4, including properties owned by charities and certain discretionary trusts, and where a person has to leave their home due to long-term mental or physical infirmity. Waivers are provided for persons in receipt of mortgage interest supplement or residing in certain unfinished housing estates on the liability date. The household charge will apply to immovable property and, as such, mobile homes and vessels are exempted from the household charge.

The Bill provides that the charge shall be paid to the county and city councils under section 3. However, local authorities will delegate their collection functions to the Local Government Management Agency under section 13. In the event of non-payment of a household charge for which a person is liable by a certain date, section 7 sets out that late payment fees and late payment interest of 1% per month, or part thereof, will apply to unpaid amounts. The late payment fee to apply in the case of a household charge paid not later than six months after the due date is 10% of the amount outstanding; in the case of a household charge paid later than six months and not later than 12 months after the due date, it is 20% of the amount outstanding; or in the case of a household charge paid later than 12 months after the due date, it is 30% of the amount outstanding. These penalty provisions are proportionate to the level of the household charge and are similar to the provisions that apply under Revenue legislation in respect of the late filing and payment of certain taxes. They will act as an incentive to pay the self-assessment household charge on time.

The rolled-up amount of a late payment fee should not be underestimated and non-payment of a charge for a period of two years will result in a liability of some €280 when account is taken both of the charges, the late payment fees and late payment interest. I want the message to go out clearly to those who are liable to pay this necessary household charge on time, rather than incur late payment fees. Local authorities will also have power to take prosecutions against owners who fail to discharge their liability to pay the charge. Prosecution will be by way of summary proceedings and a court may impose a class C fine, under the Fines Act 2010, which ranges from €1,000 to €2,500.

That is shameful. It is the intimidation of decent taxpayers.

There is no problem if they pay it.

He will not go after the bondholders but he will go after decent taxpayers. It is shameful.

There will be an opportunity later for other Deputies to contribute.

The provisions of section 7(3) to (7) came in for some comment on Committee Stage in the Upper House. These provisions deal with circumstances where a person who is the sole owner of a residential property dies and, at the time of his or her death, household charges and late payment fees and interest were due and unpaid. It was suggested that upon an owner's death, such unpaid charges and late payment penalties should cease to exist. I want to take this opportunity to outline to this House why these provisions are included in the Bill.

In the interest of equity, it would be grossly unfair to those households who discharge their liability for the household charge to allow for unpaid charges to be waived upon death for those who did not fulfil their obligations under the law while alive.

By Jesus, the Minister will follow them to the grave.

Such a provision could potentially create an incentive for persons to avoid or attempt to evade payment of the household charge. I believe the provisions of section 7 provide for a reasonable solution to the matter. Penalties and interest which had been accruing up to the point of death cease and no further penalties are applied, provided the personal representative of the deceased discharges the full amount of the household charge——

That is a new construction on grave robbing.

——late payment fees and interest due up to the date of death within three months of the date of the grant of representation to the estate of the deceased.

Where a property liable for the charge is being sold, the Bill provides in section 10(3) that the vendor will be required to discharge all outstanding household charges, late payment fees and late payment interest on or before the date of transfer. This should prove a strong incentive for a purchaser and their solicitor to ensure that all outstanding charges are paid before a contract to sell the property is executed.

In section 14 provision is made for data exchange between local authorities and the Private Residential Tenancies Board, the Electricity Supply Board and the Revenue Commissioners. This data should assist local authorities to identify properties liable for the charge. The Private Residential Tenancies Board holds data on rental properties and the ESB's systems can generate data on residential properties where electricity is used. The Revenue Commissioners hold data on certain property transactions, such as stamp duty, VAT and capital gains taxes. In addition, some other amendments and insertions are being made to the Local Government (Charges) Act 2009, which provides for the €200 charge on non-principal private residences. These include definitions and other provisions contained in the Local Government (Household Charge) Bill 2011 in order to mirror, in the Act, the provisions contained in the Bill.

The 2009 Act exempted properties leased to a local authority under the Rental Accommodation Scheme, RAS. The RAS exemption was included in order to encourage take-up of the then relatively new scheme. As the scheme has been in existence for a number of years, an incentive is no longer required. Indeed, similar long-term leasing arrangements with private property owners are now being entered into in respect of meeting social housing needs. As leases under RAS, now a mainstream social housing option, are subject to the same legal framework applying to private leases under the Residential Tenancies Act 2004, it is not justifiable that a landlord group should continue to receive added incentives simply from inclusion of their properties in social housing arrangements. Is Deputy Higgins happy with that?

The Minister should continue.

The Government has decided that the household charge will apply to properties in this group and has, furthermore, decided to remove the non-principal private residence exemption with effect from 2012. Linked to this is the exemption for properties leased to the HSE, which will fall to be treated in the same way as RAS.

The Bill also amends the Local Government (Charges) Act 2009 to provide for a €10 charge on over-the-counter transactions in respect of the NPPR. Initial take-up of the online payment option was encouraging, with 85% of users choosing to pay online in October 2009. By December 2010, this figure had fallen to 59%. Over-the-counter payments are resource-heavy for local authorities and it is considered that this should be reflected in an additional charge if somebody chooses to use an administratively expensive payment option when others are available.

Another tax on the poor.

The elderly do not use laptops.

A €10 transaction charge was also recommended by the local government efficiency review group to apply to all payments other than those made electronically. However, at this stage it is only proposed to apply the additional administrative charge to over-the-counter payments for the NPPR — the Deputies did not wait for the second or third sentence. Given the fact that some people may still not have access to electronic means of payment and the fact that broadband is not universally available, an electronic option may not be a realistic alternative to a postal payment for many people, particularly the elderly in rural areas. It is thus not proposed to apply the charge to payments made by post.

Deputies will be aware of the significant role which the Local Government Fund has played in the financing of local government since it was established in 1999. The fund has been financed from a combination of an Exchequer contribution and the full proceeds of motor taxation. Total funding for 2011 amounts to some €1.16 billion. The 2011 fund comprises an Exchequer contribution of €164 million and the proceeds of motor tax, projected at €998 million. Local authorities were allocated general purpose grants of €790 million in 2011, which represents approximately 29% of local authority current funding. Some €398 million was also provided from the Local Government Fund to the Minister for Transport, Tourism and Sport for the provision of roads and public transport infrastructure. As announced last week by my colleague, the Minister for Public Expenditure and Reform, Deputy Howlin, the Exchequer contribution to the Local Government Fund will cease this year and will be replaced by the proceeds of the household charge in 2012.

What about when property does not go up and people boycott it? What will happen to the local authorities?

Deputy Higgins will have to answer that, not me.

The Government is not solely focused on local government funding issues. We are also seeking to ensure that local government delivers the services that our communities expect as efficiently and cost effectively as possible. I will ensure that the proceeds of the household charge will be put to the optimum use in delivering local services on the ground. I am determined that local authority cost bases will continue to be rigorously examined and reduced to maximise efficiencies which, in turn, impact positively on business. The realisation of the savings and other efficiencies identified in the local government efficiency review group report will involve implementation over a focused timescale. In this context I established, earlier this year, an implementation group with an independent chair and business expertise to drive and oversee implementation of relevant prioritised recommendations of the report of the local government efficiency review group.

The implementation group is focusing on key recommendations in areas such as shared services, procurement, ICT and human resources that will remove costs and yield early financial savings for the local government sector. I am due to receive the implementation group's first report this month and this will include an assessment of progress made to date. We must also be cognisant of the reduction of over 6,500 staff posts in local authorities over the last few years — well ahead of any other area of the public service. This is one of the biggest contributors to efficiency and productivity in local authorities.

The Government's commitment to align the community development sector with local government will also see an expanded role for local authorities in local enterprise and community development. This, in turn, will maximise the impact of investment to produce jobs at a local level. My Department will continue to work with the County and City Managers Association to identify best practices in the local government sector, in building stronger sectoral approaches and in eliminating variances between local authorities.

I take this opportunity to refer briefly to another issue that is equally important to the well-being of the local government sector. A range of work relevant to the reform and development of local government is also under way, in accordance with the programme for Government, and significant progress has being made. On structural reform, the Government announced, on 28 June 2011, its decision to create a single local authority to replace Limerick city and county councils with effect from the local elections in mid-2014. In addition, the Government decided to establish a unified county council in Tipperary, also with effect from the next local elections. Implementation groups have been appointed to oversee planning, preparatory work and initial implementation of the reorganisation process in both Limerick and Tipperary and their work is proceeding. I have also established a local government committee to consider whether the creation of a unified authority in Waterford would be desirable and that committee is also in operation and is due to report to me by the end of February 2012.

These measures are being progressed ahead of more comprehensive policy proposals which will be brought to Government on local government structures at regional, county and sub-county levels. The local government sector is a willing and able partner in this agenda and recognises that public sector transformation is an integral part of the solution to Ireland's current economic problems. In this context, greater coherence and synergy between different levels of Government and the public service are fundamental to more efficient and effective operation. My Department and the local government sector are working closely together to advance broad public service initiatives for a more integrated public service which can achieve better value for money and enhanced customer service.

The Local Government (Household Charge) Bill 2011 is a short and straightforward legislative instrument. The Bill establishes a new funding source for local authorities. The revenue stream to which it will potentially give rise is significant, at €160 million annually. It builds on the experience of the charge on non-principal private residences and further broadens the revenue base of local authorities. Household charges raised nationally will be put to good use locally in providing the wide range of local authority services that the public needs and expects. The household charge is an interim measure and it will be replaced by a full property tax in due course. The Government has decided that an expert interdepartmental group will be established in the new year to consider the approach to the full property tax and report back to me by the middle of 2012.

No Government wants to be in the position of having to introduce new taxes or charges on a public that has been subject to austerity measures over recent budgets. We are in a difficult financial situation and we have to take the necessary action. The household charge is one of the steps along the path to economic recovery. It is also required under the EU-IMF programme of financial support, a programme entered into by the previous Fianna Fáil-Green Party Government. The legislative measures in the Bill give effect to one of the major requirements of the EU-IMF programme.

I thank Deputies for their co-operation in facilitating early consideration of the Bill and I commend it to the House.

I call Deputy Niall Collins.

The Minister should not worry as we had no choice. It is €160 million from households while the Government gives €3 billion to the Anglo Irish Bank bondholders and banks. That is to put it in context.

Deputy Higgins will have his chance later.

Is Deputy Niall Collins sharing with Deputy McGuinness?

I am sharing with Deputies McGuinness and Michael McGrath.

How is the time being shared?

Fifteen minutes, ten and five, however we are going.

I would say at the outset that there is a problem with statements and announcements coming out of the Minister's Department and I will give him two examples. The publication of the Water Services (Amendment) Bill providing for a registration charge and monitoring of septic tanks was not accompanied by any public announcement until the Department was contacted about it. Second, this legislation, the Local Government (Household Charges) Bill, was published in the middle of the budget speech of either the Minister for Finance, Deputy Noonan, or the Minister for Public Expenditure and Reform, Deputy Howlin.

The day before.

I am not saying that the Minister, Deputy Hogan, is responsible for that but he is at the top of the food chain within the Department. There seems to be something of a trend starting here, that highly contentious and unpopular taxing measures on the public are being announced at inconvenient times with the result that we are not allowed an opportunity to respond adequately in the correct forum. The Minister might acknowledge that and take it on board for some of the other measures that are coming down the tracks.

The Minister mentioned the EU-IMF agreement, the memorandum of understanding and the four year plan entered into by the previous Government. It is worthwhile reminding him that when in opposition, both he and the Government parties opposed the four year plan tooth and nail. With might and mane, they voted against it and they articulated against it at every opportunity. Now the Minister finds himself in the opposite position where he is cheerleading it.

It is worth reminding the Minister that the four year plan was based on a deficit reduction to 2014, and that is now stretched out to 2015. It could be argued with a degree of legitimacy that many of the measures which were included in the four year plan are no longer relevant and do not have to be met within the timeframe indicated because the Government dragged them out to 2015.

It is also noteworthy that my party, and I am sure the Minister, and all of the other political parties within the Oireachtas, have met the troika. The troika is at pains on every occasion we meet to tell us that once the bottom line adjustments are made over the intervening years to bring the deficit down to 3% of GDP by 2015, it does not mind how they are made. It is my party's contention that the household charge is not the correct way to proceed at this point in time.

My party is opposing this legislation on the basis upon which it is presented unless it is significantly amended to provide for additional waivers and exemptions to the many hard-pressed citizens and communities across Ireland. The Bill, as presented, does not provide for enough exemptions.

As a party, Fianna Fáil recognises the principles of property tax and of broadening the tax base, but the household tax, in its current form, with the limited number of exemptions and waivers, is highly regressive and a blunt instrument. There is no logic in levying the same amount of property tax on a person living in Ailesbury Road as on a person locked into an apartment in Adamstown or a person living on an island off the west coast. We need a fundamentally different approach and to take a step back. We need to consider the charge in a constructive manner along the lines mooted in respect of a site valuation tax.

The Minister said he hopes to raise €160 million. Last week, he was representing us at a completely different forum, namely, the climate change conference in Durban. When the budget was presented last week, the Minister for Finance, Deputy Noonan, said the household charge would raise €100 million. It has been mooted consistently that the charge will raise €160 million, which is to be ring-fenced for local authorities. When the Minister for the Environment, Community and Local Government gets a chance, he might consult the Minister for Finance and clarify the matter. Late last week, the environment correspondent of the Irish Independent, Treacy Hogan, a fairly reputable and up-to-date environment journalist, rightly pointed out the discrepancy because €60 million is not insignificant. The Minister for Finance has one take on the matter and the Minister for the Environment, Community and Local Government is flagging a different sum of money.

The Minister for the Environment, Community and Local Government referred to the NPPR charge. His last point, that somebody paying the NPPR charge will be subject to a charge of €10 if paying over the counter, is completely ridiculous. That a person who presents himself at a local authority to conduct a face-to-face transaction, rather than posting a money order or cheque, will be subject to a surcharge of €10 is completely ridiculous. I cannot see the logic. The Minister is effectively saying he does not want over-the-counter transactions or human interaction.

With regard to the principle of applying the household charge to properties that are already subject to the NPPR charge, there is a fundamental injustice. The same person is being taxed twice on the same property. That is inherently unfair and will have to be teased out a little further on Committee Stage.

The Minister is well aware of the debate on pre-1963 units at the time of the introduction of the NPPR charge. I refer to the properties divided into multiple bedsits, all of which are liable to the charge. It is likely they will also be liable to the €100 household tax although the entire property will be held under a single Land Registry folio number. The Minister's party took this up during the debate on the NPPR charge and was against it. Now that it is in government, it is not against it although it is in a position to do something about it. This represents an inherent contradiction.

At the time of the NPPR charge debate, the then Minister, Mr. John Gormley, informed the House that the NPPR charge would be allowable against rental income as a business expense. People took him at face value. The Revenue Commissioners, which have taken a decision on the matter, are now disallowing it. What is the position on the household charge? Will it be allowable as a business expense? We want clarity on it.

The Minister stated he has created a number of categories of exemptions and waivers. They are pretty limited and we have an issue with this. Will the Minister expand on the waivers as opposed to exemptions? He mentioned that people in receipt of mortgage interest supplement will be entitled to a waiver and also those who live in a unit listed in a published schedule of unfinished housing estates. Will a waiver be partial or in the order of 100%? Will there be various categories in that some people will get a waiver of 50%, 60% or 70%? Will the Minister enlighten us on that when he can?

We will be tabling a number of amendments along the lines of those introduced in the Seanad. We have an issue with increasing the charge to reflect increases in the consumer price index. We feel any increase should require legislation in the Oireachtas.

The categories of persons in respect of whom exemptions and waivers should be expanded further include persons who hold a medical card. We tangled with the people who held medical cards and paid the price for it. There are those who rightly qualify for medical cards and my party believes a person who holds a full medical card should not be paying the household charge. People on social welfare, jobseeker's allowance, jobseeker's benefit, supplementary welfare allowance, the family income supplement and farm assist payments should also be entitled to an exemption from the payment of the household charge. Old age pensioners, many of whom are medical card holders, are being made pay the charge. They are in their twilight years, in retirement, and have made their contribution to the State. Many of them retired with no private pensions whatsoever and live only on the State pension. They should, therefore, also be exempted, as should those on the disability allowance, disability benefit and the blind pension.

The Minister created an exemption for people on mortgage interest supplement. The budget last week tightened up on this so the category of people affected is being squeezed. We feel the Government, which has not acted yet on the Keane report, should exempt people who are in mortgage arrears and those in negative equity. I refer also to those who can show, through independent certification, that they have not been able to make 75% of their mortgage repayments, or who can show, again through independent certification, that their property is worth less than 75% of its market value at the time of purchase — in other words, that they are in negative equity. These people should also be exempted.

I want clarity on shared ownership. I do not know whether the Minister mentioned it in his speech.

We want to see an exemption for households suffering on foot of the pyrite issue. This is a very topical issue. It is not one that affects my constituency, thankfully, but it affects many houses in the greater Dublin area. There was a commitment made by the Government parties, namely, the Labour Party and the Fine Gael Party, to deal with that issue comprehensively. An exemption would recognise the problems faced by the affected householders.

It was rightly stated that the budget was distinctly anti-rural.

The Minister should consider giving rural dwellers who will have to pay €50 registration charge for septic tanks an annualised offset of €10 against the household charge to redress the imbalance we are creating for rural dwellers. This will allow him to answer the charge that he is anti-rural.

This budget has been exceptionally anti-rural. The Government is discriminating against rural communities with its cuts for small schools, school transport, rural Garda stations and the changes to the family income supplement, disadvantaged area payments and farm assist. The household charge will impact further on rural society.

The Minister is a practical politician——

——but this legislation is very contentious. It will be badly received outside this House.

He is losing touch.

How is the Deputy's website going?

He should consider the exemptions my party proposes because they are reasonable. Medical card holders, old age pensioners and those who are in negative equity need to be exempted. I look forward to debating our proposals further with the Minister.

The Minister described this Bill as short and straightforward. He is correct in so far as he is putting his hands straight into the pocket of the people he took money from last week. I expected that the legislation would be parked. He referred to the fact that the previous Fianna Fáil Government signed up to the EU-IMF deal but much has changed in the interim. Given that the Government has renegotiated the deal, last week's budget is its own work.

The Deputy should read what he said about it in his book.

The Minister should read the book because I never saw anyone getting into bed with bureaucracy with such speed. That is what this Bill and the Water Services (Amendment) Bill 2011 are about. As he is doing exactly what it says in the book, the bureaucrats should be happy with him for abandoning his practical approach to politics and taking to the comfort zone of doing what they say.

He mentioned 6,500 staff posts in local authorities. Similarly, the Minister for Public Expenditure and Reform regularly equates reform to the loss of 37,000 people in the public service when he should be changing the entire ethos of government. That is where the efficiencies will be achieved.

We are doing that after 14 years.

The Government is not showing much signs of life on the matter.

This is a financial measure.

The McCarthy reported identified €500 million in savings. The Minister hopes to collect €160 million. Why not reform the structures of local government to put a more efficient system in place so that he does not have to take more money from the same people? The Members opposite — the same could be said about the previous Government — are afraid to touch the structures and vested interests in local and national government in order to achieve greater value for money.

Stop being hypocritical. The Deputy was in power for 14 years.

The Members opposite gave us that mantra during the election. They told us they would be a reforming Government. This Government is, however, falling neatly into the same trap and pathways as its predecessor.

Same old, same old.

It is the same old story and the Minister has abandoned every promise he made to the electorate. This Bill is another example of abandoned election promises. I expected more. Local government needs to be reformed.

We are implementing the Deputy's policies.

I recognise it needs money but not this way. There are alternative means of finding the necessary resources. The Minister let go of €500 million because he is afraid to touch the structures of local government.

The Deputy will be disappointed again.

He is taking this €160 million from the same people who were hit by the last budget. In regard to the amendments being made to the Bill, the tax on second houses is not the best example. That tax was not fully understood, with the result that some were caught with penalties. A lady from my constituency who had a second house but had to move for work purposes was hit with a fine of €1,500. It is impossible to get relief or compassion from the system. If this Bill follows the same route, it will exclude a significant number of people who, out of hardship, cannot explain their case. It is ridiculous to impose a charge of €10 on those who want to pay their bills. Any enterprise in this country would be happy to take cash from a customer but the local authorities, which are top heavy, inefficient and targeted for reform by the McCarthy report, will be allowed to impose a further €10 on those who are trying to make ends meet.

Given the hardship that householders are experiencing, €100 is a significant amount of money. Deputy Collins and the Minister have tabled amendments to exclude certain categories. By excluding so many, the Minister will be taking more from already hard-pressed mortgage holders who are probably in negative equity. They could be landlords with second houses. Does he think landlords will pay this tax without attempting to pass it on to their tenants? They are probably in negative equity and are failing to meet their monthly mortgage repayments. We are imposing another tax without considering the potential impact of what appears to us a small amount of money for people who cannot manage it.

Given the Government's majority, this Bill will undoubtedly pass but I ask the Minister to put reforming local government at the top of his agenda and this imposition on householders last. He should consider whether the exemptions that have been suggested will work and determine who is being penalised and by how much. He has introduced various changes to the tax on second houses under section 19 of the Bill. The application of the tax in respect of the rental accommodation scheme is being reversed.

I ask him to allow people to argue their case with local authorities. If he serious about collecting and disbursing this money, he should strike a balance between local authorities with different population sizes by giving them a lump sum they can spend at their own discretion. Let us take at least a small step towards reforming local government with this Bill by allowing them to make decisions for themselves.

In terms of paying the tax online, something has to be done so that people who are too poor to own the necessary technology or do not understand how to do their business that way are not penalised.

I am delighted to be able to speak on this Bill and I thank my colleagues in the Fianna Fáil Party for allowing me some time.

Old friends are best.

Old friends are best, always.

He never left.

The Minister and Deputy McGuinness were good friends for a while, but I hear they are going to fall out on this one. We could use many different words and moods to describe the Minister, but he said this would be a short and straightforward Bill. There is nothing short about it, although it is straightforward and direct. It is penalising ordinary householders — the people who went out and built their houses, maintained them and did not go knocking on the Minister's door or other doors looking for houses. They are the doers and the achievers, those who went out and did all they could. They are the people who are being penalised again here. The Minister blames the EU-IMF and the troika, but that has gone out the window. This is the Minister's budget, not that of John Gormley or any of the old Ministers. It is this Government that has introduced these cruel charges. I am glad his backbenchers, some of the Labour Party backbenchers and, moreover, the Government's county councillors around the country have allowed him the silly season to take the Water Services (Amendment) Bill off the agenda and regroup. They want to rethink and try to bring the Minister into line. It was a septic Bill, becoming more septic by the hour, and the Minister was not able to handle it. That is the real reason. It is not a shortage of time. The Taoiseach was telling us we could have extra time tomorrow and the day after to discuss what we are discussing today.

The Deputies do not want to.

The Minister brought it back because he got frightened. The Minister is a big man — I described him before as Big Phil — but he was a coward when it came to that, because it was a cowardly act. This Bill is also a cowardly act. It is hitting people below the belt, and it is unfair, mean and lousy. We are going down in a minute to launch a book by the Minister's colleague, the Minister for Arts, Heritage and the Gaeltacht, Deputy Deenihan, about his time in sport and his sporting prowess. I wonder what kind of a book we will be writing about you, and what kind of book will we have to launch when your time is ended here.

Through the Chair, please, Deputy.

I am talking through the Chair.

I ask the Deputy to address the Chair and not the Minister.

The seating arrangements are difficult where I am sitting, but I will address the Chair. Anyway, I wish the Minister well in politics. He has been in it a lot longer than I have. He is a practical man from a neighbouring constituency to mine. He used to be practical and he used to listen to the people, empathise with them and work for them, but that has all changed. When Fine Gael Party Deputies were here on this side for the past 14 years, it seemed there was nothing they would not have done for the people if it were not for the chastity belt that the Fianna Fáil Party and the others were putting them into. Now they are in Government and they think they have carte blanche to do what they like. The officials are running the show, not Minister Big Phil, as I call him. He is not running it. I know he was out in Zambia or somewhere last week. I do not know what he was looking at, but I hope he was looking at holes in the ground out there to see what kind of septic systems they have.

They have none.

None the less, he was out there. Then he came back today and withdrew the Water Services (Amendment) Bill, and rightly so. He should also withdraw the Bill we are discussing, because it is a disgraceful attack on law-abiding citizens with threats of law. What is it all for? Is it to keep a bureaucratic system of local government in place? When I joined the county council in the 1990s, there was a county manager, a county engineer, a county secretary and a few other engineers; now there is a plethora of officials. It was the previous Government that did this, not the current Minister, but the Fine Gael Party did not object to it.

It is a huge system, top-heavy with officials — not the ordinary people who are doing the work on the ground. There are no men with shovels on the ground. We will pay these charges, but roads and sewer systems are being neglected — everything is being neglected. The briars are meeting you up the boreens. They have done away with the local improvement schemes and everything that was in any way good to prop up a system that is an abject failure and that is top-heavy with officialdom. They have lost out on the fees and charges they were getting from planning permissions. Last week in Tipperary there were seven planning permissions in seven days. That gravy train is gone, and now the Minister wants to give the local councils this system. He wants to screw the ordinary people to keep the fat cats in jobs. These are the people who are avoiding the pension levy — the directors and senior management, not the ordinary people earning less than €100,000, the ordinary workers on the ground, or the clerical officers who do a decent day's work for a decent day's pay. I am talking about the top people who have credit cards. I will table a parliamentary question to ask the Minister how many credit cards each county council has given to its managers and directors of services. It is a gravy train at the expense of the ordinary people.

The ordinary people are tired of this. I thought the Minister would know that because he lives among the ordinary people. What is it they say? Power corrupts and absolute power corrupts absolutely. As I said before to the Minister, it took the Government members only a number of months to become arrogant and start attacks on the people, while it took the last Government ten or 12 years. They are good learners and they are fast runners, but they will not be fast enough to run from the people's wrath on this, because they will not accept it.

To return to the septic tank charges, people will not register. I do not advocate disobedience, but they will not register, and I doubt they will pay this charge either. The Minister has added a punishment to the Bill — he will charge people extra if they do not pay. I am in business and so are many others in this House. Most business people throw out a carrot at this time of year to persuade people to buy their products — two for the price of one, or whatever. Even when buying an Aero bar, one gets two for a euro now. What is the Minister doing? If people do not pay on time, he wants €10 extra. This is because it is planned by bureaucrats who do not have a clue about how people have to live. They think they can add on more, and add interest on top of interest, instead of offering a carrot to people to come with them along the road and support these so-called reforms.

The people were promised reforms, but they got nothing but deforms. It is an abuse of the people, of the electorate and of the system of government we have. It will not last. The honeymoon is over. It is the Government's budget and the Government's choices, and its members will have to stand up and face the music now. The Minister will have to go back to Kilkenny and face the people at the weekend and the following weekend. Kilkenny might beat us in the All-Ireland final, but the Minister will not beat the people with this kind of regressive, penal legislation.

I wish to share my time with Deputies Ferris and Doherty. I have to follow that Tipperary performance.

The first thing about this Bill is that it is coming hot on the heels of the budget, which was described to me by constituents last week as being the worst kind of Christmas present they could have received. People are facing into difficult circumstances, with a plethora of costs and budget cuts. The liability date for this new charge is 1 January — the new year. If the budget was a bad Christmas present, this will really be a disappointing new year for people.

To introduce a Bill of this nature and force it through by tomorrow is clearly undemocratic. The Bill would more appropriately be entitled the bank bailout Bill, as it has little to do with raising finance for local authorities and more to do with bailing out banks and unguaranteed bondholders, as I will explain in a minute.

To put it in perspective, the Government has slashed the Local Government Fund by a massive 84% and expects the public to come up with €160 million to fund services at local government level. This makes no economic sense. It is both political and economic piracy. This cut will bankrupt local authorities. Councils are struggling to fund services. In recent years, councils, under pressure from the commercial sector, have had to reduce commercial rates, and this has naturally had a negative effect on the funds raised. Here in Dublin, the largest local authority in the country has been forced to sell off its waste collection services. This is despite the lack of proper national legislation to regulate the industry and protect the public from unscrupulous waste collection companies. The sale was carried out by Dublin City Council to raise funds to allow it to keep functioning. This unilateral decision was made by the management despite the democratic wishes of the elected councillors. In fact, on three separate occasions, a majority of Dublin city councillors supported a Sinn Féin motion opposing the sell-off of this essential service. It is ironic that although this motion received support from Labour Party councillors at Dublin City Council, here in the House, the Labour Party in Government is involved in an unprecedented attack on local government.

We in Sinn Féin believe in local government despite its many shortcomings. We believe it should be improved and that it should be strong, democratic and accountable. Local government is strengthened when it has sufficient funds and its councillors can make real decisions and are held accountable by the public for the decisions they make. This Bill achieves none of that. In fact, it fails to deal with the democratic deficit in local government. If it is passed, it will make local government financially weaker and undermine our overstretched public services.

We also believe that cutbacks need to be made. We know savings must be made, but this Bill takes the age-old lazy option of introducing a regressive flat tax on households. Thatcher called it the poll tax. If we are to address the waste, let us start at the top and make those who can afford it pay the costs. A quick look at the pay scales of city and county managers would clearly highlight where the real cuts should be made to local government. Top of the league is the Dublin city manager on €189,000, followed by the Cork county manager, Fingal county manager and south Dublin county manager on €162,000 each. Not far behind are the managers of Cork city and Dún Laoghaire-Rathdown on €154,000 and the Limerick city manager on €142,000, while the Waterford and Galway managers can expect to earn €132,000. All of these managers will be paying the same household charge as somebody on the new disability allowance following the cut last week.

The Bill is a desperate attempt by the Government to shift money from local government into the banks. Local government must be financed by a progressive taxation and rates system. We have argued for changes in the rates system to provide for an income based clause for businesses. The Bill exposes the myth that we live in a low tax economy, which has been promoted for years by consecutive Governments. This mantra is used every time charges are introduced for health care, education and public services, including water and bin charges. Various Government Ministers and their allies have told us over the years that to keep taxes down, it is necessary to pay more. That is a contradiction. Again, in the recent budget the Fine Gael Party and Labour Party Government said it must keep taxes down so it was necessary to get the public to pay for services that have already been paid for in those taxes.

The public that is being asked to pay €100 to local government will be paying the same amount of income tax next month as it paid this month. There is no reduction in taxes, just more hard earned money being spent on essential services. Of course, the rank hypocrisy does not stop there. When one studies the detail of the Bill, it is clear from section 2 that a person who has a bedsit behind their house, for example, a granny flat, will pay the same rate as somebody living in a €5 million mansion. Where is the sense or the justice in that, unless one is sitting on the Government benches and wants somebody who owns a bedsit to pay the same for local government services? Sinn Féin proposed a wealth tax in its budget proposals. In regard to residential properties, this would only apply to houses worth more than €1.2 million. That is fairer.

The Minister has claimed this is a temporary measure until the Government can introduce a more progressive property tax. We would welcome a real debate about funding for local government based on progressive politics. However, there is no provision in the Bill for a temporary charge or a commitment that it is being introduced on a temporary basis. That will be our first proposed amendment to the Bill. We want a commitment in black and white that this Bill will be temporary. The sooner the Bill is history, the better.

There is no attempt to conceal the Government's contempt for ordinary people. Nowhere in the Bill is there a waiver for people on social welfare. A list of waivers was quoted by the Minister in his speech but it did not address any of the issues. Last Tuesday, this heartless Government cut €88 from the disability allowance for young people and reduced the fuel allowance for everybody, including the elderly. This week the Government is asking people to pay up another €100 for local services. The Bill will criminalise people for not being able to pay. It states that where a person is convicted of an offence under the Bill, the court shall order the person to pay the relevant costs and expenses, measured by the court, incurred by the relevant local authority. In other words, the person who cannot afford the household charge will be brought to court and if found guilty will have to pay the court costs of the local council that brought them to court. There is also provision for fines of up to €2,500.

Normally in this country, a person's debts die when they die. They do not bring their debts with them in the coffin. Under this Bill, people will be followed to the grave and after that their estate will be pursued for this. It is outrageous that the Minister is chasing people to the graveyards for it.

Every provision in the Bill attempts to punish ordinary people for mistakes that were not of their making. The charge is being introduced in the same week the Government tried to force through the water services Bill. I only heard two hours ago the Minister's announcement that he will hold back on the septic tank Bill until after Christmas. Under that Bill, householders are being asked yet again to bail out the Government for the sins of consecutive Governments. Town halls throughout the country have been filled with ordinary people voicing their objections to the septic tank Bill, including last Friday night in Kerry. Now these people are being hit with a household charge as well.

A private well is okay so Deputy Ferris need not worry.

The anger at these charges is palpable. People are being hit daily with extra charges but no extra services. People who worked hard and paid their taxes, including the people who paid taxes of 60% and more in previous bad times to ensure services would be provided, are being asked to dig deeper and pay more for the same services they have been receiving. This does not add up. People know when they are being taken for a ride and being punished for others. Sinn Féin will campaign at every step against this regressive charge and ensure it is overturned. We will use every opportunity during the debates this week and next year to ensure it is consigned to the dustbin of history.

How dare the Government suck the oxygen of funding from local government and expect ordinary people to breathe it back in? I believe people will simply not pay. The household charge will not be paid because people cannot afford it. It is unjust and they see it as such. It should be withdrawn before it brings the Government into conflict with its communities. Regardless of what is said in this debate, people have made up their minds. There is a line in the sand they will not cross. Households will not pay this charge and the Government can make every threat it wishes to in the Bill. It can threaten courts, fines and escalating costs, but I believe people will simply withhold payment.

The Government is depending on 100% payment of this charge to compensate for the 84% cut in its contribution to the local government fund. The cut is €165 million and the Minister has earmarked €160 million from this charge to make up the shortfall. I do not believe it will happen. It is an exercise in self-delusion. From where will the balance come? If there is a 90% non-payment rate, we will have the ridiculous situation of the Minister trying to divide €16 million between all the local authorities in the State. Even if 50% of the population does not pay, it will reduce the amount to be divided among the local authorities by €80 million. Local authorities need the local government fund in 2012. Even with the best will in the world, the household charge will not compensate for the cut made by the Government.

We opposed the bin charges when they were introduced. We said at the time that the charges were the first step towards the privatisation of domestic waste collection. We were right. I predict that if this Bill is passed, it will be the thin end of a very thick wedge. Households will first be forced to pay the €100, and the cost will increase over time to perhaps €500, €600 or €700.

In conclusion, the Bill is, at best, ill thought through. It is a blunt instrument to punish households. It is another measure to force householders to make up the shortfall in the State's funding, as a result of money being sucked out to pay the interest on bank debts. At worst, it is an attempt to use the current economic crisis as a smokescreen to bury local democracy further. Either way, we will lead the opposition to it.

The most insidious aspect of the household charge is that it is being imposed as part of the IMF-EU deal which underlies the welding of the bank debt to the sovereign debt. When people find themselves in difficulty with this — for some it will be the straw that breaks the camel's back — they can at least have the satisfaction of knowing that somewhere a major bondholder will sleep easier in their bed at night.

Indeed, if we want to know what else is coming down the track all we need do is read the IMF-EU memorandum of understanding rather than bother with the programme for Government. The programme for Government means nothing. The memorandum of understanding determines what will happen. The memorandum of understanding with the EU and IMF commits Ireland to the introduction of a property tax for 2012 and to an increase in the property tax for 2013. At least we cannot be fooled into believing that these are temporary measures or that they will not be increased. The household charge is only a holding device prior to the introduction of a full scale property tax which the Government has committed to introducing this time next year at the latest.

I referred to reading the original memorandum of understanding because there was an attempted sleight of hand when the updated and ironically named stability programme was published last April. It refers several times to the alleged independence of the Irish Government in deciding what to do in order to ensure the debt is repaid. Many believe it cannot be repaid but we can happily destroy the country in the process of trying.

It is a bit like when one owes Tony Soprano money and he gives one the choice of burning down one's house and claiming the insurance money or stopping feeding the children. Like the IMF and Goldman Sachs, the Sopranos are not fussy as long as one pays them back.

Page 21 of the updated stability programme states: "Of course policy is a matter for Government." That is total and absolute nonsense. The only matter which the Irish State currently decides is where exactly to implement the massive cuts that we witnessed last week. The overall strategy is decided by the IMF and the EU and, as I said, the programme for that is laid down in the original memorandum of understanding.

The Minister admitted the household charge was necessitated by the IMF-EU programme of austerity, yet the Government would also claim that it is still a free agent. At least the Tánaiste had the good grace to abandon quickly his bravado of stating that it was either Frankfurt's way or Labour's way. He had his chest out and shouted that prior to the election. Frankfurt's way is Labour's way, as we have seen.

There is also the claim that the charge is needed to pay for local services. It is, but only because the State has stopped funding those services out of overall revenue. People's taxes will not be reduced and this charge and the coming property tax constitute an extra tax with no extra or improved services. Services are actually declining. The overall impact of the austerity programme and other measures will ensure that the level of public provision, through local services and the overall public service, will continue to decline.

People are being hit both ways. They are paying more for less. The assault on people's pockets and quality of life is being justified on the basis that the austerity programme is required to ensure there are teachers, nurses and gardaí. Of course we all know that is nonsense. We may have to borrow to pay for services but we always have, at least since 1932 with the first Fine Gael Government, which had a similar attachment to looking after banks and not providing public services.

This is not about paying for public services. It is about paying the bank debt. That is why we have the IMF and this new double form of taxation, one my party will strongly oppose.

Deputy Stanley mentioned public meetings taking place all over the country in opposition to the septic tanks charge. I attended a meeting in Listowel last Friday night where over 400 ordinary citizens who will be directly affected by the tax turned up. It was obvious that despite the invitation neither Government Deputy turned up. That is an indication of how fearful they are about facing the public because their constant U-turns on their pre-election promises are being exposed.

Septic tanks will have to be upgraded to complement the terms of the regulation. People who got planning permission between 1975 and now have done nothing whatsoever to undermine it and have complied with it, but will now be expected to put a lot of money into septic tanks to update them to comply with the requirements. The regulation was in place in 1975 but was not implemented. The ordinary public will have to pay for it. It is an absolute disgrace.

People right across the country will refuse to pay. Deputy Mattie McGrath has said he will lead a campaign to refuse to pay the charge. Genuine political leaders of political parties who are concerned about the poor and the rights and entitlements of ordinary decent citizens will be with people opposing the terrible austerity measures that have been brought about by the Government.

Tá sé dochreidte go bhfuil a leithéid de Bhille os comhair na Dála inniu. Tá sé dochreidte go bhfuil Rialtas atá déanta suas de Fhine Gael agus Páirtí an Lucht Oibre ag gearradh cánach ar dhaoine nach bhfuil an t-airgead acu leis an cháin seo a íoc.

Chuala mé go leor daoine atá ag tabhairt tacaíochta don Rialtas ag rá, taobh istigh den Teach agus taobh amuigh, nach bhfuil ann ach €100 agus gurb ionann sin agus €2 sa tseachtain. Deirim leis na daoine sin nach dtuigeann siad a bhfuil go leor des na gnáth daoine ag dul tríd lá i ndiaidh lae. Níl a fhios acu na deacrachtaí atá ag daoine éadaí a chur ar a gcuid páistí nó bia a chur ar an tábla. Nach bhfeiceann siad na fíricí atá ag tarlú i ngach baile, i ngach sráidbhaile agus i ngach paróiste ar fud an Stáit seo?

Feicfimid an Bille seo ag gearradh cánach ar thithe, gan aird ar bith ar an ioncam atá ag teacht isteach go dtí an teach sin. Tá an Bille seo ag teacht isteach ag an am chéanna agus atá Billí eile ag teacht isteach. Luaigh an Teachta Martin Ferris an Bille a ghearrfaidh cánach ar thithe i gceantair tuaithe ina bhfuil scéimeanna séarachais acu. Gearrfar €50 agus fíneál suas go €500, agus b'fhéidir suas go dtí €17,000 má tá ar dhaoine bail a chur ar an scéim séarachais sin.

Tiocfaidh na Billí seo isteach agus tá a fhios againn go bhfuil Billí eile le teacht anuas an bealach mór. Sa bhliain 2013, táimid ag dul a fheiceáil Bille uisce a chuirfidh níos mó fiacha ar ghnáth dhaoine. Tá seo ag tarlú ag an am chéanna is atá an Rialtas ag gearradh seirbhísí agus ag gearradh na tacaíochtaí a tugtar do dhaoine atá i dtrioblóid, ó thaobh laghdú ins na híocaíochtaí leasú shoisialta agus a leithéid.

Tá go leor daoine sa Rialtas, idir Airí agus Airí Stáit, a bhfuil léann acu agus a chuaigh chun na scoile. Tá cuid acu a fuair oideachas ar an tríú leibhéal agus a bhain céimeanna agus árd-chéimeanna amach, ach nach dtuigeann nach féidir airgead a bhaint as daoine nuair nach bhfuil an t-airgead sin acu. Ní misde dintiúr nó PhD a chrochadh ar an bhalla. Caithfidh go bhfuil a fhios seo ag na daoine sin. Buaileann siad leis na daoine céanna agus a bhuaileann mise leo. Faigheann siad na ríomhphoist, na scairt ghutháin agus na scarbhileoga céanna agus a fhaighimse agus feiceann siad go bhfuil sé indéanta níos mó airgid a bhaint de dhaoine.

Níl mise in éadan níos mó cánach a bhaint as daoine gur feidir leo an cháin sin a íoc. Tá sin curtha chun tosaigh ag Páirtí Shinn Féin ins an cháipéis a chuireamar chuig an Rialtas roimh an cháinaisnéis. Seo an fhadhb atá ann. Iarraim ar an Aire insint dúinn go soléir cén dóigh ina bhfuil an cháin seo féaráilte. Is é an rud atá Sinn Féin ag iarradh a bhaint amach ná go ngearrfar cáin ar na daoine atá in ann breis cánach a íoc sa dóigh is gur féidir linn an difir idir an teacht isteach agus an chaiteachas a laghdú, ach táimid ag iarraidh sin a dhéanamh i ndóigh atá féaráilte agus a chuidíonn leis an eacnamaíocht áitiúil agus leis an bpobal.

Ní seo ceann des na bealaí seo. Ní dhéanann an cháin seo idirdhealú ar bith idir an bodach mór a bhfuil pá mór aige agus atá ina shuí i dteach breá agus tréan ioncam aige, agus an duine a bheidh ag siúl isteach chuig doras Chumann Naomh Uinseann de Pól ag an deireadh seachtaine seo ag cuartú airgid fá choinne bia nó fá choinne breosla sa dóigh is go mbeidh teach tirim agus te aige.

It is absolutely amazing — that may be too strong a word given what we have seen the Government is capable of — that the Government is introducing such a Bill. It is calling the charge property tax but it is more like a poverty tax. It is a tax that impacts on 1.6 million households throughout the State without taking into account that many of those households are living in poverty. It ignores the fact that many families have in recent days, as the cold weather set in, had to go to supermarkets and petrol stations to purchase home heating oil in gallon or five-gallon drums. It does not acknowledge that more people than ever are seeking assistance from the Society of St. Vincent de Paul or visiting charity shops in search of a small bargain to provide for their children at this special time of year. It ignores the fact that many people will go without because they cannot afford to pay the charge.

I do not claim any monopoly on wisdom or compassion, but people have come to me — as I am sure they have come to other Members — and produced, in table format, a statement of their income and expenditure. There is nothing more to give. It is simply a matter of feeding themselves, keeping their home warm and paying the mortgage. For many, it is about staying above the parapet or threshold below which they will begin to suffocate. Yet this Bill proposes that regardless of how difficult one's personal circumstances, one must give more. The wealthiest person in the State, living in a mansion without a care in the world, will pay the same €100 as the person in deep economic distress. We have all read the letter in the national newspapers from the person who had nothing to feed his children but cereal. People like that will face the same obligation as the wealthiest people in the land. There is nothing fair about it.

As Sinn Féin's spokesman on finance, I have presented the Government with a range of options which would secure the deficit reduction target the Government has set for itself under the EU-IMF programme. We are not opposed to asking those who can afford to pay more tax to do so. However, we are opposed to an entirely unfair flat-rate tax which impacts most strongly on those who are most needy. All of the other Ministers and Government Deputies who, excepting the Minister of State, Deputy Ciarán Cannon, did not bother to attend the Chamber for this debate should hang their heads in shame. Have they no understanding of what people are enduring? I am sure it is not just in Donegal South-West that one sees houses where Corn Flakes packages are stuffed in door jambs or cardboard boxes placed under the window sills in children's bedrooms in an effort to keep out the draught. Such measures are necessary because of the cuts in supports imposed by the previous Government. Grants are no longer available from local authorities to assist people in replacing their windows and doors.

This Government is continuing along the same line. In this instance, it is asking large numbers of people to pay a charge they simply cannot afford. There is a moral question as to whether they should be asked to pay it in the first instance given that this money will not be used to assist the most disadvantaged people in the State but rather to assist people with no disadvantage in other states. On 25 January 2012, unguaranteed, unsecured bondholders in Anglo Irish Bank will be paid €1.25 billion. That one cheque, on that one day, would pay the household charge for 1.6 million households for the next ten years.

It is all about choices. The Government cannot blame the EU-IMF for having to introduce this legislation. I have listened to Fianna Fáil Party Members jumping up and down and getting hot under the collar about the household charge. We all know that if they were still on the other side of the House they would introduce the exact same legislation, because there is no difference between the Fianna Fáil and Fine Gael parties. Nor it seems is there any difference between either of them and the Labour Party. The reality is that there is no requirement from the EU and IMF to introduce this charge. My party has met with representatives of the troika and what they are interested in is the headline figure. They want to see the deficit reduced by the specified amount. It matters nothing to them whether the Government takes €160 million in the form of a household charge or from some other area.

If the Government wishes to tax property, it should look to the legacy property reliefs still in existence. These are the allowances which fuelled the Celtic tiger, made many people millionaires and lumped the ensuing debts on our shoulders. The abolition of these reliefs would bring in twice as much as will be brought in through the proposed household charge.

I was listening to a programme on my local radio station, Highland Radio, in the car earlier today in which callers stated their intent not to pay the charge. I applaud anybody who cannot afford to pay it who refuses to do so. People should not have to make a choice between meeting this regressive charge and feeding their children, putting clothes on their backs or heating their homes. They are doing the right thing in refusing to pay if they cannot afford to do so.

I was particularly struck by one caller, a man of 87 years of age with a fantastic voice that was full of compassion. This individual is disabled and confined full-time to a chair, and he is genuinely worried about this charge and about his ability to pay it. The presenter, Shaun Doherty, who is also a very compassionate person, sought to reassure the man that he would surely be exempt on the basis that he is in receipt of disability allowance and so on. The reality, however, is that this person is not exempt. That 87 year old should not be worrying about what the Government is proposing in this Chamber tonight. I do not know what this man's life was like, but it is not right that the Government should impose this burden and worry on him. People like him are being levied under this unfair tax despite the many options available to the Government to do otherwise. Shame on it for its unwillingness to take any of those options.

I propose to share time with Deputies Catherine Murphy, Tom Fleming, Thomas Pringle, Clare Daly and Joan Collins.

This Bill is similar in nature to the budget in that it lacks fairness. The Minister said this evening that those who are in a vulnerable position in society will be protected under its provisions. I attended a meeting in Wexford last night at which this measure was discussed and where I met many people who are not confident this will be the case. The Minister was also keen to emphasise the implications of a refusal to pay. People in this country are already frightened enough; there is no need to frighten them any further. It will look strange if judges are penalising ordinary people who cannot afford this charge when there is no record of any banker being fined. I recall being in court one day and seeing a woman who had stolen a pair of shoes from a large store, for which she was sentenced to three months in jail. However, if one manages to steal millions, it is called big business.

The household charge is a form of indirect taxation. Such taxes are unfair because they take no account of a person's capacity to pay. Unfortunately, this State has one of the lowest levels of direct taxation in Europe but one of the highest levels of indirect taxation. A recent report by TASC showed that the increase in the VAT rate to 21% absorbed 16% of the income of the less well-off, while the corresponding figure for those who are better off was 6%. Yet the budget increased the higher rate of VAT by two percentage points to 23%, thus increasing the disproportionate burden on those who are least well off.

The Taoiseach told us in his address to the nation that the Government would give people certainty by imposing no increases in income taxes. If one is making €600 per week and an increase in income tax leaves one with €540 or €550, there is a certainty in that. It might not be fair, but it is certain. When indirect taxation, such as VAT increases, there is more uncertainty because one cannot measure one's costs. The household charge is another unfair measure. In 2008, this country collected more money in indirect taxation than in direct taxation. It was screaming out to any fair-minded person that introducing a tax band of 55% for those earning over €100,000 would have brought in €750 million. This is almost equal to the figure of the social welfare cuts. I do not think those earning over €100,000 would be screaming if they had to pay a bit more tax on what they earn above €100,000. However, our Government has chosen to do things differently.

The ability to pay is a significant aspect of this household charge. The unemployment rate is 14.5% and the rate of long-term unemployment is 56%. People have to deal with household and credit card debt. There is no protection for pensioners and their fuel allowance has been cut. I am flabbergasted at the Government. I do not normally quote what has been said by the Government. One year ago, the Fine Gael Party recognised the need to raise more revenue from property "if we are to minimise the more economically damaging tax increases on jobs, enterprise and consumption". It further stated: "The Fianna Fáil-led Government proposal to introduce a steadily rising annual recurring residential property tax on people's homes is unfair for three reasons. The initial flat rate charge means that houses in standard neighbourhoods worth a fraction of some mansions would pay the same rate of tax. It would be difficult for asset-rich but income-poor households to pay, particularly the elderly and the unemployed. It would be deeply unfair in the case of a young generation that paid exorbitant amounts of stamp duty and VAT on the purchase of over-valued houses, many of whom now find themselves in negative equity." I ask if this is the same party.

This is called a household charge but it is a tax which is unfair and which will be quickly seen to be so. The county council system, established in 1898, has again been placed at the centre of this provision. The local authority system has suffered through a lack of reform. It was put in this same position in the early 1980s and irreparable damage was done at that time. The current funding of local government is provided by the Exchequer and the motor tax fund, which was ring-fenced in recent years. The quality of the local authority services is diminishing in recent years because funding has been reduced. The failure of this Government to even articulate the need for radical local government reform will contribute to the questions being asked by people as to what services will be provided by the payment of this tax.

I presume the equalisation fund will apply to the Local Government Fund in this case. The household charge will be collected centrally and the Local Government Management Agency will collect it. A certain element of confusion exists as to how this will operate and which body will send out the bills, but I will not deal with that matter now. The Local Government Fund included an equalisation grant and while I am not opposed to an aspect of solidarity, in areas of population growth such as the greater Dublin area, including the three surrounding counties, there has not been a fair allocation of services. For example, County Kerry has twice as many local authority staff as County Meath although its population is smaller. The same level of service cannot be delivered if the local authority is short-staffed. This measure will do nothing to address that issue.

People will ask why they should pay and what they will get in return for payment of the charge. This is a new property tax; it is a poll tax. It is fundamentally unfair because it does not differentiate between the ability to pay of a person living in a two-bedroomed apartment who is struggling to pay a mortgage and a person living in a very large home which is mortgage-free.

The EU-IMF programme did not commit to a household charge but it committed to a property tax. We need to define what is property. The view of many people is that they have no choice but to provide themselves with a home as there are few other housing options available. Many people do not regard their home as being a property. Stamp duty is a form of property tax which was paid on inflated property prices and this is not being accommodated in the exemptions. These people do not own property; they own debt and they are being asked to pay a property tax on debt. The charge of €100 may not seem a lot of money to some people but 15% of the population is at risk of poverty and the charge of €100 will cause serious problems for some families. The exemptions only apply to those living in local authority or voluntary housing or those who qualify for mortgage interest supplement — for which only part-time workers qualify — or living in a defined ghost estate, which might not include NAMA estates. Everyone else must pay.

I remember the Local Government (Financial Provisions) Act 1983 because I was in the forefront in the campaign of civil disobedience. In that period the Offences Against the State Act was invoked and water and refuse collections were denied. There will come a snapping point and this tax will be it. There is a big difference between having to make a conscious decision to pay a charge rather than a deduction from pay or from welfare payments. People will make an active decision which will be to resist.

The introduction of the local government household charge will only compound the plight of many householders who are already stretched to the limit to exist in any kind of reasonable comfort. Until the intended property tax levy on households and water tax in 2014, it seems this €100 household charge is only an interim measure. This charge and its implementation will set the standard for all future charges. We will certainly face a property tax and a water tax.

The Bill proposes an inequitable tax. Those living in the very basic and modest homes with low incomes will be forced to pay the same amount as the very wealthy with large homes. The old adage of the last straw breaking the camel's back comes to mind regarding this charge as the majority of householders can ill afford this further burden on their finances already strained to the very last. The past four budgets have dealt ordinary people several hammer blows and upwards of €30 billion has been taken out of the economy. In this deflated and depressed economy, householders are once more being targeted for the crimes of the bankers and speculators and the general mismanagement in governance in this country.

Debate adjourned.