Martin Ferris
Question:133. Deputy Martin Ferris asked the Minister for the Environment, Community and Local Government the estimated time for the delivery of the already promised National Asset Management Agency housing units. [5552/13]
Other Questions
NAMA Social Housing Provision
Pearse Doherty
Question:193. Deputy Pearse Doherty asked the Minister for the Environment, Community and Local Government if he will provide an update on the delivery of the National Asset Management Agency housing for social lease, including units that have been identified but now excluded, units ready for occupation, occupied units and vacant units which are suitable for occupation. [5551/13]
I propose to take Questions Nos. 133 and 193 together.
Since December 2011, NAMA has identified 3,949 properties as being potentially available for social housing. The local authorities and the Housing Agency have been working systematically with NAMA to determine if there is a social housing demand for properties identified as potentially suitable for social housing, including the need for accommodation for those who are homeless. Of that 3,949, some 981 units have been identified as unsuitable by housing authorities. A further 652 have been withdrawn, usually by property owners as circumstances change. For example, units are sold or leased privately and, therefore, are no longer available.
Demand or suitability has been confirmed by housing authorities for some 670 units that are at various stages of negotiation. Efforts are being made to secure as many of the suitable properties as possible for social housing. It will continue to be my Department's objective in 2013 to maximise the delivery of social housing using all of the resources available.
By the end of 2012, some 203 units had been sourced through NAMA, 179 of which were delivered for social housing purposes. These units were delivered through a variety of funding mechanisms by local authorities and approved housing bodies, AHBs, as follows: 65 through direct leasing arrangements; 57 purchased directly by local authorities; and 57 purchased by AHBs using funding under the capital assistance scheme.
While progress has been made to date in terms of delivering units for social housing purposes, it has not been achieved at the rate originally envisaged. In the main, this is due to the complexities of getting agreement from multiple parties operating within an environment subject to a range of legal and financial constraints. I hope that the establishment by NAMA of a special purpose vehicle in 2012 to facilitate the leasing of units will accelerate delivery in 2013.
We have probably had NAMA for four years or longer. The delivery in terms of social housing has been disappointing, to say the least. Some 203 units have been delivered overall. In 2011, it was claimed that almost 2,000 units had been identified, but these were whittled down to a small number. Another claim of 3,879 identified units has also been whittled down because some of those units have been sold.
More than 100,000 people are on the housing waiting list. Families included, we are discussing a couple of hundred thousand people. This disaster is building. More and more people are attending our clinics about housing issues.
A question, please.
When will local authorities receive the identified units? The mechanism might be complicated.
It might have a lot of legalities attached to it. I accept the Minister has set up the special purpose vehicle to deal with the issue. However, we need action. We must get the mechanism up and running, identify properties, secure agreement and convert them into social housing or bring them under the remit of voluntary housing groups. The situation is urgent.
I accept that progress was slow in the early stages but it is accelerating. As the Deputy accepted, that is largely due to a couple of factors on which we have been working hard. The Minister, Deputy Hogan, and I met the National Asset Management Agency, NAMA, on a number of occasions last year.
The special purpose vehicle is important because it involves gathering units into it which then can be passed on through the voluntary housing sector or the local authority sector. There was a problem with leasing, namely, some difficulties on agreeing leases with voluntary housing bodies. They have now reached an agreement with NAMA on an appropriate lease that appears to satisfy everybody. That will speed up matters as well.
We got a specific allocation in the budget, to which the Minister for Public Expenditure and Reform, Deputy Howlin, referred, to ensure that we would have funding this year. To give some indication of figures, while we have more than 200 over the line, between 600 and 700 are being processed. I hope we will have the majority of those through this year.
I was in Scotch Hall in Drogheda last Thursday and met residents who had moved into some of the units. The experience has been positive. When the various bodies involved with NAMA – owners and receivers – realise that this can be a positive development, and where we have local authorities and voluntary housing bodies working with us, I am confident that we will see an acceleration. I am driving the process. I wish to ensure that we get those units because as the Deputy said, many people are waiting for social housing.
The year 2012 was probably the worst on record for house building. It is disappointing that we have not made more progress. I accept there are problems in terms of the legalities and I hope the special purpose vehicle will address most such issues. I am interested in learning more about what is entailed in the leasing agreement. To date, leasing agreements are being entered into for a period of 20 years to 25 years with voluntary housing groups and then there is a possibility that the properties would return to the owners. That is unacceptable. They should belong to the State. NAMA is a State company and such units should be in State control. I cannot envisage any circumstances in which they should return to a developer in NAMA.
On question No. 193, the problem is that the State, through the taxpayer, is taking on the liability with NAMA. As Deputy Ellis indicated, NAMA is a State company which means it is owned by the citizens of the State. The problem is that we have taken on the liability but now NAMA seems to be in hock to the developers, in the sense that it is leasing from them.
I have a suggestion that could be examined. We have estates full of empty houses. The Minister of State is familiar with Gleann Alainn and other estates in County Laois. In some estates only a few houses are occupied and there are dozens of empty houses. Could the Minister of State examine the possibility, through NAMA or the Department, that where bonds have not been paid or developers have absconded that houses could be secured in lieu of a bond? If, for example, there were 30 empty houses, could ten of them be secured in lieu of the bond in order that the estate could be finished? The local authority would get ten houses and the State would receive a dividend. The State is taking all the risk. Joe and Mary Taxpayer are taking all the risk. I accept that the Minister of State has said she is trying to accelerate the process. I saw her on the television recently in Drogheda. I welcome what took place there. It is a good news story. However, as Deputy Ellis stated, the problem is that the liability still rests with the taxpayer and the money is still filtering back to developers. Where they have not finished estates, could some of the houses be taken in lieu?
I appreciate that Deputy Stanley has put forward suggestions. We are examining all of them. The difficulty with NAMA is that as part of its legislative remit it must return an economic dividend to the State. At the same time it has a remit on a social dividend.
Houses come under that.
We must get that balance right. In fairness to NAMA, it has put several million euro into restoring and bringing these various units up to a level where they can be taken over. We will continue to meet NAMA. We have not met it yet in 2013 but we will do so. We will ensure that we get the best possible dividend from it. I understand there are still a number of empty properties throughout the State-----
There are hundreds of them.
-----and we want to get as many of them as we possibly can. There is an economic dividend involved. NAMA is holding them in the sense that it does not have them to give away for free and we must be conscious of that.
I have a raised this issue on a number of occasions with the Minister of State. Does she not recognise that the progress being made in this area is pathetic given that the census of population identified that there were 340,000 empty houses and having regard to the number of people on the housing waiting list, namely, some 100,000 families? It is unbelievable that so little progress has been made when the housing waiting list is longer than it has ever been and we have more empty housing units that we ever had in the State.
The Minister of State does not seem to acknowledge that NAMA and the number of empty houses identified are not a panacea because there is a shortage of housing in areas such as Dublin and the surrounding areas of some of the bigger cities. There must be some direct building of social housing if we are to make even a dent in addressing the record length of the housing list. It is unacceptable. Some families in my area have been on the housing waiting list for 13 years. What proposals has the Government to reduce that waiting time to acceptable levels? Nobody should have to wait longer than two or three years on a housing list.
I am fully aware that trying to move units from NAMA into social housing is not black and white all the time. Neither is it easy for NAMA to sell units all the time. There are complications about selling units under many of these projects. Many of these housing units or apartments would not necessarily suit social housing but many of them would. Does the Minister of State agree that currently, large stocks of apartments or houses are being sold off, be it by NAMA or by the banks, at less than what it would cost to build the units tomorrow, even if one were to get the land for nothing? The notion that the State would sell property that could be used for social housing purposes in order to bring in some money, even though the units are being sold for less than it would cost to build them, does not make sense. It is a good time for the State to use these assets to provide for its people and to direct them towards social housing provision rather than selling them off to bring in some funds.
I appreciate the points the Deputies have made but we are under severe constraints with regard to the troika agreement and the amount of public money that can be spent at present. Therefore, we have to get the best possible value for money. While I would love to be do what Deputy Boyd Barrett has suggested and provide for the building of a large number of local authority houses - I hope we will do that again - we are not in a position to build them on the scale he mentioned. We have to use the various mechanisms available to address the needs of people in whatever way we can, whether it be acquiring units from NAMA, which we are doing, leasing arrangements and the rental accommodation scheme, RAS, with which the Deputies are familiar. There is also the method I discussed with Deputy Catherine Murphy, on foot of her priority question, around transferring rent supplement to the local authorities whereby we would have all of the long-term housing requirements under the one system. We are moving to reform measures in whatever way we can. We are using whatever available mechanisms we have to house people. When we restore the country to economic sovereignty and start to build up the economy again by all means we will return to much more substantial housing building than we have currently. The Deputy who said that there is beginning to be a shortage of accommodation in the Dublin area is right.
That has to be addressed.
I agree but it must be done through the market as well as through the social housing system.
Commercial Rates Calculations
Thomas Pringle
Question:134. Deputy Thomas Pringle asked the Minister for the Environment, Community and Local Government if, in the interests of the economic difficulties that small retail businesses in town centres are experiencing, he will consider bringing forward legislation that will allow for local authorities to implement a differential rates system that would see retailers being billed according to their turnover and their ability to pay; and if he will make a statement on the matter. [5547/13]
Richard Boyd Barrett
Question:165. Deputy Richard Boyd Barrett asked the Minister for the Environment, Community and Local Government if, in the interests of the economic difficulties that small retail businesses in town centres are experiencing, he will consider bringing forward legislation that will allow for local authorities to implement a differential rates system that would see retailers being billed according to their turnover and their ability to pay; and if he will make a statement on the matter. [5480/13]
I propose to take Questions Nos. 134 and 165 together.
Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent commissioner of valuation under the Valuation Act 2001.
The Commissioner for Valuation has sole responsibility for all valuation matters, including the most appropriate method of valuation. The levying and collection of rates are matters for each individual local authority.
It is important to acknowledge that commercial rates, as a local tax, and the rating system generally are deeply embedded in the local government system. A large body of case law is well established and local authorities and rate payers are, in the main, very familiar with and generally accepting of the operation and practice of the rating system. Rates are also a stable source of financing for local government which is not affected unduly by short-term changes in economic circumstances.
A property-based tax such as rates has a distinct advantage over any tax based on profits or incomes as it is generally found to be easy to collect and difficult to evade. A system having regard to economic factors on an ongoing basis would create uncertainty by providing for continuous change to the valuation base. Such a system would not provide a stable basis for funding local government and would require significant additional resources to operate.
I am conscious that local authorities have exercised restraint in setting their annual rates on valuation, ARV, in recent years and the average change of ARV across the 88 local authorities has shown a decrease - admittedly small - in each of the last three years. I have asked local authorities to continue to exercise restraint or, where possible, to reduce commercial rates and local charges for 2013.
Basically the Minister is saying that there will be no change. The Government is failing to acknowledge and take action on what is an enormous crisis facing small and medium enterprises, which the Government itself constantly says will be the driving force and the motor behind our economic recovery. There are 4,000 family-owned businesses in this country employing around 90,000 which are on the line of survival now. Those businesses need a break. Commercial rates are a very serious burden on them. Different countries have different rates models. In Britain businesses are given rates holidays, while in Scotland a differential rates scheme has been introduced. Spain and Italy have models which are bands-based and the rates are related to turnover and profitability and to the notion of giving support to small businesses in town centres and so forth. I urge the Government to examine these models or to consider some model which distinguishes between small businesses and, for example, high street banks. Is it not ridiculous that Bank of Ireland, Ulster Bank or Tesco pays the same rate per square metre as a local butcher or florist? That is ridiculous and something should be done about it in order to give a break to the small businesses that the Minister says he supports.
I welcome the fact that Deputy Boyd Barrett is now seeking to champion the cause of small businesses.
I always have done.
I welcome him to the revolution that he is acknowledging has taken place with regard to small businesses.
James Connolly was always on the side of workers and small businesses. It is the big businesses that are the problem.
Connolly is ours, not Deputy Boyd Barrett's.
I am very surprised that he is doing so because he and his friends protested against my visit to a very important facility in his own constituency last week, valued at €100 million. They do not want people to pay anything, which would put more pressure on commercial small businesses struggling for survival as well as on Dún Laoghaire-Rathdown County Council to provide services for local people.
However, I accept that there is a need to look at the legislation. The Valuation (Amendment) (No.2) Bill is going through the Oireachtas at the moment and will provide the Deputy with an opportunity to make those points and to work with the Minister for Public Expenditure and Reform, who is bringing that legislation through the Dáil. That is the basis by which commercial rates are levied by local authorities. The question of a differential rate for small businesses as opposed to the larger entities that can better afford some of the commercial rate charges is something which I will keep under review.
A lot of Deputies are offering so I will call Deputy Boyd Barrett first, followed by Deputy Halligan.
I wish to reduce the burden and not increase it, as advocated by Deputy Boyd Barrett.
We want to reduce the burden on small businesses and on low and middle income workers who, by the way, depend on each other. Who does the Minister think spends money in the small and medium-sized businesses on the high street?
It is the corporations and the very wealthy, who can hoard their money offshore and avoid their taxes while making enormous profits, who should be made pay a bigger share in order to give relief to the ordinary consumers on the high street and the small and medium enterprises which are being crushed by the recession and by the rates and parking charges which they cannot sustain and which are crippling many small towns.
I welcome the fact that the Minister is willing to look at this matter. A motion calling for differential rates, proposed by People Before Profit, was passed by Dún Laoghaire-Rathdown County Council with the support of the Minister's party colleagues. The Minister should look at international models we could follow to give a break to small and medium enterprises.
Over a period of two years, 1,560 small businesses went to the wall. Many of them say their biggest problems were rent and rates. After that came car parks and overhead costs. I have spoken to small business owners in my own constituency. Even on the outskirts of the city they are paying the same rent per metre as the big stores in the centre of the city.
I spoke to the owner of a small business where only two people are employed. The business is paying €8,000 in rent per year. That may not sound like a large amount but it is a great deal of money to a small business with only two people trying to make a living out of it.
The introduction of a differential rent scheme is a reasonable request for small businesses to make, considering what huge shopping centres can pay. The big centres may also be experiencing difficulty but not to the same extent as small businesses, so many of which have been foreclosed.
I agree with the sentiments expressed by both Deputies with regard to helping small businesses through these difficult times. Small businesses in a provincial town contribute a substantially higher proportion of their profit to their local authority than in a major town or city. There is a case to be made and I am prepared to look at any opportunities, with the help of the Minister for Finance, to deal with these matters. The Valuation (Amendment) (No.2) Bill should give us the legislative basis to do that. We may make representations to the Minister for Public Expenditure and Reform to see what can be done to find the legislative basis to do so.
Local authorities have shown flexibility, in so far as they can, to keep businesses open. I have asked them to be as flexible as they possibly can. Where a premises is not being used to the maximum I have asked them to show flexibility in reducing the rates burden, to tide us over the current difficult financial situation when the decline in trade and throughput means the disposable incomes of businesses are not what they were.
The development levy scheme was recently announced by the Minister of State, Deputy Jan O'Sullivan. The development contribution scheme is now under review by the local authorities. Where improvements need to be carried out in core strategy areas and town centres, local authority members now have a chance of reducing development contributions. There is not the same level of activity in those town centres at present and some respite or reduction in the development levy scheme could generate much needed economic activity in the form of improvements to premises and employment opportunities in those areas.
The Government has admitted defeat with regard to upward only rent reviews. We will park that failure.
With regard to commercial rates, however, does the Minister know that commercial rents have come down in many provincial town by as much as 70% in the past four years? Commercial rates have come down by, at most, 6%. Does the Minister agree that the correlation between the two should be closer, in line with commercial reality?
The Minister referred to the Valuation (Amendment) (No. 2) Bill. Is it the Government's intention to overhaul the archaic commercial rates system as part of the programme for putting people first, devolving power to local authorities and changing the way they do business?
Is less more? It can be in this instance. The Minister must take some risks in this area to address the terrible conditions and atmosphere in the small business community. The correlation should be a lot closer than 70% and 6%, and if the Minister agrees, it is incumbent on the Government to honour its commitment to overhaul the commercial rates system. It is archaic, does not work and pays no dividends to those we represent.
I welcome Deputy Barry Cowen's remarks that rates have fallen by 6% somewhere in the country. My experience is very different. Dublin city is undergoing revaluation at present and we were told that material change of circumstances would be taken into consideration. Now, however, the Valuation Office is going on physical appearance only when, surely, turnover should be a factor. There is no consistency in the way revaluation is done on properties and we do not know what the criteria are. Currently rates are calculated by multiplying the rateable valuation, which is based on the 2011 rent, by the multiplier that is set annually by Dublin City Council. We were not even asked what our rent was in 2011.
For the record, I have a café in Dublin 1 and following revaluation, the rates will be going up by 37%. I have a wine bar and restaurant in Dublin 1 and the council wants to increase the rates by 25%. I have a wine bar and restaurant in Inchicore and there will be an increase of 42%, and on the North Circular Road, which is not exactly Grafton Street, the council is increasing the rates by 79%. There is no logic to what the council is doing, and there are no transparent criteria or accountability. How can the council work these figures out when it did not contact us beforehand?
In his initial reply, the Minister mentioned the security of rates as a source of funding for local authorities. If shops and businesses close down because the increase in rates has made them unviable, dereliction and job losses also become issues. There must be a whole of Government response to this. When the Valuation (Amendment) (No.2) Bill reaches Committee Stage, what input will the Minister have on nuance? Will the Minister insist only on a secure funding source or will he take a broader look at a more nuanced approach to the changes that might be made?
There must be an income element to the rates - that is Sinn Féin policy. One of the problems small businesses are having is that if a premises is vacant for a period and a business takes it over, the rates carry over. The Minister often talks about the North and I am delighted he is starting to make comparisons between the two parts of Ireland. In the North, the rates are related to the business itself. Unpaid rates from a previous business do not carry over to a new start-up, although they do in this State. That causes a lot of problems. Also, it does not make sense to have the euro shop paying the same per square foot as Allied Irish Banks.
Development levies have nothing to do with this at all. The Minister mentioned the Valuation (Amendment) (No. 2) Bill on a number of occasions but there are problems with it. There has been an inordinate delay in bringing it before us. Six months is the difference between a small business going under and surviving.
My experience is that local authorities are not flexible. They tell people they are mandated to implement the regulations as they stand and they have no flexibility at all. In interventions I have made on behalf of small businesses in my area, the response is that the local authority knows things are difficult and that a business might not have the money but if it owes rent or money to the bank or suppliers, it should give the local authority that money and leave the others short.
That is what we are dealing with. The matter will not be resolved unless there is an input from the Government.
A final reply from the Minister.
I agree with the sentiments expressed by all Deputies about the frustration of small business with commercial rates and their application arising from the existing Valuation Act. The Valuation (Amendment) (No. 2) Bill 2012 is working its way through the Upper House and I hope it will be in the Dáil in this session.
There are many anomalies. I am sure that all of us, from our direct experience with constituents, come across them on a regular basis. I would be anxious to work, perhaps with the relevant Oireachtas committee, to see what changes could be made through making a submission to the Valuation (Amendment) (No. 2) Bill. It is too important for small businesses in the context of survival for many of them.
The differentiation of the rate is a suggestion that should be examined. There are many cases, of which Deputy Wallace and, I am sure, everybody in this House could give examples, where they are trying to rebalance the rate base rather than giving a fairer system. Where there is an increase in the rates levied arising from a valuation, such as the ones mentioned, that is done for the purpose of giving a break somewhere else. That is not always apparent and it depends on the criteria and the factors that are taken into account, which I will not go into today.
Who was given the break?
I am sure other sectors of the economy are getting a break.
Offices, maybe, but retail is screaming and is on the floor, so to speak.
We are out of time.
The House will be aware that the hotel sector got a significant break of a reduction in its rates base in the past year and it acknowledged that. Maybe Deputy Wallace is not aware of that. The hotel sector is a significant employer as well.
The point Deputy Wallace makes, with which I agree, is that there is a significant problem here. The Valuation Office is too slow to carry out revaluations, the appeals system is not satisfactory and the basis on which commercial rates are levied needs to be looked at. There are a number of issues.
Deputy Halligan and Members from Limerick and Tipperary will have an interest in the following. Limerick is a good example of where efficiencies have been generated already arising from the merger. There is a 5% reduction in its commercial rate in 2013. I hope all local authorities, such as Waterford and Tipperary, where there are mergers, will follow suit.
If the Minister gave us a little extra.
Property Taxation Application
John Halligan
Question:135. Deputy John Halligan asked the Minister for the Environment, Community and Local Government in view of the fact that local authorities will be liable for property tax with regards to their housing stock, the way he intends local authorities should deal with this; if he will be or has already issued any communication to local authorities in this regard; and his views on whether council tenants should be asked to pay for this. [5483/13]
Thomas Pringle
Question:137. Deputy Thomas Pringle asked the Minister for the Environment, Community and Local Government in view of the fact that local authorities will be liable for property tax with regards to their housing stock, the way he intends local authorities should deal with this; if he will be or has already issued any communication to local authorities in this regard; and his views on whether council tenants should be asked to pay for this. [5546/13]
Richard Boyd Barrett
Question:146. Deputy Richard Boyd Barrett asked the Minister for the Environment, Community and Local Government in view of the fact that local authorities will be liable for property tax with regards to their housing stock, the way he intends local authorities should deal with this; if he will be or has already issued any communication to local authorities in this regard; and his views on whether council tenants should be asked to pay for this. [5482/13]
I propose to take Questions Nos. 135, 137 and 146 together.
The introduction of the local property tax will provide a more sustainable funding model for local government, will devolve greater responsibility for financial decisions to local level, and will help renew the relationship between the citizen and his or her local authority. In introducing the Act, the Government has been keen to ensure that equity is seen to be preserved and that all sectors of society are required to make a fair and equitable local property tax contribution. In that regard, the relationship between the value of a residential property and the amount of the local property tax liability is important, as is liability for certain categories of social housing.
The Finance (Local Property Tax) Act 2012 sets out the position concerning residential properties and liability for the local property tax. Under the Act local authorities and approved housing bodies are, in general, liable for residential properties under their ownership. The existing arrangements for determining local authority rents are currently under review, under the relevant provisions of the Housing (Miscellaneous Provisions) Act 2009, in terms of providing for new rent schemes in 2014, and I anticipate that these new schemes will provide for an appropriate contribution to be made by tenants of liable social housing properties.
Section 7 of the Act provides that owners of residential properties which are charities or which are bodies established by statute are not liable for the tax provided that such properties are used solely or primarily to provide special needs accommodation. Certain accommodation provided by local authorities and by approved housing bodies would therefore be exempt from the local property tax.
Consideration is being given to the mechanisms for the pay over of social housing related local property tax liabilities, and associated issues are receiving attention, informed by ongoing contact with the local government sector and approved housing bodies. I am working with the Minister for Finance, Deputy Noonan, with a view to implementing a set of arrangements that are effective, efficient and equitable. Local authorities and approved housing bodies will be informed of these arrangements in due course.
I will be as brief as I can as there are a number of Deputies who want to contribute.
There is confusion and concern here. The confusion is that, although I am opposed to household charges of any form, when the household charge and the property tax were introduced, the indications were that they would not be placed upon those living in local authority houses.
The concern is that this may very well no longer be the case. It could be sneaked in under the guise that each local authority will be lumped with a bill that would be the equivalent of the property tax rate on its local authority houses. All that will happen is that it could very well force local authorities to increase rent on hundreds of thousands of already struggling families living in local authority houses, many of whom are unemployed or on low incomes and not in a position to pay any more to anybody. We need some clarity and we need to know the certain categories that will be exempt. Can the Minister state categorically that somebody living in a local authority house will not pay the property tax and that it cannot be imposed on them in another form such as rent increase or otherwise by the local authority?
I am not in a position to clarify a number of those issues today because they form part of the finance Bill. The regulations for the implementation of this tax will form part of that Bill in coming weeks when it will become clear. However, there is an issue of equity here. Some people in local authority estates, perhaps in tenant purchase schemes, are paying a contribution under the household charge or the property tax while somebody paying rent to a local authority is paying nothing in terms of making a contribution to the provision of services in his or her estate. There is an issue here that needs to be addressed and how it will happen is a matter that needs to be worked out between the Minister for Finance and the Department of the Environment, Community and Local Government in the context of the finance Bill.
The chairperson of the Dublin City Council finance committee and a number of other councillors have confirmed that there is no doubt that if the property tax is imposed on local authority housing in Dublin City Council, it will be passed on in the form of rent to local authority tenants. The same report was given by council officials in Dún Laoghaire-Rathdown County Council at pre-budget meetings and was, I believe, confirmed again at a meeting last night. We need clarity on the issue. If rent increases are to be imposed on local authority tenants, it makes a mockery of the claim that this is a property tax as the Minister suggested - it is not. It will mean an extra burden on people who do not own property.
Can the Minister confirm that a special committee has been established between the Department of the Environment, Community and Local Government, the Revenue Commissioners, the Department of Finance and the County and City Managers Association? What is the status of discussions and deliberations among that group on this issue as to whether the full cost of the property tax will be imposed on local authority tenants' rents and what that burden is likely to be?
Some 130,000 social housing units provided by local authorities and 27,000 units provided by approved housing bodies could become part of the category the Deputy mentions in the context of the local property tax. A steering group made up of all the Departments and agencies he mentioned is considering this issue and will report to the Minister for Finance in the context of the Finance Bill.
I will call three further speakers, Deputies Catherine Murphy, Dessie Ellis and Clare Daly. I ask them to be brief.
In terms of social landlords, I talked to a principal from the Iveagh Trust who is very concerned about the viability of housing in that housing stock. In my area we have Respond, Clúid and Circle. Increasingly housing will be administered by social landlords. The availability of housing is really bad at the moment and if we shrink that and put that housing stock at risk, it will have the very serious knock-on effect that the State will need to pick up on the other side. This needs the most careful consideration. I reiterate the point Deputy Boyd Barrett made that it clearly demonstrates that people of no property - they have no property if they are renting houses - will be paying a property tax. It is not a property tax and should be called what it is.
Social housing is provided by the local authorities for people on low income who cannot afford to buy their own home. It is now proposed to increase the rent paid by these people. Given people are already struggling and will not be able to pay, the local authorities will have to meet this cost from their funding, leaving them with less funding for everything else, including maintenance. That the Minister is going after people in local authority housing is an outrage. It can be argued that these people are different, have different lifestyles and in many cases do not have the same opportunities as others. Many of them are low paid, unemployed or are senior citizens. Given the amount which the local authorities and approved housing bodies are required to find is an additional €25 million and €3.5 million, respectively, these people will be asked to pay an additional €4, €5 or €6.
There is a contradiction in what the Minister said in terms of his statement that this so-called misnamed property tax is to provide a secure funding base for local authorities and his proposal to bill local authorities for 130,000 units. The dogs in the street know that cost will be passed on to tenants. Many local authorities have already done so. Against the backdrop of massive rent arrears, how will this benefit local services at local authority level? The Minister said that tenants of local authority houses do not contribute to services in their areas. Tenants in many areas pay management fees and taxes and should be entitled to the same services as everybody else.
Deputies
Hear, hear.
This is ironic given the calls by some Members earlier for support for the small business sector, in particular Deputy Boyd Barrett who called for some respite in the differentiation of rates in town centres. No one has yet suggested how all sectors of society could be asked to make an equitable contribution to same.
Make the big multinationals pay.
(Interruptions).
The issues raised by Deputies, in relation in particular to the approved housing bodies, are important and will be clarified in the context of the Finance Bill which the Minister for Finance will shortly publish.