Deputy Ó Snodaigh has possession.
Local Government (Household Charge) Bill 2011 [Seanad]: Committee Stage (Resumed) and Final Stages
We are dealing with amendment No. 2 and also with the section opposed by the United Left Alliance. Dúirt an tAire níos luaithe go bhfuil an locht ar an Rialtas deiridh. Dúirt sé gurb é sin an fáth gur gá don Rialtas an reachtaíocht seo a chur os ár gcomhair faoi dheifir agus faoi fhuadar. Dúirt sé nach bhfuil aon rogha eile ann. Bhí rogha eile ann, mar a dúirt roinnt Teachtaí a labhair romham. Tá rogha fós ag an Aire. Nuair a labhair mé ar an Dara Céim, luaigh mé gur féidir linn cáin rachmais nó cáin maoine a thabhairt isteach. Dá mbeadh sé sin á dhéanamh againn, bheimis fós ag déileáil go díreach leis an gcinneadh nó gealltanas a rinne an Rialtas deiridh. Bheadh cáin de shórt éigin ar shealúchas, tithe nó foirgnimh. Bheadh sé san áireamh go bhfuil cáin maoine i gceist. Dúirt an tAire, an Teachta Noonan, sa Dáil go bhféadfaimís breis is €500 milliún a ardú dá mbeadh a leithéid de cháin againn. Cáin forásach a bheadh i gceist. Bainfeadh sé leo siúd a bhfuil breis acu, seachas iad siúd atá ar an ngannchuid. Tá rogha ag an Aire. Bhí rogha eile aige. Nuair a toghadh an Rialtas seo, dúradh go ndéanfar iarracht athphlé a dhéanamh leis an IMF chun an cinneadh ar fad a athrú. Tháinig an Rialtas ar ais go dtí an Dáil ag maíomh gur éirigh leis ó thaobh an ráta úis. Níor lorg an Rialtas go mbeadh an tír seo saoraithe ón gcinneadh nó gealltanas a ghlac an Rialtas deiridh maidir leis an gcáin seo. Tá an deis sin fós ag an Rialtas. Bheadh sé an éasca dul ar ais chuig an IMF agus a rá go bhfuil an Rialtas ag iarraidh dul i dtreo eile. Ba cheart don Rialtas a léiriú go bhfuil bealach eile ann.
These amendments capture the essence of the argument I have made that people dependent on social welfare will be hit hard by this Bill as drafted. It would be reasonable for the category of houses listed in the amendment to be exempted from the charge. Other houses should also be included. Several years ago, we passed planning regulations which set down a minimum space requirement for new houses. Any house that falls below that certain square footage should be exempted. There are also homes with minimum maintenance standards. It is obvious the owners do not have a bean. If they were able to save the €100 on the charge, they could carry out some maintenance on their homes.
Some houses are not serviced by their local authority. For example, water could be drawn from a well or sewage treatment may be provided through an on-site septic tank. In some instances, the local authority may not even provide the roadway to the house. While I accept a high number of homes are not affected by this, those that are should be exempted.
Houses in ghost estates will be exempt from the charge. There are places, however, where one half of an estate is not taken charge of and the other half is. What happens when the good half is at the back of the estate and one has to go through a wasteland of rag order roads and so forth to get to it? What about apartment blocks which are half occupied? These categories should also be exempted.
Those on rent supplement will not be exempted from the charge. Some providers of social housing, such as ALONE, recently changed their payment arrangements with their residents. Instead of the residents paying a differential rate, rent or contribution, they applied for rent allowance and now pay it to the social housing organisation. Will ALONE now have to pay €800 on household charges?
It is excluded.
It is excluded provided it is social housing. However, if it requires its tenants to apply for rent supplement, will it be covered by the provisions for exemption?
I support this amendment.
The Minister of State has pointed out the categories of household which will be exempt from the charge. However, there are still many left out who will not be in a great position to pay it. The amendment will include those who bought a house from 2003 on. It should actually go back to 2001.
Instead of the Government imposing a household charge on the 450,000 unemployed, it would be better off cutting their welfare benefits by an equivalent amount. The Government was adamant that it would not touch welfare payments but it might as well as it is hitting it indirectly with this charge.
Life is difficult enough for those on disability benefit without this extra tax being imposed on them. If the Government insists it has no choice but to do what our masters in Europe want us to do, I do not see how they can shoot the Government if it applies a greater level of fairness extending exemptions to those in negative equity, the unemployed and those on disability benefit and other assistance. If the Government had applied a greater level of fairness, it would not have this animosity towards this Bill.
Earlier, Deputy Mathews of Fine Gael made an interesting point that this country should make a protest by withholding €250 million from one of the bailout interest commitments. He reasoned this would signal to the IMF-EU-ECB the unhappiness of this country with how it is being treated. What the opponents of these household and water taxes — United Left Alliance and other Deputies — are proposing will, however, be a far sharper and clearer message to the IMF-EU-ECB that the Irish people are simply not going to accept any more massive cutbacks in their services and living standards to bail out the financial sharks in the EU market.
Accordingly, any Deputy who wants the voice of the ordinary people of Ireland to be heard should support the boycott campaign of the registration and the payment of this household tax. It will send a clear message to these overlords, representatives in reality, of the European speculators. Come the end of March, more than 1 million households taking such a stand will rock them and make them wonder if they can continue to see our people as a soft choice to bail out this crazed market system.
These amendments should be supported. If the utterances of both Fine Gael and Labour Deputies are to be taken seriously, then they will vote with these amendments. Amendment No. 2 calls for several categories of houses to be exempted, including those affected by pyrite. I was rather taken to see the Fine Gael Member, Deputy Regina Doherty of Meath East — whose acquaintance, unfortunately, I have not had the opportunity of yet making — calling for homes affected by pyrites to be exempted from the household tax. Can we invite her, along with any other Member opposite who agrees with her just contention, to vote in favour of this amendment?
I was alarmed to hear one of RTE's main political correspondents report on the news this evening that Ministers were reporting that they were not getting feedback from Government backbenchers that the household tax was an issue in their constituencies, which is extraordinary. Either they are not listening or they are not relaying the messages they are getting. Just in case they have not got the message, we should ensure that in the next month or so, they are left in no uncertain state of mind with regard to the huge opposition that exists to this tax in order that they will go to Ministers and relay that this is a huge issue on which people up and down the country will take a stand. That will happen in the campaign that has been set up and that will be intensified.
The Minister of State and others rounded on us in regard to having no alternative but they are not listening. The United Left Alliance, for example, brought out a budget statement and, with hard facts and figures, we pointed out that on the basis of information compiled by the Central Statistics Office and the giant international finance company, Credit Suisse, on how wealth is apportioned in this State, the conclusion is that 5% of the wealthiest have 46.8% of the wealth in financed and other assets, not including their homes, worth €219 billion. We suggested a modest wealth tax of 5%, which would bring in €10 billion. That is the alternative to hitting those who are suffering as a result of this crisis and those in negative equity with mortgage commitments that are a terrible burden on them every month as a result of being victims of the blackmail of the speculators in the housing bubble and hitting people generally. That would result in significantly more resources for locals authorities to improve services rather than what is happening where fewer workers are expected to meet more burdens, which is not sustainable.
When we oppose this tax, we are, at the same time, proposing a tax on the wealth that exists in our society. This tax would make a huge difference to public services and investment in jobs and it would regenerate this broken economy, which is the only way we will get out of this hole. The problem is when the Minister of State attacks us for opposing this tax by saying it will cost jobs in local authorities, we cannot take him seriously because the Government's policy, following that of Fianna Fáil and the Green Party, to cut, slash and burn the living standards of our people has ratcheted up unemployment to such a disastrous degree. Sadly and unfortunately, more austerity means more unemployment. When we oppose this tax and demand an alternative to raise far more funding, we are the champions of job creation.
While we will continue to oppose this tax relentlessly, if the Government and the backbenchers who contributed to the debate were serious when expressing concern for those who might be in difficulty, they should at least agree to the extension of the waivers and the exemptions proposed in the amendments. We can give many more examples of exemptions that would be natural if the concern of Government backbenchers was real. They can vote in favour of these amendments and, at least, make the tax less of a burden on a certain strata. We will support these exemptions while continuing to campaign for the removal of the tax completely.
Before the debate adjourned earlier, the Minister of State outlined that the €160 million this tax will generate will fund local authorities and give them greater choice. The implication of what he said was that local authority members would have more autonomy. Last week's budget put paid to that because it proposed a cutback of €165 million from the Local Government Fund. This proposed poll tax will be collected centrally, redistributed by the Department among the local authorities, which means there will be no connection between the local authorities collecting the charge and how it is redistributed. It is simply a means of moving money around.
The €165 million reduction in the Local Government Fund is being used to pay the interest on the bank bailout loans for the coming year and if this tax gets off the ground, it could be used the same way in future years. I fundamentally object to that because it means the Government will collect a bank tax off householders locally under the guise of a household charge, deposit it in central funds, cut the funding to local government, move the money to pay the bank bailout loans and use the revenue from the household charge to fill the hole. This is a flat tax and applying the same charge to the poor and to millionaires is a problem.
The propaganda line has been that the tax equates to less than €2 a week. Mr. John FitzGerald of the ESRI — the Government takes a great deal of advice from him and his colleagues — is reported to have said that there is no reason the charge could not be as high as €1,300 per annum. Perhaps he will want to deny that but he has been reported in one publication as saying that.
With regard to the manner in which the charge will be levied on different types of houses, bed-sits have been instanced. The response is that the landlord will pay it but that raises two problems. If the landlord pays it, he will recoup it from the unfortunate tenant. If a widow, for example, lets a room in her house to supplement her income, she will face two charges once it is a separate unit. In addition, no allowance is made for the tenant purchase scheme.
The Minister of State asked for alternatives for savings. Yesterday evening, I proposed that the numbers and salaries of senior local authority officials could be cut. Reference has been made a number of times to the fact that up to a few years ago, a county manager, county secretary and county engineer ran the show. Smaller local authorities are much more top heavy than that. That needs to be addressed along with the rates of pay. They all earn more than €100,000 annually.
Every time the Minister of State asks for alternatives, I respond with my party's proposals. We have put forward budget proposals which are perhaps more modest than those of the United Left Alliance but, nevertheless, we proposed a wealth tax and other taxes which would not impact on those earning below €75,000, who will be hit most by this charge. They are the people we need to try to protect. We need to make choices.
Amendment No. 10 includes a list of groups on farm assist, old age pensions, non-contributory pensions, blind pensions and so on. We included these because if the Government is going to push this through, it might at least accept the amendment and not punish those people. We also include all houses vested in any Minister of the Government. This is for good reason given there are people in Army quarters and similar accommodation. I appeal to the Government side of the House——
To be helpful, they will be exempt.
That is good. However, many other categories will not be. I appeal to the Government to accept the list of exemptions regarding people on low incomes and social welfare to take them out of this position.
The context is that this is the fifth budget which has brought in severe austerity since the emergency budget which, if I recall correctly, was at Easter or perhaps in May 2008. There has been a succession of these budgets, all of which have taken money out of people's pockets and added extra VAT and increased charges in ways over which people have no control. In this case, the Government is asking people to put money into an envelope or to walk into a local authority office, for which they will be charged an extra €10 to pay the fee, as I understand it. There is a very large section of the population who will simply not do it, and another large section who cannot do it because the Government has skinned them and gone as far as it can go with them. The budget last week was the last straw. They have gone over the edge and simply will not pay this.
To pick up on some of the points that have been made on all sides of the House, Deputy Joe Higgins referred to an earlier contribution I made, as did Deputy Niall Collins. Deputy Niall Collins mentioned that Mr. A. J. Chopra observed that what is important for Ireland in its programme is to achieve the elements on the bottom line and it is within our own power to work out the choices to get to that bottom line. What Mr. Chopra also said when he was here at an economic conference in Kerry in the late autumn was that it can be argued that the legacy debt in the banks in this country is debt that needs to be restructured and written down, more or less.
We would agree with that.
That is why, to get the concentration and the thrust to act to that end, it is important at every opportunity to get the concentration of the minds of the people who make the big decisions in Europe and the ECB. The way to get their attention is to do as I have suggested, which is not to renege on or default on but, to get their concentration, to withhold 0.25% or 0.5% of the quarterly or monthly interest charges on the emergency liquidity assistance. This should be done because that emergency liquidity arose as a result of senior bondholders being paid in full when there was no acknowledgement of the scale of bank losses in this country.
I know that is a fact because I spoke to the European Council President, van Rompuy, about five months ago, and he admitted he had not been aware that as much as between €70 billion and €100 billion of bank loan losses had arisen in a period when €70 billion to €75 billion of senior bondholders had been redeemed in full. That brought a new complexion to the situation in which the banks now owe the Central Bank of Ireland and the ECB a total of approximately €150 billion.
Should we hold back on the Anglo bonds next January?
My professional advice would be "Do not pay it. Have a discussion." That is my personal, professional advice.
Did you hear that, Minister of State?
Sorry, Deputy Collins, speak to me. I am talking personally.
Deputies should speak through the Chair.
I beg your pardon. It is important because the banks have not got the money to pay that bond.
The country does not have the money.
No, the banks owe the bond redemption. They have not got it. Why would they borrow to pay something they cannot pay back? That is an invitation for discussion. That is why it is important just to pause. When we pause, we do not actually default on a debt. When we ring up the bank and say we want a discussion, that is not a default, it is a discussion.
Thank you, Deputy.
I want to add a few points. There are two imperatives at present. One is the crisis in the eurozone. We are missing the big crisis. Every country is in its own compartment on the Titanic while we are all sailing towards an iceberg. There is a shadow banking system as well as the obvious banking system of which we are all aware. The shadow banking system is connected with the Wall Street and investment banks and their subsidiaries, most of which are in London, doing business, which is re-hypothecation of funds and assets which are used as security for loans and doing business, with gearing of four, five and six times. London is the least regulated place in the financial world for carrying on this business. In fact, in the United States re-hypothecation is restricted to 140% of the original hypothecated assets.
I do not want to get into technicalities. There is an article in Thomson Reuters dated 7 December — only last week — which explains this in the microcosmic example of MF Global, which failed and left its clients out to dry for $1.2 billion. It is a microcosm of what could happen on the macro scale. The banks of Europe are extremely fragile. Deutsche Bank has a leverage level of about 52 times, which is higher than Lehman Brothers was. JP Morgan has off-balance sheet exposures under these re-hypothecation liabilities of about €500 billion. It is these sort of figures in the greater architecture of the financial world that are mind-bogglingly risky at the moment.
The eurozone needs to make sure the ECB or whatever institution can do it — I think the ECB can do it — has probably at least the size of the eurozone's GDP — €8 trillion or whatever it takes — to provide the liquidity to the system. If not, there could be a surprise bank failure anywhere in the system and, because there is so much off-balance sheet exposure by banks, related investment firms, primary dealers in Wall Street and so on, nobody knows where the explosions could occur. That is why it requires leadership, statesman-stature leadership, in Europe at present to stop the noise, the phony summits and the phony meetings that are taking place. I use "phony" in the sense of noisy voices. The origin of the word "phony" is voice. That is why it was called the phony war before the Second World War. There were voices everywhere, documents, administrators, meetings and more meetings. Now, we need action so that confidence and trust is restored.
People holding paper do not know what to trust. People say "Buy gold". However, if one does not physically own the gold, who says the paper a person is holding is any good? It is the same with sovereign debt. Germany is the largest and strongest economy in Europe at present. Ironically, two of its banks are extremely fragile. Deutsche Bank has assets of €1.85 trillion, which is nearing 80% of the entire German GDP. The House will remember we were all frightened that our banks were five times larger than our economy. Everybody at a responsible level in politics and leadership needs to snap out of it and get down to doing what is needed. Intergovernmental treaties and agreements can be worked out over the coming months.
By the way, we should not be frightened of sharing responsibilities and mutual accountability. For instance, in all the airports of Europe there is a common standard of safety in air traffic control, take off and landing. That is what we want in fiscal behaviour. Of course, we want Governments to keep to balanced budgets. Of course, Ireland should have the right to visit and see that the German Government is behaving in drawing up its budgets as much as it has to come and see what we do. Let us get real. Medications are sold in pharmacies all around Europe and we trust that the standards that we are used to here apply also in Rome.
Europe is an important large community of people with different traditions, different languages, different mentalities and different ways of viewing the world and they all are very worthy and we should value them. We should ensure that whatever the framework, the architecture, the plumbing——
Deputy Mathews, we are a little tight on time.
I am sorry, I beg Deputy Boyd Barrett's pardon.
I am loth to interrupt the Deputy but there are four Members who wish to contribute.
I beg the Leas-Chathaoirleach's pardon. Anyway, the Members get the idea. We can concentrate the minds of the leaders of Europe by doing things like catching their attention.
Deputy Mathews should vote against this now and start the ball rolling.
I call Deputy Maureen O'Sullivan.
That is the fact. Talk is all very fine.
It is the big picture I am voting on.
There are four Deputies offering.
I will return to the micro from the macro, where we were for the past while, merely to make the point that this budget hits certain persons severely and totally disproportionately to other sections of society. I consistently state and totally believe that persons with disabilities, persons with mental health issues and their carers should be sacrosanct when it comes to budget time and they should never have an additional worry or stress that anything will be taken from them or add to their particular burdens, and that is the purpose of my amendment.
In the past couple of days, I visited three different DEIS schools in Dublin schools which, if the proposals are given effect — it appears from the Minister for Education and Skills that they will — will be totally decimated. They will lose large numbers of teachers, more than any other school in the country. They will lose the resources that have made such a difference to those young children and that have brought them nearly onto a level playing field with others so that they can realise their potential.
Many of their parents are carers. Many of them depend on family income supplement. One gets to the point where there is only a certain amount that one can get out of a social welfare payment and it is impossible to expect an additional payment to be taken out of that.
These are people with limited means. They are being hit totally disproportionately with what has been happening in the budget. They definitely need to be exempted and I hope that amendment is supported.
I listened with interest to Deputy Mathews. Of course, we need leadership and we need shared responsibility, but we also need fairness. Certainly, this household charge Bill is not based on fairness.
I support the amendments from this side of the House, particularly that from my colleague, Deputy Niall Collins, which calls for the exclusion of those who are on jobseeker's benefit, jobseeker's allowance, supplementary welfare allowance, family income supplement, farm assist, disability allowance, disablement benefit and blind pension and those who are not in a position to pay their mortgage.
We speak of ordinary persons on low incomes. There is something blatantly unfair with a system where there are millionaires and wealthy persons who will pay the €100 charge yet those on social welfare are asked to do the same. I live on an estate in Enniscorthy where probably half of the residents have lost their income from jobs in recent years, and yet they will be asked to pay €100 the same as myself or others in that estate who are working. That is a situation at which the Government Members on the far side of the House must look seriously. They must consider the exemptions we have asked for here. The backbenchers on the other side spoke much about fairness and equality, but certainly this household charge Bill is not in that area. I would ask the Minister to reconsider the situation and to look seriously at exempting those whom I have outlined.
On a daily basis, there are people coming into our clinics who are unable to pay their mortgage. Some are prepared to hand back their houses to the mortgage companies because they are not in a position to pay the mortgage, yet we are also asking these people, some of whom might be getting supplementary welfare allowance, to pay the €100 charge. This is also totally unfair and unwarranted. I would support the amendments from this side of the House.
The list of categories that we are seeking in these amendments to have excluded from the charge are unanswerable for anybody who claims to be even vaguely interested in fairness. Unless somebody on that side of the House in the Government will tell us soon — I would like to see the Minister of State, Deputy O'Dowd, nod his head and state that I am absolutely right and that the Government will agree — they are, in fact, exposing the truth about this charge. With all the talk about fairness and how there will be exclusions for the small number of categories that the Minister has decided to exclude, if he does not exclude these categories then the talk of fairness is rubbish.
How could the Minister possibly not exclude the 350,000 who have lost their jobs through no fault of their own over the past three years? Is it not bad enough that they have lost their jobs through no fault of their own, through the behaviour of gamblers and bondholders, developers and politicians? Is it not bad enough that they must suffer that ignominy of unemployment with little prospect of recovery anywhere close on the horizon, and that their children are leaving the country? The Minister states that it is okay to load another austerity measure on top of them, as well as hitting various other payments, in the budget the Government has just passed and in the social welfare Bill, that they would receive and that would bolster their income, which is miserable compared to what they would have enjoyed when they were working hard, as they want to be, and contributing to society. How can the Minister not exclude anybody who has lost his or her job?
How can the Minister not exclude those on family income supplement who are at the lowest level of income? That is why they get State support. How can the Minister not exclude those with a disability? How can he not exclude State pensioners? How can he not exclude those who are in negative equity because of the behaviour of reckless bankers and developers? How can he not exclude those on medical cards? The reason they are on medical cards is because they do not have enough money to provide for their health care. If those groups do not deserve to be excluded from this household charge, then it is an attack on those groups. There is not other way to describe it. It is quite obscene.
Of course, the reason the Minister of State is not nodding his head and is not giving the commitment is because even the groups that the Minister has excluded have nothing to do with the Government's desire for fairness but have everything to do with trying to pull a con trick on the public as to the real nature of this charge. Just as they did when they supported bin charges where they brought in the waivers at the beginning to try to soften people up to try to disorganise and undermine the legitimate opposition to the bin charges, after a few years the waivers disappear. Everybody out there knows that is what will happen here. It is merely a ruse. It is merely a tactic. It has nothing to do with fairness. It is about playing games with people. It is about the same cynical politics, which has wrecked this country and which has infected and corrupted the political culture. The Minister thinks it is okay. He thinks it is funny. He thinks it is tactical to play games with people, pretending that there will be some element of fairness when the intention is nothing more than to get the foot in the door for this charge, and then for the water charges, do away with the waivers and ratchet up the charges as the years go by. That is the intention. Most members of the public know this. It is very important that it be said loud and clear; otherwise the Deputies would not vote with us on the amendments.
This issue turns on the question of fair taxation, and the Minister of State and Government know this well. They keep wringing their hands saying they do not like what they are doing and wish they did not have to do it. They say the troika made them do so. It is obscene that this measure is in the troika agreement and that the Government is doing its bidding to pay off the bondholders. Notwithstanding its ridiculous, pathetic decision to capitulate to the troika, there are alternatives, and these have been spelled out.
Why will the Government not be honest? Deputy Joe Higgins referred to the wealth tax and I will not repeat the point. Why is it never complicated to attack the poor, vulnerable and least well off and why are we always told it is too complicated to tax the wealthy? It is stated that while the latter approach might be fair, it is just not possible. I do not understand this. Perhaps the Minister of State could explain it to me.
Could the Minister of State explain why the 10,000 highest earners in the State who, according to the Revenue Commissioners, earn an average of €500,000 per year, or €6 billion between them, paid less than €2 billion in tax? This represents an effective tax rate of 29%. Even if it were increased to 39% — I would be in favour of increasing it to at least 49% — it would yield €1 billion. Is €250,000 or €300,000 per year not enough for these people? Do they honestly believe it would be unfair to take from them the €160 million the Government is choosing to take from the poor and vulnerable? Could they not afford it? Could they not manage on €250,000 or €300,000 per year? Is it that difficult to live on that money? Could the Government not go after some of the former taoisigh and Ministers who have left the Oireachtas with annual earnings of €145,000, in spite of their not having reached retirement age? This is unbelievable. When David Cameron resigns, he will receive £32,000 as a former Prime Minister. Two of our former Prime Ministers walk off with €145,000 each per year. Why does the Government not go after them? Why is it so difficult? It is a question of whether the Government is committed to fairness or cynical bogus tactics to pull the wool over the eyes of the least well off and most vulnerable.
I agreed with Deputy Mathews's analysis but his one problem is that he does not recognise that the troika and Government will not listen to him because they do not care. They have made a cold, calculated decision that working people and the poor will pay for the crisis of the bondholders.
I want to put the record straight on the bin charges. They were introduced by those on the other side of the House when in government.
They were introduced in 1983 by Fine Gael and Labour.
The Deputy will have her opportunity to speak. She left the meeting earlier today when we were discussing the septic tank charge.
I left it in good hands.
It is a bit rich of her to come in here and contradict me today. I note there is a spilt in the Technical Group but that is its own business.
I agree with Deputy Mathews that we need more time for serious debate in the House, particularly in these extraordinary times, on issues that concern people. Politics is all about people, engaging with and listening to people and bringing forward policies in their best interest. Politicians are the servants of the people and are elected by them for their betterment.
I am annoyed and disgusted by the decision to guillotine this Bill. I have put this on the public record previously. The guillotine has precluded many Members from making a contribution on Committee Stage.
Yet the two Deputies are voting for it.
The same was the case with the Water Services (Amendment) Bill. I do not understand why we rush legislation in this House. While I am part of the Government side, I have made my views known at public parliamentary party meetings etc. This time, the lead-up to Christmas, is a most unfortunate time for dealing with these Bills.
The country is in a serious financial situation and we need to consider the contractual agreements to protect the very rich at the expense of the most vulnerable. I refer to the many politicians who have retired on extraordinarily high pensions. This has angered the public right across the country. We need to tackle the disgraceful pensions and we need legislation to lower them to an affordable level. These are extraordinary times and we need quick and drastic action.
Deputy Stanley referred to the Local Government Act 2000, which created well-paid positions within the public service. When I was honoured and delighted to be elected to Longford County Council in 1985, I worked in the best interest of the people, and I continue to do so as a Deputy. In 1985, there were three responsible people, the county manger, county engineer and county secretary. When one made representations on behalf of constituents at the time, one was told whether something was achievable. Nowadays, the directors of services and such staff are on huge salaries and one must wait months for a decision. This is because one's query goes around in circles beforehand. The concept of better local government has not worked for the betterment of the country.
We need to consider this matter. The Minister of State needs to consider those in mortgage arrears. Some sort of waiver scheme needs to be applied for them and those in the shared ownership scheme. The disabled and most vulnerable——
Voting for amendment No. 2 will be no problem to the Deputy.
——have extra costs. While I will not vote against my Government, I plead with the Minister of State to consider the case of people with disabilities because they face hidden costs that able-bodied people do not. Some concessions should be made for them.
Will the owner or the occupier of a house be liable to the tax?
Who will collect it? We hear about agencies and quangos. Will collection be the responsibility of the local authority and will the funding collected go back into local communities to service them? Local authorities do a great amount of good work. Every day when we leave our houses——
Did the Deputy read the Bill?
——we see the extraordinary work done by local authorities. A percentage of the funding, if not all, should go to local authorities.
The Minister of State will respond in due course.
While Deputy Mathews spoke quite eloquently about the crisis in Europe, I remind people about the crisis in ordinary Irish households. I am speaking about middle income groups who cannot pay any more. What is it about this that the Government does not understand? It would do well to consult Social Justice Ireland but Ministers did not even give that organisation the courtesy of responding to its pre-budget submission. It could also speak to St. Vincent de Paul, which is dealing with increasing numbers of middle income families in financial crisis. The head of St. Vincent de Paul in Waterford told me that people do not even have €2 to spare at the end of the week.
It is offensive that Fine Gael is continuing Fianna Fáil's budget mantra by claiming the increase equates to €2 per week. Fine Gael Deputies must not be listening to the people who visit their advice centres to explain that they are strapped and do not have any more money. Enough is enough.
I will not rehash what my colleagues have said about where the money can be found. Households with incomes of more than €750,000 became 5% richer last year. Billionaires got richer. Those who earned more than €150,000 got richer. There were reports in today's newspapers about people who have not bothered to pay their taxes. None of them will be brought to court. We have given ten tax exemptions to people in this country. Millionaires and billionaires have thumbed their noses to successive Governments. Individuals who fail to pay for their television licences or fall into arrears on their rent can be brought to court but somebody else can say to the Exchequer, "Eff off, your are not getting the €200,000 I owe you" and nothing will happen.
I am offended by the absence of Labour Party Members from the Chamber but I am not surprised because they are unable to face up to injustice. Their party has a simple legacy. It was the first to introduce water rates and cut off people's water. In Waterford, thugs came in to cut people's water supplies and they were offensive to women and children until they were physically driven out. Now it is the first party to introduce household charges. At least some Fine Gael Members are present. I might not agree with them but I respect them for fighting their corner. Both Deputies present appear to be at one with us on some of our amendments. They can easily follow the former Labour Party Deputies over here because we will make room for them if they want to vote against the Bill. They will always be welcome.
The Government should stop claiming that the tax will only cost €2 or €5 per week. St. Vincent de Paul dealt with 150,000 cases in Dublin this year. The Government could ask how many of those cases involved middle income groups and working people. In Waterford, Wexford and other areas it is primarily dealing with working people who are letting everything else go to pay their mortgages. That €2 means a lot to those who do not have a penny. I appeal to the Labour Party Deputies who are sitting in their offices around Leinster House to stand up for the working people that James Connolly taught them to defend.
The Minister of State believes this charge will result in greater accountability in county councils. That is the opposite of what will happen, however, because rather than introduce the exemptions suggested by my colleagues he holds out the possibility that discretion will be allowed in county councils. From my experience, I expect that will mean councillors who do not point out their local authority is wasting money hand over fist will be rewarded when they seek exemptions on behalf of individuals on high incomes. There will be a massive benefit for the Government because its Deputies will be able to contact their local councils to tell the people who depend on Government funding that Mr. Johnny Something cannot afford to pay the charge even though he earns €100,000 per year. There will be less accountability, councillors will be bought off with favours and the council will be terrified to refuse the hand that feeds it.
I thank the Deputies opposite for the variety of their contributions. I listened to them with great interest. The estimates prepared by my Department regarding the number of people will not be paying this charge indicate that the number of local authority, voluntary and co-operative housing tenants comes to 155,000; ghost estates, which are mainly in category 4 but also category 3, account for 32,000 households; and 18,000 people are in receipt of mortgage interest supplement. Approximately 205,000 tenants will be exempted from this charge. These figures make it clear that a large number of people will be exempt.
In regard to Deputy Luke ‘Ming' Flanagan's comments, section 12 vests specific powers in the local authority manager in exceptional circumstances.
That is what I am worried about.
It may be helpful to the Deputy if I explained how the measure will be interpreted. A national directive would be necessary to set out what can or cannot be taken into account when offering exemptions. The same rules would have to apply to every manager. I presume this would be a reserved function for the manager and the council would not make the decision. This power is comparable to that of the Revenue Commissioners in regard to reducing tax bills.
We spend €80 out of every €100 that comes into this country on education, health and social welfare. The social welfare budget is approximately €20 billion per annum and more than 400,000 people are unemployed. The State is taking in €16 billion less annually than it was at the height of the boom. We are in a difficult position but we have made it clear that we expect the charge to apply for approximately two years.
We will be bringing in a property tax. The Minister, Deputy Hogan, will establish an expert interdepartmental working group early in the new year to design a property tax that is equitable and builds on previous work in this area. The group will consider the modality of a property tax, including its scope, assessment criteria, exemptions and waivers and the means by which it should be collected. There will be opportunities for input into the group's deliberations and the Minister has asked it to report back to him by mid-2012. The tax will be levied according to an individual's wealth, property portfolio and income. I expect the Members opposite to support the property tax given that it will be based on principles of equity and ability to pay.
There are a few other Deputies who wish to speak.
I just want to reply to some of the amendments.
I will call other people then.
I appreciate that the problem is time. I would like to talk about the issue of pyrite, which was raised by a number of people. The Minister for the Environment, Community and Local Government, Deputy Hogan, has already taken appropriate measures to address problems arising from the presence of pyrite in hardcore material under the concrete ground-floor slabs in housing developments. In September, the Minister set up an independent panel with the remit of seeking to facilitate a resolution of the issue of pyrite contamination in private housing. The panel of three persons has the requisite blend of experience and technical knowledge to address this very complex issue. The panel has commenced its work and is, I understand, currently meeting with a broad range of key stakeholders who can assist it in undertaking its task. The Minister has asked the chairperson to report to him early in the new year, and the report will be put in the public domain.
I understand the difficult and challenging situation faced by householders who, through no fault of their own, must contend with the consequences of pyrite in their homes. The Minister will further consider a waiver for certain pyrite-affected houses upon receipt of the report of the independent panel. He will also need to consider issues with regard to the identification of problematic properties and the appropriate operational mechanisms and administrative arrangements required. However, it must be clearly understood that responsibility for compliance with the building regulations rests with the building owner and/or the builder or developer who carries out the works. The State bears no liability. This position is supported by the outcome of the recent High Court case in which a quarry which supplied hardcore for a construction project was found liable for the supply of defective pyritic material. The case is now under appeal to the Supreme Court.
I am in the hands of the Leas-Cheann Comhairle. There are many amendments to which I have not yet responded. In fairness to me and to everybody, I would like to do so.
Deputy Collins indicated that he had a question.
The Minister has covered it in his discussion of section 12.
I thank the Leas-Cheann Comhairle for that. In a democracy, it is our job to listen to what everybody has to say and then sum up at the end.
The household charge as proposed under the current Bill is forecast to raise approximately €160 million on full collection, and any significant reduction in that amount would have significant implications for the level of services that local authorities can provide to their communities. In order to meet this funding requirement while ensuring that the household charge is set at the lowest possible level, it is necessary both to have a broad-based liability for the charge and to keep the administrative costs associated with the collection of the charge to a minimum.
The Bill provides for a number of exemptions to the household charge. The Government considers, in conjunction with the waivers provided, that these are sufficiently broad and will exclude those households in particular difficulties from the ambit of the household charge. The proposed exemptions are as follows — properties that are part of the trading stock of a business and have not been sold or occupied or been the source of any income since their construction; properties vested in local authorities or voluntary or co-operative housing bodies for social housing, as making such properties liable would lead to a circular flow of income and be unnecessarily bureaucratic — this is relevant to the point made by Deputy Ó Snodaigh; properties owned by a Department 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 non-principal private residence charge, it is intended that this charge would operate as an alternative to commercial rates, with properties liable either for commercial rates or for the household charge if they are domestic properties, but not both; properties whose owners have been forced to vacate them 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 properties owned by charities.
In addition to these exemptions, two important waivers will apply. The Government proposes to exclude from the household charge households in receipt of mortgage interest supplement from the Department of Social Protection. This waiver is expected to apply to 18,000 households. The Government also intends to provide a waiver for households in certain categories of unfinished housing estate. The Minister for the Environment, Community and Local Government will set out in regulations to be made under the legislation the list of the unfinished estates to which the waiver will apply. There will be total transparency about the names and locations of these estates. This waiver will benefit residents of these unfinished estates as they work with stakeholders in implementing resolutions for these problematic developments.
It should also be noted that under the Bill, liability to the household charge will not apply to the following groups: 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 or those living in housing provided by voluntary or co-operative bodies; persons living in housing vested in the HSE or a Minister of the Government — somebody mentioned the Department of Finance; homeowners who have been forced to vacate their properties by reason of long-term mental or physical infirmity and are now living in properties they do not themselves own; households in receipt of mortgage interest supplement; homeowners residing in certain unfinished housing estates; and those residing in properties owned by charities or discretionary trusts.
While I accept that the introduction of the household charge is an additional cost to households, I remind Deputies that those liable to pay the charge will have the opportunity to do so in instalments of €25, four times throughout the year. I also point out to Deputies that expanding the number of exemptions in the manner proposed in the amendments they have tabled would leave no option but to increase the quantum of the charge in order to raise the revenue necessary to abate the reduction in Exchequer resources to local government.
In his Budget Statement, the Minister for Finance, Deputy Noonan, announced that for first-time buyers who purchased their homes between 2004 and 2008, the rate of mortgage interest relief will be increased to 30%. He also announced that for individuals who purchase homes in 2012, enhanced rates of mortgage interest relief will be applied at the rate of 25% for first-time purchasers and 15% for other purchasers. This will act as a further boost to those first-time purchasers who took out mortgages in the housing boom years.
I thank the United Left Alliance for its proposed amendment on income thresholds for the purposes of exemption from the household charge. I am heartened to see the income levels at which Deputies who purport to represent those who are most in need in our communities propose exemption from the household charge. Sinn Féin has suggested, in amendment No. 5, that those with incomes below €75,000 — I repeat, those with incomes below €75,000 — should be exempt from the household charge, while the United Left Alliance has pitched its proposal at a mere €150,000, or just twice that proposed by Sinn Féin.
Yes, because of our income tax proposals.
The Deputy has the Independent allowance. It makes up more income for him.
This is the heart of the matter.
He will have the pension as well — all the better.
Tá nóiméad amháin fágtha agam.
They are getting €20 million for five years.
Allow the Minister of State to continue, please.
I am nearly finished lads.
This is to finish at 10 p.m.
It simply beggars belief that Deputies could suggest——
Deputy Higgins will have a pension as well. A European Parliament pension.
A sum of €20 million for Fine Gael Deputies.
——that those in most need in our communities would be on salaries of up to €150,000. Let us get real. I urge the Deputies to withdraw the amendments. It is just ridiculous.
The exemptions to the household charge, taken together with the waivers contained in the Bill, provide a reasonable level of protection for those in greatest need in our communities. As such, it is not proposed to provide for additional waivers or exemptions and, accordingly, I cannot accept the amendments proposed by the Opposition.
As it is now 10 p.m. I am required by an order of the Dáil of this day to put the following question: "That in respect of each of the sections undisposed of, the section is hereby agreed to, the Title is hereby agreed to, the Bill is accordingly reported without amendment, Fourth Stage is hereby completed and the Bill is hereby passed."
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