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Dáil Éireann debate -
Tuesday, 19 Jun 2012

Vol. 769 No. 1

Local Government (Household Charge) (Repeal) Bill 2012: Second Stage [Private Members]

I understand Deputy Stanley is sharing time with Deputies Mac Lochlainn, Ó Caoláin, Colreavy and McDonald.

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

Sinn Féin opposes the Government's household charge. We opposed the charge when it was first introduced last December and we continued to campaign against it. We believe the charge is unjust and unworkable. It will lead to financial crisis in local authorities and will bring further hardship to low and middle income families.

The charge is grossly unfair as it penalises those on low incomes. The millionaire will pay the same as pensioners and the Taoiseach will pay the same as lone parents, who have had their benefits cut.

My party believes that the household charge is a double tax and should be resisted and we continue to support those who resist it.

The household charge was introduced because the Government cut funding to local authorities. The funding was taken from the Local Government Fund and redirected for other purposes, such as bailing out the banks.

To raise the €160 million needed for local authorities, a charge of €100 was imposed on people's homes. It was a cheap and nasty move by the Government, which promised so much only nine months before it introduced this charge.

This, of course, led to a massive campaign against the charge. My party participated in peaceful pickets, protests and mass meetings the length and breadth of the State. Even today, six months on, and despite the bully-boy tactics, households still remain committed to overturning this charge.

Sinn Féin has taken a positive leadership role during the campaign against the household charge. We did not go for the populist rhetoric of simply demanding people should not pay and then leaving them high and dry. We felt it was not our role, as political activists and elected representatives, to tell neighbours or members of the public what to do, or to make promises that simply could not be fulfilled.

As a political party, we are not in a position to pay for court appearances or to contribute towards them, and others should not mislead the public on that. Instead, we clearly outlined to the public that we were absolutely committed to overturning the household charge and we would work with communities to bring pressure to bear on those TDs who voted for this charge and to ensure the heat of public anger would bear down on those TDs.

The introduction of this Bill is part of this campaign. TDs who voted for this charge must feel the consequences of their actions. This is particularly true of the Labour Party, which promised to defend working families and protect against welfare cuts, but which, unfortunately, has strayed away from the vision of Connolly only to become cheerleaders for the right-wing politics of Fine Gael.

To the Labour backbenchers I say the following: the public who elected them are sick to the teeth of hearing that things would be worse if they were not in government and the conscience of the Government. To be honest, for many thousands of families up and down the country, things could not be much worse. It could not be worse for families who have seen their loved ones emigrate, communities who see essential services closed down, and fathers and mothers who face a future of poverty for their children and long-term unemployment for themselves. Proud working families have been forced into accepting hand-outs and looking for charity from the likes of the Society of St. Vincent de Paul to keep hunger from their children. To tell these people that things could be worse is a mockery.

The Government wants the public to pay three times for local government services. The public pays for the services provided by their local authority through their taxes. Households already have to pay for services including waste collection, call out charges for the fire brigade, septic tank charges and management fees, and soon water charges will be added to the list, and now the Government wants the same households to pay an added household charge.

I want to take the opportunity to nail some of the myths surrounding the payment of rates in the Six Counties - myself and the Minister of State, Deputy O'Dowd, addressed this today. As well he knows, Sinn Féin is in government in the North as part of a partnership Government. We are proud of our record in the Assembly, particularly in protecting those on low incomes and in expanding on services being provided by local authorities. As part of the reform of public administration, Sinn Féin is central to local government reform.

The facts are that in the North households pay rates, these rates have been frozen, at the proposal of Sinn Féin, with an average rate being £700; and there is a waiver scheme in place for those on low incomes.

It is also a fact that the rates cover a range of services, including refuse collection, fire services, septic tank de-sludging, school transport, school books and water supply. None of these services is provided by local authorities in this State.

It is also worth noting that there are no tolls on roads in the Six Counties and no water charges. Waste collection is a funding stream for local authorities as private companies pay local authorities to collect the waste because they see it as being valuable.

Politics is about making the right decision, not the easy one, and improving the quality of life for ordinary persons on low and middle incomes. Trading on empty truths does not pay bills, create jobs or strengthen communities.

Sinn Féin wants to approach the challenges that face our people with reason and analysis. Therefore, when we set ourselves the task of overturning the household charge, we approached it with solution-based alternatives.

At our recent Ard-Fheis, we launched a Back the Bill campaign to encourage the public to support the Bill to reverse the household charge. We are happy to have received support both of the Unite and Mandate trade unions, the Dublin Council of Trade Unions and a number of community groups and associations such as SPARK, which represents lone parents.

By introducing the Local Government (Household Charge) Repeal Bill 2012, Sinn Féin, with the support of Opposition and, hopefully, some Government TDs, aims to reverse the household charge and reimburse all those who have paid the charge.

In opposing this charge, Sinn Féin is also careful to put forward solutions. The Government could have made other choices. Funding and savings could have been made from one of the following options. It could have introduced a new third rate of tax only on income over €100,000 earned by individuals which, according to the figures we have obtained, would have brought in €410 million. It could have abolished group relief availed of by companies to transfer losses to profitable companies and thereby get a write-down of tax receipts, which would have raised €450 million. The Government could abolish legacy property reliefs, which would raise €341 million. They could easily cap all public servants' wages at €100,000 per annum, which would save €265 million. A 1% wealth tax would raise almost €900 million - less than one fifth of 1% would bring in more than the household charge.

Any one of the above would have raised more and covered the cost of local government services. Instead, the Government chose to dig deeper into the public's pockets, which have been dipped into in five austerity budgets where they have faced cuts in services, increased taxes and less wages in their pocket.

Sinn Féin would also call for the improved collection of commercial water rates. Currently, the collection rate is in the region of 52%, and that needs to be addressed.

There should be increased rates on banks. The banks should not pay the same rates, based on their location and square footage, as the sweetshop next door. They have a considerable turnover and should pay a higher rate.

In towns such as Portlaoise, where there is a significant number of State buildings, there should be rates levied on those State-owned buildings.

According to the Association of Municipal Authorities of Ireland, AMAI, there are other sources of funding that could be considered. The association put forward a number of options in the past. There are considerable Lotto receipts from every town and parish in the country and a percentage of those could be retained at local level to supplement the income of local authorities.

In other countries it is common for a percentage of revenue generated from value added tax to be retained locally.

In December 2011, Labour Party and Fine Gael Deputies faced a choice. While Sinn Féin put forward workable solutions in our pre-budget submission, the Government chose to take the walk of shame by supporting massive cuts in public expenditure and introducing new charges. All of this was done in the name of fiscal management and good housekeeping. It is clear, however, that those who made these decisions have not managed a household in many years. If they had, they would have made different decisions. The Government must understand that one cannot run a healthy household budget and keep people warm, fed and educated with an ever decreasing income and ever increasing expenditure.

Looking abroad one finds that councils in Denmark receive a portion of the corporation tax raised in their respective areas, while revenue from a local wealth tax and tax on natural resources that is levied in Norway is allocated to local authorities. In Spain, a percentage of a local tax on the development of land is allocated to local authorities. The Government had many alternatives to the household tax but chose the lazy, unfair option. By imposing the charge, it is forcing local authorities into a financial crisis, as evidenced by today's decision by Offaly County Council to curtail services. Councils have had their funding cut year after year by consecutive Governments and are now dependent on revenue from the household charge to fund essential services. This approach will not work because cuts to funding will affect people accessing public services. It was the Minister's decisions that brought about the current crisis in service delivery.

This Government has handed over billions to zombie banks and bondholders. Things could be different, however, and the Bill gives Deputies an opportunity to do the right thing, which all of us have been elected to do. Anyone with a social conscience knows that flat rate taxes such as the household charge are wrong. For this reason, I urge Labour Party Deputies to join us by rendering redundant the household charge and dumping it in the waste basket of history. We must instead put in place other structures that provide for more secure sources of funding.

During Leaders' Questions this afternoon, the Taoiseach, Deputy Enda Kenny, stated he lived in the land of reality and added, in reference to the household charge, that it is a law that "the majority of people favour strongly". If he believes that statement, we are in even deeper trouble than I thought when we have such a delusional Taoiseach representing us at EU level.

The household charge has been one of the worst fiascos ever perpetrated by an Irish Government. It is unjust, unfair and uncollectable. The law requiring householders to register and pay has been ignored by hundreds of thousands of people across the State. These are not habitual law-breakers or criminals but decent people who have simply had enough and decided that this imposition on them and their families will not be accepted. Many tens of thousands of others, and perhaps more again, have paid the household charge but remain vehement in their opposition to the charge. The Government should not lump them into the group it claims is strongly in favour of the charge.

The arrogance of the Fine Gael-Labour Party Government in persisting with its efforts to impose this charge is nothing short of breathtaking. Did it really expect people who have been hit again and again with charges, taxes, wage cuts, price rises and cuts to services for which they have already paid, as my colleague, Deputy Stanley, enumerated, to volunteer to pay an unjust and inequitable household charge? If that is the case, Government members are already very distant from the reality of people's lives, having taken office less than 18 months ago.

Some 47% of Irish adults have less than €100 to spend by the end of the month once bills are paid. Nearly two thirds of households have less to spend than they did this time last year according to the income tracking survey published in April by the Irish League of Credit Unions. Some 28% of respondents to the survey indicated they could not afford to pay the household charge, while 45% stated they were struggling to cover the cost of keeping their cars on the road as a result of increases in motor tax and a dramatic rise in the price of fuel.

I doubt if any form of tax has been as widely boycotted as the household charge since the days of British rule. Around 50% of those liable under the legislation have not paid the charge, yet the Minister, Deputy Hogan, and his Fine Gael and Labour Party colleagues persist and insist that it can succeed. One definition of stupidity is repeating the same mistake over and over again and expecting a different result. That is the stupidity of the Government in persisting with this charge and an austerity strategy that is not working.

As with many Deputies, I served in local government before being elected to the Dáil. I deplore the manner in which the Government has tied the financing of local government to this charge. With supreme hypocrisy it cut the local government fund, imposed an uncollectable household charge and now blames those who refuse to pay it for the funding crisis in local government. Such nonsense from a Government that has repeatedly allowed breaches to its own guidelines for the pay of ministerial advisers, refuses to introduce a higher top rate of tax for those receiving more than €100,000 per annum, will not cap public servants' pay at €100,000, persists in paying billions to bank bondholders and follows the futile path of austerity regardless of the consequences. Having done all of this, it then blames the householder who does not pay the household charge for the crisis in the public finances.

The signalled proposal to deduct the successor to the household charge - the property charge in whatever form it takes - directly from the pay of PAYE workers is outrageous. If the Government believes it has encountered anger over the household charge and chooses to go down that route, it has not seen anything yet.

It is long past time the Government cut its losses, did the right thing and abolished the household charge. I appeal to all Fine Gael and Labour Party Deputies and all voices on the Opposition benches to support the proposition in the Bill when it is put to the House tomorrow night. I appeal especially to Labour Party Deputies to stand by the promise of fairness they gave the electorate in 2011 by voting to scrap the household charge. People do not object to paying their fair share or contributing to a fair means of funding and financing the needs of the State and its citizenry. However, the household charge is an outrageous and ill thought out mechanism that is not working and is creating significant hurt in our communities. It is time to a call it a day and find an equitable and fair alternative.

The Government must be honest and accept that the household charge is a mess and it will not be possible to pursue through the courts hundreds of thousands of citizens it knows to be honest people who have worked hard throughout their lives. I can only speak with authority about my home county of Donegal. There was a grassroots campaign of ordinary people across the county who decided to stand up against the charge. They organised meetings in packed rooms across the county. I looked at the profiles, read the local newspaper columns and followed it very closely. These were not radical far left people or something like that. These were ordinary people who voted Fianna Fáil, Fine Gael, the Labour Party, Sinn Féin and independents. They voted across the spectrum but they just cannot accept this charge as being fair. They know where the money is going. They know this is not some scheme to fund local council services. Such services have been run down incrementally over recent years, especially in capital investment. From a peak of around 1,300 staff in the county council, we are down to fewer than 1,000 now. That represents an almost 25% cut in our staff. We have seen a dramatic collapse in capital investment across the county in roads, marine, water and sewerage infrastructure, yet we are told that this charge is for council services. As we speak, we are seeing libraries and local community services being squeezed in partnership with the council.

I discovered something last week that really concerns me, which is the statistics on payment that local authorities are putting out. The grassroots group in Donegal that has campaigned against this charge quickly disproved a statement put out that 45% of the households had not paid. They demonstrated that 63% of households in Donegal have not paid this charge. Is the Minister of State seriously going to bring them all to court? Will he criminalise two thirds of households in Donegal and half of the households of this State?

The leaks to the national media in recent weeks that Revenue officials will be deployed to collect the charge - the whole thing is a farce at the moment - clearly demonstrates that this whole project has not worked. Will the Government learn from these lessons and take the opportunity to engage constructively with us over the next two evenings, or will it replace the stick with an even bigger stick from Revenue? The idea of taking money directly from PAYE workers has met with some resistance from the chairperson of the Labour Party, Deputy Keaveney. I am not sure if he did a solo run or if that is the policy of the Labour Party. If it is the policy of the Labour Party that it will not support the deployment of Revenue officials, it will be an interesting battle between the two Government parties on how to resolve this. They are all over the place on this issue. It is clear the people who voted Fine Gael and the Labour Party in the last election have been let down and have rejected this.

I can only speak for Donegal. I am really proud that two thirds of the people of Donegal have not paid this charge. All sorts of pressure was applied to them and it is remarkable they have taken that decision. Donegal was historically a very conservative county. These are people who never wanted to protest and never imagined they would not make a contribution, as it was presented, to their local council, but that is what they have done. People of a similar vein across the State have clearly made the same decision.

I ask the Fine Gael and Labour Party Deputies to take the opportunity to engage constructively with all of us who oppose this charge and work out alternatives, because such alternatives exist. Sinn Féin presents such alternatives before every budget and we will do it again later this year. We will show them alternative routes to meet the targets they have to meet. There are choices. They do not have to make these choices. This has failed. There will be failures and successes in government, but the key challenge is to accept the failures and move on. This has been a failure. The Government needs to change direction and look at some other way of gathering resources. There is flexibility under the troika programme to do that, so it should take that opportunity.

Are the Minister of State and his colleagues seriously suggesting tonight and tomorrow that they will go after hundreds of thousands of households in this State that they know to be honourable, decent people? Will they go down the road of bringing them before the courts and criminalising them? They know they will not do that, so let us walk away from this household charge, reimburse the people who paid it and look at a fairer way of achieving this.

Even the IMF - not a bastion of global social justice - has stated that the Government has to find a fairer way of doing this. I will leave it to the Minister of State and his colleagues to make their choices, but they face serious problems. The chairperson of the Labour Party has stated his party will oppose this going through Revenue. I wonder will they honour this promise. The Government is facing a battle on all fronts, so it should walk away from this and change direction.

When I address the Minister of State, I do not wish to address him personally, but he is the only representative of the Government present to listen to this debate.

I will not be upset if the Deputy wishes to do so.

I contend that we have spent far too much time inside and outside this Chamber debating whether or how or how much we should extract from the householders of Ireland. Prior to the last election, the current Government parties promised better, more transparent and more accountable national government. They stated they would introduce better and improved local government, provide better representation for the Irish people in negotiations with the EU, the ECB and the IMF, and that things would be better for the people of Ireland. What have we got? We have got a Government which, like its predecessors in Fianna Fáil, appears to be hell bent on surrendering every vestige of independence, economic sovereignty and democracy. The Government should have initiated a much-needed public debate on what things are better done at local level, what things are better done at regional level, what things are better done at national level, and how we could fairly fund those. Instead, this Government and, as a result, the Opposition are expending energy and members of the public are expending their energy looking at ways and means of extracting a further €100 per household from already overburdened citizens.

The limits of the Government's reforms appear to be to implement the instructions from the troika and the bond markets. Instead of offering real reform or debating real reform with the public, the Government is more concerned with fiddling around the edges to appease the troika. There is no better example of this than the decision to introduce this household charge. It was introduced because the Government cut funding to local authorities. The funding was taken from local government and redirected to bail out the banks. That is the reason for the existence of this household charge. To raise €160 million needed for local authorities, a charge of €100 was imposed on people's homes. It shows the Government has failed in its commitment to reform local government. There are those on the Government benches who try to spin the household charge as an attempt to empower local government with its own funding. What blatant nonsense. It has diverted public funds away from local government and put that money into rotten banks.

The Government is asking people to pay for services on three occasions. People fund local government through their taxes and with the privatisation of services such as refuse collection, many households are obliged to pay twice. Following the introduction of the household charge, the Government is asking them to pay a third time for services for which they have already paid through their taxes. If it is serious about local government reform, it must begin to think outside the box. However, the limit of its thinking appears to be the household charge. This is not the path we should be taking if we really want to strengthen local and national democracy. The changes required in this regard must be implemented from the grassroots up. The Government must help people to empower themselves. It must begin to consider how it can build strong communities and give people the opportunity to change and improve their situation. The household charge is a double tax and should be resisted. It is grossly unfair because it penalises those on middle and low incomes. How could any person argue that it is a fair tax when millionaires pay the same amount as pensioners and lone parents who have already had their benefits cut?

There is another risk of which the Minister of State and his colleagues in government must be conscious. The people of Ireland and other European nations will neither thank nor forgive us if and when our national parliaments end up as no more than glorified but expensive regional councils. We are well down the road in this regard. What we are doing is introducing what can honestly be described as insidious legislation designed to meet a set of instructions given to us by unelected people. Even if these instructions were designed and commissioned by the previous Government - some of the members of which are now part of the Opposition - they are insidious and wrong. What they are doing is damaging, if not destroying, democracy in this country.

Let us engage in a real debate about local, regional and national reform and also on our relationship with our European neighbours and the wider world. Let us seek to restore democracy, pride, sovereignty and independence. Let us bin this insidious and unfair household charge. Let that be the beginning of a new way of governance in this nation.

I listened with great interest to the chairperson of the Labour Party, Deputy Keaveney, speaking on "Morning Ireland" yesterday about the household charge and the impending property tax. His refusal to rule out the Government's muted call for a property tax to be taken directly from PAYE workers was of very little surprise. Nor was his bemoaning of what he described as a disproportionate level of protest against the household tax relative to, as he sees it, the total cost of the charge. It strikes me that it is game, set and match: the Labour Party has well and truly and fully rolled in behind Fine Gael's world view. Gone are the days when it showed empathy with struggling families or the working poor. Deputy Keaveney's argument was "Sure what is €100 anyway?" If ever there was a clear articulation of the need to reduce the pay of Teachtaí Dála, the Labour Party's chairman made it yesterday. I have no doubt that if he was seeking to raise his family while in receipt of the minimum wage or a social welfare payment, he would have a much clearer appreciation of the value of €100.

There is absolutely no point in those in the Labour Party or anyone else referring to the need for fair and progressive taxation while standing over the household charge. It is a flat tax and takes no account of household income or people's ability to pay. It has been introduced at a time when families are being put to the pin of their collar in respect of every cent. Opposition to it is defiantly set against the Labour Party's and Fine Gael's relentless and focused attack on low-income households. Tax increases and cuts to social protection entitlements have imposed greater percentage losses on struggling families' household money than on the funds of those on high incomes. While the Labour Party talks the talk of fair and progressive taxation, it certainly does not walk the walk. Budget 2012 reduced the poorest 40% of households' incomes by up to 2.5%. At the same time, it protected the top 30% of high earners whose incomes dropped by just 0.7%.

We all know that when the previous Government was in power, Fianna Fáil's cuts to social welfare, the introduction of the universal social charge, the widening of tax bands and the reduction in tax credits had a crippling effect on families least able to shoulder the burden. That is a fact. However, the Government has tragically opted to follow in the footsteps of that which preceded it. In the context of this matter, it is worth mentioning that women are most concentrated in the lower income groups. Single people with children, 73% of whom are women, on average, lost a massive 5% of their modest incomes in 2011. With Budget 2012, Labour Party and Fine Gael colleagues hit the vulnerable and low-paid again, only even harder on this occasion.

Let me make a proposition and float an idea. The Labour Party has stated this week that it wants to introduce a tax that relates to wealth. It would be based on the premise that those in a position to pay would do so relative to their wealth and property. Here is my suggestion: introduce a wealth tax. Introduce a tax of 1% on all assets with a value in excess of €1 million. Excluded from this could be working farmland, business assets and the first 20% of the value of primary residences worth in excess of €1 million. In addition, an ability-to-pay clause could be included in respect of individuals who are asset rich but cash poor and who would require a level of protection. If the Government does everything I suggest, it will raise up to €800 million. That is what the yield would be. This is a considerable amount of money and it could be levied in a fair and progressive manner.

If the Labour Party, in particular, and Fine Gael and the Government in general are truly committed to equity and fairness and to each person and family shouldering the burden in accordance with their ability to pay, why not do as I suggest? Why not drop the household charge which is unfair and has been and will continue to be resisted and opt for a fair and progressive path? That is the challenge for the Government. I put it to the Minister of State directly that this is what should be done if the Government's rhetoric about us all being in this together is to mean anything at all.

This is a very important debate and it comes at a time when the country remains in an extremely difficult position. Internationally, significant financial problems have arisen in countries such as Greece, etc. This debate focuses on a very narrow part of what the Government must do in order to meet the requirements laid down in the agreement with the troika. Nonetheless, I accept there is a need for the Government to spell out the position again. I challenge Sinn Féin. Later, I will challenge them directly with regard to some of the points they have made.

Deputy Stanley has proposed that the Local Government (Household Charge) Act 2011, which has so far raised more than €94.5 million, be repealed. This is a significant amount of money in today's challenging financial circumstances and is crucial to the continued funding of local government and the provision of essential local services. The legislation was enacted relatively recently by the Oireachtas and there is no basis or justification for its repeal. Given international events and continued uncertainty in the international economy, many will find it incomprehensible that Deputy Stanley and Sinn Féin can make this proposal at this time.

The household charge was introduced as part of the agreement with the troika, to which Ireland is committed. It is a vital funding element of our public services at local level. The full yield from the charge is estimated at €160 million, based on payments from all liable households. The purpose of the Act was to give effect to the EU-IMF programme of financial support for Ireland's commitment to introduce a property tax by 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. It was considered that, in light of the complex issues involved, a property tax 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. I want to emphasise that this charge is, and was always intended to be, an interim measure.

The Local Government (Household Charge) Act 2011 provides, essentially, for the majority of owners of residential property in the State to pay an annual charge of €100. Liability arises each year on a point in time basis, which is 1 January. As I have noted, the charge is expected to raise some €160 million on full payment, and revenue from the charge is supporting the provision of the vital services provided by local authorities in our communities. Internationally, local services are administered by local authorities and financed by local service charges.

Deputy Stanley will be well aware of this. It is accepted practice to fund local service through a property tax and this is the position in Northern Ireland among other places.

The Sinn Féin Deputies seem to be exercising a particular form of doublethink at which they are becoming quite expert.

The Minister does not mention local services.

They are quite willing to engage in populist pandering in this jurisdiction and complain about a household charge of €100. While it is difficult for many households to pay, by international standards it is not a lot of money. Let us compare it with charges in Northern Ireland. A home owner in Dundalk pays €100. Ten miles north of Dundalk, across the Border in Newry and Mourne, a home owner pays an average of €965. In West Belfast, the former constituency of the Sinn Féin leader, Deputy Adams, every house pays an average of €877. Should one visit the city of Derry and call on the Sinn Féin deputy leader, Martin McGuinness, MP, MLA, one would find people in his street paying, on average, €698. The arguments of the Sinn Féin Deputies do not stand up.

The Minister of State is comparing apples and oranges.

What about services? Let us be fair.

In Northern Ireland, there are two charges. The Deputies spoke about three charges down here. There are two up there. The regional rate is set by the Northern Ireland Executive in Stormont, of which Sinn Féin is a part. Councils, on which Sinn Féin have members in many cases, set the district rate, which meets needs such as building control, community centres, leisure facilities, tourism, waste management, and so on.

Sinn Féin Deputies cannot have it both ways. They cannot say €100 is not acceptable in one part of the country while saying the opposite on the other side of the Border. They cannot face two ways at once. That is not acceptable, and it is the weakness in their argument. It would have been better for Sinn Féin Deputies to put the motion and, if it were beaten, to tell people to pay the charge. Notwithstanding that they do not support the charge, they should encourage people to pay, given the penalties people will face if they persist in not doing so. People who listen to the "No" voice will end up in greater difficult, and not less. After two years of non-payment a person will owe €280, compared with a maximum of €200 if the charge was paid on time. People are being led astray.

The law is very clear. We are talking about the law of the land. I accept that it is perfectly acceptable to propose a motion calling for the repeal of an Act. Should the Act not be repealed, and it is more than likely it will not, people can be brought to court for non-payment and will face a fine of up to €2,500. As well as that fine, a person will be liable to a penalty of €100 per day until the charge is paid. It is better for people to pay now.

This is an interim charge for this year. We need a property tax and it will be introduced. It will be more acceptable because those who have more will pay more.

In Northern Ireland, payment is unavoidable. Deputy Stanley claimed Sinn Féin held charges at a certain level. I am sorry to inform him that a BBC news bulletin of 14 February 2012 reported that Strabane rates were to rise by almost 4%. On local councils and in the Executive, Sinn Féin supports the increasing of charges on every house and dwelling in Northern Ireland. In the South, more than 200,000 households are exempt from the household charge. Anyone who rents a house from a local authority or in the private sector, is in receipt of mortgage interest subsidy from the HSE or lives in category 3 or 4 housing on an unfinished estate does not pay.

Sinn Féin Deputies must face the truth. People cannot accept the validity of an argument that is hollow at its core. It is bluff and bluster. It is pointless populism. It is time for Sinn Féin to face the reality, to be accountable as a political party, to be a true opposition and argue the issues. They should not encourage people to go into a more difficult financial place where some may end up in court. I do not want to see people go there. Sinn Féin should encourage their supporters to pay the charge, notwithstanding the fact that they do not agree with it. That is the law of the land. They should obey the law.

The average domestic rates bill in Northern Ireland for 2011 was €980. It is made up of the regional rate and the local council rate.

The practical position is that by international standards, the revenue base of local authorities in Ireland has been relatively narrow, with local authorities here being disproportionately dependent on central Government funding. The figures I have indicate that the total budget spent by all local authorities in the country is approximately €4 billion per annum. We are talking about taking in approximately €160 million with the household charge. The charge is small in proportion to the total cost of local government. The introduction in 2009 of the non-principal private residence charge represented an important step change in how local government is financed and was the first dedicated new source of funding for local authorities in some years. It did not, however, go far enough to address the imbalance in the sector's financing. The introduction of the household charge must be seen as a further step in seeking to place the funding of local authorities on a relatively stable, local basis that will not, among other things, be subject to the volatility associated with transaction-based activity. That is the reality. We based our tax income on income from the sale of houses. The shattering reality with which we were faced when the property bubble collapsed and the world economy went into recession was that we did not have a sustainable method of funding Government, in particular, local government. That is what this is all about. That is the reality of Government. It is the reality Sinn Féin has faced in the North and it will have to face in this Parliament if it wishes to be a true Opposition.

It will be if the Government keeps implementing such policies.

Sinn Féin must accept that there has to be sustainable funding of local government. Notwithstanding the weaknesses in what we are doing now, when the property tax is introduced it will be fairer and I expect socialist parties to support it because it will be based on people's wealth and their ability to pay.

It is not a wealth tax.

The introduction of the household charge must be seen as a further step to place the funding of local authorities on a relatively stable local basis. A proper broadening of the revenue base for local government will be the result of the household charge and the subsequent full property tax.

In this country, local authorities are responsible for certain services and that is where the money raised from the charges will be spent. They include fire and emergency services, maintenance and cleaning of streets, street lighting, planning and development services, public parks, libraries, open spaces and leisure facilities. Those are essential local services which benefit all members of the public, including business, and are often taken for granted. We expect to have streets lit at night and to have open spaces and playgrounds in which children can play and enjoy themselves.

In common with all levels of Government, the financial position of local authorities remain 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 was reduced by €164 million compared to 2011. Income from the household charge is, therefore, critical in ensuring that local authorities have the necessary resources to continue to deliver services to their communities. However, within the constraints of introducing a relatively modest charge of broad application, the household charge sought to be as equitable as possible through specific provisions for exemptions and waivers in order to exclude those households in particular difficulty from the ambit of the charge. I appreciate that even at €100, the charge is not welcome to people, especially those in difficult circumstances. Members on all sides of the House understand and appreciate the difficulty the charge causes for many. There is no doubt that it causes difficulty for people. However, it is a necessary contribution to the funding of the State, which is spending more than it is raising. Also, given the absence of a tax on residential property, it is a major gap with which we must deal.

As there is no existing database of liable residential property ownership in the State, bills or invoices cannot issue. In this regard, the charge has been made a self-assessment measure and it is for the owners of residential property to assess whether they are liable to pay the charge. These arrangements are modelled largely on those applying to the €200 charge on non-principal private residences. As of 15 June 2012, just under 960,000 residential properties had registered for the charge. That in itself is a mark of the progress of the measure and that the necessity of it is recognised by the broad majority of the population. Given the absence of any comprehensive tax on domestic property in more than 30 years and the fact that the State does not have a comprehensive database from which to work, this is significant progress in only a five and half month period. More than 17,200 properties were registered for a waiver on the same date. While 1 January is the liability date, actual payment of the charge was possible up to and including 31 March 2012. Therefore, late payment fees and interest only apply if the charge was not paid in respect of a liable property after the three-month period. Payment by instalments could be made at the time to assist homeowners with the additional cost. Significant efforts were made to ensure that property owners were aware of the household charge. We are all aware of the debate in the public domain in that regard.

County and city councils have delegated their functions in administering the charge to the Local Government Management Agency, LGMA, which is collecting the charge on a shared services basis for all local authorities.

Could we have a copy of the Minister of State's speech?

I apologise. Copies are available.

They are not to hand.

I apologise. I know they were printed. I am sorry if they are not available. I have been advised that they are available. Perhaps an usher could distribute them.

We will get the scripts distributed.

I am sorry. I thought the scripts had been distributed.

Similar to the €200 charge on non-principal private residences, an online system was developed by the Local Government Management Agency to enable homeowners to pay the household charge on the Internet. In addition, homeowners can make payment by cheque or postal order. More than 60% of those who have paid to date have done so via the online system, which has the advantage of being convenient for the public as well as minimising administrative costs associated with the charge to the State.

The proceeds of the household charge are paid directly into the local government fund. Moneys are disbursed back to local authorities from the fund in general purpose grants based on the grant allocations made to local authorities, taking account of the need for appropriate equalisation. The budgets of local authorities have been passed on the basis of receipts from the household charge.

A number of exemptions to the household charge apply. These include properties that are part of the trading stock of a business and have not been sold or been the source of any income since their construction and residential property owned by a Minister of the Government. Some poor souls thought that the private dwellings of Ministers were exempt but that is not the case. I am sorry to disappoint those who suggested that.

We are in the process of checking that.

It is just if they are owned by the corporate entity, the State or Government. Exemptions also include a housing authority or the Health Service Executive, voluntary and co-operative housing, residential property subject to commercial rates and wholly used as a dwelling, residential property owned by certain charities or discretionary trusts and residential property which an owner has vacated due to long-term mental or physical infirmity, for example, when an elderly person moves into a nursing home.

In addition to these exemptions, two important waivers apply in respect of 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. Households in receipt of mortgage interest supplement from the Department of Social Protection have therefore been excluded from the scope of the charge. Mortgage interest supplement provides short-term support to help eligible households pay mortgage interest payments. In excess of 18,000 households are expected to benefit from the waiver.

A waiver has also been provided for households in certain categories of unfinished housing estates. These housing estates have been listed in the Local Government (Household Charge) Regulations 2012 and were informed by local authority returns to the Department of the Environment, Community and Local Government from the 2011 national survey of unfinished housing estates. The Government's priority is to address the needs of those 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 problematic developments. The cost of the waiver will abate over time as the issues in these estates are resolved and property owners become liable for the charge. While I accept that the introduction of the household charge is an additional cost to households, the exemptions and waivers provided in the Act, added to the provisions for instalment payments, provide a reasonable response to those in particular need. I consider it important to reiterate to Members those households for which no liability for the charge arises. These include tenants in private rented accommodation, tenants in local authority housing, tenants in receipt of the 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 authorities in question still retain ownership stakes, tenants and-or those living in housing provided by voluntary and-or co-operative bodies, those living in housing vested in the HSE or a Minister, those home owners who have been forced to vacate their properties by reason of long-term mental or physical infirmity and are now living in properties that 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 properties owned by charities or discretionary trusts. In all of these circumstances, the Act provides a reasonable level of protection for those in greatest need in our communities.

I understand the hardship that many people are facing. Collection of the charge is a matter for local authorities and the legislation includes care and management provisions similar to those available to the Revenue Commissioners in respect of dealing with exceptional circumstances and where particular hardships are involved. It is a matter for county and city managers to use these provisions to achieve collection of the charge while responding to difficult cases.

In the event of non-payment of a household charge for which a person is liable by a certain date, the legislation provides for late payment fees and late payment interest of 1% per month or part thereof. 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, 20% of the amount outstanding where the charge is paid later than six months and not later than 12 months after the due date and 30% of the amount outstanding where the charge is paid later than 12 months after the due date.

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 are intended to act as an incentive to pay the charge as soon as people can. The sooner they pay, the lower the penalties applied. For those failing to comply with the legislation, the rolled up amount of a late payment fee should not be underestimated and non-payment for a period of two years will leave a person owing €280 when account is taken of the charges, the late payment fees and late payment interest. We want no one to be in that position. Local authorities also have power to take prosecutions against owners who fail to discharge their liabilities. Prosecution will be by way of summary proceedings and a court may impose a class C fine, which ranges from €1,000 to €2,500. This is a great deal of money and includes up to €100 per day until such time as a person pays the €100 charge.

Provision has also been made for data exchanges between local authorities and the Private Residential Tenancies Board, PRTB, the ESB, the Property Registration Authority and the Revenue Commissioners. These data are intended to assist local authorities in identifying properties that are liable for the charge and in following up on those households that have not paid.

The Government is not solely focused on local government funding issues. We are seeking to ensure that local government delivers the services that our communities expect as efficiently and cost effectively as possible. We will ensure that the proceeds of the household charge will be put to optimum use in delivering local services and are determined that local authority cost bases will continue to be rigorously examined and reduced to maximise efficiencies that, in turn, impact positively on business.

The public must be reassured that all funds are used to their benefit and that public services are being run as efficiently as possible. Local government is to the fore of the efficiency effort. It has managed to maintain front line services while reducing overall numbers between 2008 and 2012 by more than 8,000, some 22%. In the same period, local government has become more affordable, having reduced revenue expenditure by €736 million, with nearly €200 million in efficiency savings being achieved in the past two years. This efficiency drive will continue.

The Government's commitment to aligning the community development sector with local government will see a stronger role for local authorities in local enterprise and community development while building on local initiative and enterprise. This in turn will maximise the impact of investment to produce jobs at a local level. There are many good examples of authorities working effectively with local enterprise to sustain and develop jobs. The Government's decision to bring county enterprise boards into local authorities by the creation of new local enterprise offices will provide a rationalised, focused and high-quality service to small and medium-sized enterprises, SMEs, through a more holistic approach to business support. More generally, a new local government sectoral strategy to support jobs is being developed. It will draw from these initiatives and build on best practice.

The household charge has been introduced out of the necessity to ensure that local authority services are funded in a sustainable manner, to close the gap in income and expenditure in the national finances and to ensure that we meet our obligations under the EU-IMF programme. The public want responsible opposition in the House, but a proposal to repeal this legislation is not responsible opposition. The public want responsible debate in the House, but Sinn Féin's statements have not indicated a sensible approach to the management of our public finances, the funding of local government or the widening of the tax base. For Deputy Stanley's party, it is hypocritical to propose the repeal of the household charge, given that party's involvement in government in Northern Ireland where local services are funded-----

-----by significant taxes on every house without exception, including those-----

That is not true. There are waivers.

It is. The charge is even paid on houses that are not occupied.

The Minister of State should reduce his scriptwriters' pay.

Deputy O'Brien should check his party's website.

The Minister of State only has two minutes remaining.

The household charge is an interim measure and will be replaced by a full valuation-based property tax in due course. However, time is required for that and the household charge was necessary as an immediate measure to meet the troika's timeframe. This was the context in which the legislation was introduced.

In terms of the full property tax, an independently chaired interdepartmental group was established in February to consider the structures and modalities for a full property tax. Recently, the group completed its work and submitted its report to the Minister for the Environment, Community and Local Government. The approach to the report will be considered by the Government in due course.

The Government is concerned by the equity of any charge. For this reason, the household charge was introduced as an interim measure, thereby providing the time to consider a property tax fully and to ensure that the issue of fairness and the implications for personal income levels, employment circumstances and property values are given full consideration. The household charge is also necessary to ensure that local authorities will not need to curtail local service to their communities next year. However, I accept that the charge is an additional cost on households. I do not underestimate the daily financial pressures on families. The charge has been set at the lowest possible level that is consistent with raising the required amount of funding in 2012. Many of the most vulnerable groups are exempted or entitled to a waiver. Provision has also been made for payment by instalment.

The introduction of the €100 household charge on residential property is one of the measures that must be taken, reflecting the support programme, to close the gap between expenditure and revenue. However, it should be seen as more than simply a measure to raise revenue. It is a structural change to the State's revenue-raising system and provides an alternative revenue stream that will not be subject to the volatility associated with transaction-based property taxes. The household charge represents a new local source of funding for local authorities and reduces their dependence on central government.

The Local Government (Household Charge) Act 2011 is crucial, not only to local government financing at present, but to the successful implementation of a future property tax. The change it represents in terms of how we finance local authorities is essential to the future sustainability of local government and the future well-being of our communities. If we care at all about the continuing provision of local services and the shaping of local communities, we must vote against this Bill.

I am grateful for the opportunity to partake in this debate on this exceptionally important matter, the household charge, which touches the hearts and minds of almost every household throughout the country. I try to tune into my local radio station, Limerick's Live 95FM, which is more a regional station, as much as I can, even when in Dublin, through the Internet or on my smartphone. Each morning the station has a radio phone-in show. Over recent weeks, I have been struck by the number of people still phoning the show complaining about the household charge. The one underlying theme in all of these calls is the inherent inequity of the household charge and the unfairness in how it has been applied.

During the debate on the household charge legislation, Fianna Fáil opposed it in the form it was presented. We did so because as a charge or a taxation, it did not meet two fundamental criteria. It was neither equitable nor collectible. Tonight the classic example was given of the millionaire versus the pensioner when it comes to how equitable the charge is. A wealthy person will pay the same charge of €100 as someone in negative equity with mortgage arrears and other personal debt problems, who is out of a job and living on social welfare. Therein lies the fundamental problem with the charge. It is foolish to rationalise its concept. That is the tenor of all the radio phone-in messages to radio stations throughout the country.

Fianna Fáil proposed several amendments to the legislation to broaden the exemptions and waivers. The Government would not hear of it at the time. We did not even have an opportunity to move the amendments because the legislation was guillotined. If I recall correctly, the legislation was published on the same day as the budget, which is highly questionable and irregular. For such a new departure, as the Minister of State described it, and a structural change to the taxation system to be floated in on the same week as the budget and given two hours debate in the Dáil is wrong. We are supporting this Sinn Féin Bill which will repeal the household charge legislation. The charge should be re-introduced on an equitable basis.

We all recognise local services have to be funded. However, a root and branch fundamental reform of local government is required. Any existing reforms are going on too much in a piecemeal fashion. When the government parties were in opposition, they fought local elections on national issues. Local elections traditionally and consistently have been a type of mid-term referendum on the Government of the day's performance. During local elections, candidates campaign on national issues while not being held responsible for their local policies. That has ill-served local government. Funding of local government has always been on a centralised basis. The introduction of the household charge was also done in a centralised way. A local authority does not have the discretion to levy local taxes which is a problem that feeds into local democracy.

Earlier, the issue of septic tank charges was raised. This charge was debated both at length in committee and this House. My party, along with Sinn Féin and the Technical Group, tabled an amendment to remove the registration charge of €50 but we were told the charge would raise €25 million. Then one evening on the six o'clock news the Minister for the Environment, Community and Local Government, prior to attending a Fine Gael public meeting in Dundrum House Hotel, County Tipperary, announced he was dropping the registration fee to €5. We went from the Government opposing my party's amendment to remove the registration as it was a charge on the Exchequer to the Minister appearing on the news to announce he was dropping the charge to a fiver. The message that sends to the public is that the Government is all over the shop when it comes to registration fees and charges. If people are looking at this carry-on with the septic tank charge, of course they will think the same with the household charge. That adds into the complications for people understanding the whole unfairness of the charge in the first instance.

The Minister of State referred to unfinished housing estates, which is a significant issue. Across the country, there are many unfinished estates that are not categorised as category three or category four and, accordingly, do not qualify for exemption from the charge. The process by which those housing estates can now be categorised as unfinished is not published and is not clear to the public. If a member of the public contacts the local authority and manages to get through the layers of bureaucracy to someone who might know, he or she will be told there is some type of a process. For example, one estate in my constituency, Ceol na hAbhann in Caherconlish, is obviously unfinished, even to my non-construction eye, but it is not categorised as unfinished. People in such estates are looking at the schedule of unfinished estates as it is published on the Internet but cannot make any sense of it. We need to have an obvious rationale as to what basis estates are declared unfinished.

The fundamental problem with the household charge is the lack of real or meaningful exemptions from payment. I know the Minister has cited waivers for those in voluntary housing schemes and local authority rented houses. Old age pensioners who live on the State pension alone should have also been exempted from the payment. In the past people have been granted a discretionary a medical card because they were suffering from all sorts of complications and were highly dependent on medication. However, those who formerly would have been granted a medical card have more recently been means-tested by an agency of the State. If an individual is deemed eligible for a medical card, it is obvious that he or she has a difficulty in paying the household charge.

Many younger couples who paid excessive stamp duty at the height of the boom are now facing mortgage arrears. Approximately 90,000 mortgage holders are in arrears of 90 days or more. Many of these households are living in unfinished housing estates. It is unfair to expect them to pay the €100 charge. A similar argument can be made in respect of those in negative equity.

It will be argued that the household charge was part of the deal with the troika, but I sat down with its representatives during the period when Opposition Members were allowed to do so. We were not afforded an opportunity to meet troika delegations during their last two visits. The Government suddenly sent a signal to the troika that it should not meet Opposition Members, which is not good for politics. In our last meeting with the troika we drew its attention to the unfairness of the household charge and were told it was a matter for the Government to prioritise. It did not have to be introduced this year. The Government can introduce whatever measures it likes from a menu of items, provided the bottom line figure is met. I do not accept its argument that the household charge was part of the memorandum of understanding. It had an array of options from which to choose.

I will finish where I started, with the people ringing my local radio station in Limerick. What is happening in Limerick is repeated in other parts of the country. Where do the people of Limerick city and county stand now that 45% of households have not registered because the vast majority are simply unable to pay? The Irish League of Credit Unions has found in a survey that people have been put to the pin of their collar. Will the 45% of Limerick people who encounter difficulty in paying the household charge be hauled before the courts?

When one introduces a charge or tax, one must recognise inability to pay and the need for fairness and equity. The Government should have heeded Fianna Fáil's proposals for reasonable exemptions and waivers for old age pensioners, the unemployed, those in receipt of social welfare payments, medical card holders and those in negative equity or with mortgage arrears. We recognise that certain people can afford to pay the household charge, but others are unable to pay and working people in middle Ireland are being squeezed. The Revenue Commissioners are to be mandated to pursue these same individuals through the PAYE system. We need a fundamental debate on the bloc of people who are working and paying for everything. We cannot continue along our current path in the absence of growth in the economy. The household charge, as it stands, is unjust and unfairly applied across the country.

The United Left Alliance supports the Bill and will vote in favour of it tomorrow evening. The tabling of the Bill by Sinn Féin gives us an opportunity to debate the issues arising from the household and water taxes. That is all it does, however, because it will be voted down by the combined forces of Fine Gael and the Labour Party which shamelessly continue to pursue their savage and unjust austerity policies and their ruinous approach of putting the gambling debts of speculators and bankers on the shoulders of the working class. The fact that the Bill will be defeated raises the question of how ordinary people who are not prepared to accept this new imposition as part of the bailing out of European financial markets and who represent a majority in society can impose their will on the Government. How can this household tax be defeated, if not by a vote in the Dáil? The answer is that it can only be defeated by the mass opposition of ordinary people, expressed through the mass boycott being observed by a majority of households.

The boycott of the home tax and the campaign of mass opposition which is active in every county and uses tactics of peaceful civil disobedience reflect the opinion of the majority. That is why it is regrettable that Deputy Stanley in presenting the Bill referred to the campaign against the household and water taxes, its spokespeople and the Deputies who supported the boycott as engaging in cheap or easy populism. He claims such an approach is irresponsible because we will be unable to pay any of the fines boycotting households risk incurring. I am afraid that is entirely the wrong approach to take. It behoves us to tell the truth that only an active boycott campaign can defeat the tax; otherwise we will be depending on votes in the Dáil. Householders have made the decision to come together in solidarity to organise the boycott. This has been expressed by the tens of thousands who attended mass meetings up and down the country and the fact that, leaving aside those who own multiple houses, the majority of households have refused to register. This is the biggest campaign of civil disobedience in the State since small farmers organised a boycott of land annuities in the 1920s. Those discredited payments where made to former absentee landlords who were not unlike the bondholders and speculators of today who reside in far flung lands while laying their debts on the shoulders of the people. Sinn Féin's leadership should be supporting the many activists in its own ranks who actively support the boycott.

The Minister of State at the Department of the Environment, Community and Local Government again threatened compliant taxpayers. He scandalously threatened the imposition of huge fines, including one of €2,500 for failure to pay a household tax of €100. What threats have been used against the bankers, speculators and bondholders who crashed the economy? It is disgraceful for the Government to threaten those who are the tax paying backbone of the country with persecution. This tax is a precursor to the so-called property tax which in reality will be a home tax rather than a wealth tax. A report in theSunday Business Post that Revenue might be given powers to deduct the property tax from wages blows out of the water the Government’s fiction that the property or home tax will not be a tax on work. If the Government persists in dragging decent people through the courts, it will face a bitter and widespread war of people power. It should drop this tax forthwith in the interests of justice.

Debate adjourned.
The Dáil adjourned at 9 p.m. until 10.30 a.m. on Wednesday, 20 June 2012.
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