My point prior to Leaders' Questions related to the Taoiseach's comments in response to the national movement that has emerged in recent months opposing the Government's proposals on water charges. The Taoiseach said the protests do not relate solely to water charges and I made the point that I agree with him. This opposition movement partially relates to water charges but it is also about much more. The reasoning is mixed: there is ideological opposition, some worry about their ability to pay based on the figures bandied about before the climb-down by the Government some weeks ago and others are simply disturbed, annoyed and let down by the way the Government has handled this issue since the process began a couple of years ago. As the Taoiseach acknowledged, some people feel water charges represent a tipping point, the last resort along a difficult path travelled by this Government and the previous Government.
Government parties and members have failed to acknowledge their part in bringing matters to this juncture. The Government made commitments to the public on burning bondholders, eradicating third-level education fees, ending homelessness, introducing universal health care and restoring recapitalisation funds to the people. Indeed, the EU was obliged to restore recapitalisation funds, having come up with a mechanism to meet the demands of states that found themselves in circumstances similar to Ireland and other countries prior to the downturn. People voted for the Government parties on the basis of these commitments and the belief that there could be an easy way through the crisis. Unfortunately, there was no easy way, despite the fact that the Government was frequently made aware of what was required.
The Taoiseach sought to win two Dáil seats for Fine Gael in Roscommon by speaking from the back of a lorry of the retention of the accident and emergency unit at the hospital. This has not been achieved. Many other commitments were made that were not lived up to. It is sad that a homelessness forum is necessary to deal with the tragic circumstances facing the many people sleeping rough in this city and others. The Irish Nurses and Midwives Organisation, INMO, this morning highlighted the need for a national emergency forum to address problems in hospitals and this is a reminder of the Government's failure to keep promises that were made. It is against this background that the public has tended to sympathise with those taking extreme views on water charges. Cohesive and coherent governance is necessary for this Administration to remain in office and it is in jeopardy.
There is an obligation on the Government to recognise the situation it faces and alter course to win back the public and help them understand the need for certain measures. The Government has not gone far enough in this regard: rather than come out with one hand up it should have come out with two hands up. It should admit defeat, acknowledge the huge losses incurred by the State due to the path that was taken and start again. Had the Government chosen to stand back, reconvene and start again I do not think such actions would have met with any disapproval on this side of the House. Unfortunately the Government saw fit not to do this and instead proceeded with a regime that is less cumbersome but regressive, nonetheless. We will maintain our opposition to Irish Water, which has persisted since the entity was first mooted many years ago.
As I have told many commentators and Deputies, I have no problem with the concept of asking people to make an extra contribution towards the provision of an adequate water supply but I believe this can only be done when the system is fit for purpose. A mechanism must first be devised to make the system fit for purpose and the necessary funding mechanism must also be in place. Multi-annual programmes for the delivery of infrastructure have been carried out often since the founding of the State. In recent times the National Roads Authority, NRA, did significant work on the roll-out of the national primary road network around the country - many people consider this a success story. The multi-annual programmes I refer to were carried out on budget and on time so this is a model for delivery that could have been considered regarding infrastructure for the water network. The Government has made mistakes in how it has dealt with this but I do not necessarily want to rehash these failings and the rushed nature of this project. It has descended into a sorry debacle.
We will continue to oppose this Bill, which gives effect to the changes and climb-downs announced by the Government some weeks ago, and all of its contents. The announcement of this new system is a panicked U-turn. The conservation goals and capital infrastructure plans behind water charges have been abandoned by a rapidly back-pedalling Government. The fact that Irish Water is a super-quango has been recognised by the Opposition, the public and the Government but the Government still aims to raise €140 million through new charges. This approach will put at risk the spending on capital infrastructure that the system requires.
We must be mindful of the fact that some will say €540 million has been wasted on water meters as they will not be used for the next four years. Meeting this commitment on metering infrastructure costs up to €25 million per annum in interest payments. We are conscious of the fact that it cost €180 million to create Irish Water and that €80 million of this was spent on consultancy fees. The accountancy trick of taking water off the national balance sheet has backfired badly. Some weeks ago we felt it was time to abolish Irish Water and suspend charges and this view remains the same today on the publication of this legislation, which gives effect to the new charges. The issue should be revisited with a view to putting in place a timeframe for works to be carried out. Associated costs should be made clear, along with a mechanism for how they will be met - perhaps through general taxation mixed with a public private partnership. It should be clear to people that planned work has been costed and can be paid for. Once the system is improved and fit for purpose we can ask people to contribute. The system should have an ability to pay philosophy enshrined at its core.
Among the major issues that still exist, that are obvious, that must be acknowledged and that are yet to be addressed is the fact that the new system will cost households with two adults €160 and €60 for a single adult. The myriad water supports announced in budget 2015 and some weeks later will be replaced by a €100 conservation payment to all households. This amounts to almost ten U-turns in less than two months since water charges were first introduced on 1 October.
No commentary has been sought or given from the Commission for Energy Regulation, which was given the responsibility by Government to be the eyes and ears of the public and the consumer. It was to be the watchdog for the public and the consumer and was to act in the best interests of the consumer.
The principle of water conservation has been completely abandoned and with it the €540 million spent on water meters has been left rusting in the ground while a flat charge will be used until 2019, at least. We should remember that during the course of the debacle when the Government was trying to justify the reasons and methodology and give an explanation for the debacle as it travelled through the past two years, Ministers were falling over themselves trying to explain to us and others the need for water conservation and investment. The arguments have now been forgotten following what was brought forward some weeks ago. In a further blow to the tattered reputation of Irish Water, even since that announcement, revelations surrounding the €100 million increase in water meter estimation costs have raised further questions. The entire set-up of Irish Water should not only be abolished but subjected to an investigation by the Comptroller and Auditor General. The Comptroller should examine, analyse and recognise the failings of Government to manage the funding that was thrown into this project with nothing to show for it. Not one cent out of all the millions spent has gone into the reinstatement or rectification of the system as we know it.
We want to question the capacity of Irish Water to implement a capital investment plan. Has this been undermined? If not, the matter should be explained. We were told that private borrowing by the body was one of the main reasons it was set up. Arguably it is now impossible to do that due to the company's reliance on Government payments. To meet the EUROSTAT market corporation test, Irish Water will have to raise at least 50% of its revenue from non-Government sources. We are told the gross Irish Water revenue from domestic charges will be €300 million with a further €200 million coming from non-domestic units. However, it remains to be seen if the water conservation payment will constitute State aid. It is extraordinary that no independent assessment can be sought from the body that will carry out the test. We are dependent on statistical analysis from independent sources within this jurisdiction and we are not privy to the market test that will take place next March.
We have heard that the State aid figure is only 44%. What percentage of non-compliance in water charge payments will tip that towards the 50% breaking point? I hope that some Government Members or Members of the Government parties will confirm during the course of the debate today and tomorrow whether they have a plan B in the event of the test not passing. I am mindful that it might not pass for two reasons. First, 44% is the figure of State aid at present. What would it take for this to move closer to 50% in the event of non-compliance? At what rate of non-compliance will that percentage be reached? The second reason is adverted to in the Bill. I gather the utility known as Irish Water will not have to make any payments in the form of commercial rates to local authorities. Supposedly the relevant figure from a revenue perspective is €60 million. I put a question yesterday to the Minister on the matter but I was not entirely convinced from his reply or the subsequent written answer that I received the necessary clarification for the matter to be signed off. Many local authorities throughout the country have not factored this into their existing or proposed budgets for next year. Local authorities had understood, based on their consultations, conversations and correspondence with the Department in the past year, that they would be in a position to benefit from rates from a utility such as Irish Water, in particular and if nothing else, since the value that was put on the assets upon transfer was supposedly €11 billion.
I know for a fact that the only valuations that have been carried out on such assets to date are in the counties of Dublin and Waterford. No local authority from any other county has been in a position to give a clear indication of what income could or would be derived in commercial rates from Irish Water. How is it, then, that the Government can state emphatically that €60 million will be saved by virtue of this legislation? The legislation is supposed to provide that local authorities will not collect rates from Irish Water. The House was never informed about the value of these rates to the 34 local authorities throughout the country. How, then, can the Government maintain emphatically and categorically that under this legislation there will be savings to the value of €60 million?
I asked questions yesterday and during a previous debate when we discussed the Minister's proposal to give effect to these charges and this legislation. The Taoiseach gave me a commitment that the strategy and plan in respect of the rectification and capital expenditure works of Irish Water would be on the table for us to adjudicate on, as would the associated costs and a clear and defined method by which water services would be paid for in future. This never arrived during the course of the debate, but I hope it might come in this debate. In addition, I seek clear, categoric and succinct detail on the value that has been placed on Irish Water's assets throughout the 34 local authorities as well as detail on the revenue that was to have accrued to local authorities and which is being foregone by virtue of this legislation. I put it to the Government and the relevant Minister that the figure is far in excess of €60 million. The absence of this information places at risk the possibility of this programme, project, concept or model passing the EUROSTAT corporation market test.
Reference has been made to the issue of water meters and conservation. It is incumbent on representatives of Government and the Minister to outline to the House the type of conservation they envisage from the model before the House. The position is that a single person will be asked to pay €60 per annum, having got the conservation allowance from the Department. We have yet to get the details - I hope they will be forthcoming - on the costs to the Department of Social Protection of providing the workforce or resources to assess and distribute the reimbursement throughout the State. There must be costs associated with that process. Will they come from the social welfare budget? If so, are there other projects under the remit of the Department of Social Protection that will be pared back to meet such costs? Perhaps the Minister of State will address that question as well.
Let us suppose a person has a meter outside a dwelling and he or she can prove water conservation has taken place in that household and, therefore, he or she is entitled to a €10 refund. What costs are associated with the checks and balances in confirming that? It would almost cost €20 to give back €10. Again, what sort of consumption or usage levels have been scientifically proven to yield savings by virtue of this model? The same person could have a car wash facility at his residence seven days a week and not be charged an extra cent over and above the €60 charge.
Many people are willing, if and when we have a system that is fit for purpose and the necessary investment has been made in the water network, to make a contribution over and above general taxation as they would have an improved system. They do not expect their neighbours to waste water wantonly and then to have to pay the same charges as them.
I have set out some of the points on which confirmation is required. I have also set out questions which I ask the Minister to convey to those with responsibility in the area during the course of the debate in order that at its conclusion, irrespective of how Opposition Members might vote, Government party Members can be more informed before they make a decision to follow this legislation blindly. It is important considering how blindly they followed legislation on 19 December last year which caused such a furore and left the Government having to row back in an embarrassing fashion on its commitments having rushed the whole process to facilitate the appointment of a person to an EU post in Brussels.