Vol. 118 No. 1
Section 2 (4) states that:
The Minister for Finance may, from time to time, appoint such and so many persons as he considers necessary to assist the Tribunal in the performance of its functions under this Act.
Does the Minister envisage that the persons so appointed will be professional persons such as valuers, engineers, or architects and when such persons are appointed will they be the servants or agents of the Minister or the servants or agents of the tribunal?
Would the Minister comment on the composition of the tribunal? He touched on it and made the point that perhaps the chairman would be a legal person but, like other speakers, I would like to think that reputable property valuers would form part of the valuation tribunal. Could the Minister make a further comment on that? Also, where is it proposed that the tribunal will sit and is there provision for them to move around the country? In relation to reports, Senator Farrell raised a very important question as to when we might get a decision and the Minister replied that the report would be available as soon as possible thereafter, subject to the recommendations of the Minister. Perhaps an actual time limit could be put into the legislation rather than leaving it "as soon as possible". If the Minister could request the tribunal to have a report available within a specified time it would be better.
Finally, in relation to the question raised by Senator Mullooly section 2 (4) about people who assist the tribunal in the performance of their functions under this Bill, is there any provision whereby they could or ought to declare their interests?
At the outset I would like to thank the Minister for his response to my suggestion that women of the necessary calibre to serve on this tribunal should be considered. I interpreted what he said to mean that they would be very strongly and very favourably considered. He indicated that in his experience he has seen women make major strides in the area in recent years. That is welcome.
I am interested in the timescale of the establishment of the tribunal. Perhaps the Minister would comment as to when this legislation will be taken in Dáil Éireann and give us some idea of the timescale because obviously it will have to be passed and signed by the President before the tribunal could be set up. I would like to know what sort of timescale he has in mind. I would also be interested, as somebody from outside Dublin — from Waterford which considers itself the major centre in the south east region — in the venues for sitting of this valuation tribunal. I would be keen to hear the Minister state that the major centre of population in an area would be the place where the tribunal would sit.
It is also important to refer to what Senator Farrell said when he talked about the delay in giving a judgment. People who go before a tribunal do so on the basis of a certain anxiety to bring their case and appeal it. It is important that people should be put out of their misery as speedily as possible with the hope of a favourable decision but, in any event, with a fair and equitable expectation and that there would not be any undue delay in giving them this decision. In the past the Circuit Court has worked well.
I am also happy about the Minister's assurances that people with a knowledge of property and the market will be represented on the tribunal in addition to legal people. I await what the Minister has to say in fleshing out this portion of the Bill with some interest.
A number of points have been raised by various Senators. Senators Mullooly, Bulbulia and Fallon raised the question of the tribunal sitting in different parts of the country as distinct from being based in Dublin. It would not be necessary to enshrine that in legislation. We hope this will be considered by the Valuation Office and by the Minister for Finance and that the tribunal will sit on a regional basis throughout the country in different provincial centres. First, this would enable them to have first hand knowledge of the actual property values and the evolution of property development in the provincial areas. Secondly, they would be in close proximity and adjacent to the people who would be the subject of valuation revisions so that it would not be necessary to bring everybody to Dublin to make decisions. This might only intimidate people. We hope that that will be the position. I will be recommending to the Minister for Finance that he give that directive. It is not necessary to enshrine that in legislation.
As regards Senator Bulbulia's question as to when the tribunal will be established, it is hoped that the Bill will get through this House fairly quickly and on to the Dáil in the next session. It should be through the Dáil in February. Thereafter the necessary arrangements could be put in train to set up the tribunal. I am confident that the tribunal will be operating in the second half of next year. That is our ambition and our target.
Senator Mullooly raised the question of the staffing of the tribunal vis-a-vis the question of the Minister for Finance in relation to section 2 (4) which states:
The Minister for Finance may, from time to time, appoint such and so many persons as he considers necessary to assist the Tribunal in the performance of its functions under this Act.
As Senator Mullooly has suggested, it is expected that the appointments he will make will be of professional people, expert people, professionally practical people and professionally qualified people because there are the types of people in the property area who can make various contributions. It also gives him the discretion to second people from various Government Departments who have particular expertise to assist the tribunal. That will be incorporated also. The staff, once appointed, will be responsible to the tribunal and will become the staff of the tribunal. The staff, both administrative and technical, will be made available by the Minister for Finance but, when working with the tribunal, they will be responsible to the tribunal and not to the Minister. The tribunal will be responsible to the Minister. Indirectly, the staff would also be responsible to the Minister but directly would be responsible and report to the tribunal.
I hope I have covered all the points raised. When the Bill gets into the Dáil and once we have a reasonable assurance that it will pass all Stages, the preparatory work in selecting the tribunal and setting up its structures can come into place. When the Bill is passed the formal structures can be set up and the tribunal will be operating, I hope, in the second half of next year.
The Minister will forgive me if he has dealt with the question I am about to ask because I have just come in to the House. I take it that the Minister will be setting up this tribunal and that it will take effect. He need not reply to this because I will get it in the Official Report if he has already dealt with it in the course of his reply to the previous question. I presume the people who will be appointed to the tribunal will be qualified in property and valuations.
Will the staff of the tribunal be full time or part time? I always have a bit of a hang up when I hear talk about experts. We in the west, in particular, heard all the experts say that Knock Airport could not work. Knock Airport is the first airport in Europe to have made a profit in two years. It is a typical example of what the experts say. I would like to see the tribunal staffed by people who have spent a considerable time in business, like the Minister and many more of us——
And yourself, Senator Farrell.
——and in courthouses trying to sell properties because those are the people who have experience. I would like to see people of that calibre on the tribunal, people from the city who are dealing with the bigger properties going into hundreds of thousands of pounds and the smaller auctioneer who is dealing with the little bits of land and the smaller business. Those are the people who are experts. They have spent ten, 12, 15 or 20 years on the sod bank trying to get bids for property. I would like to see a good selection of people of that calibre on the tribunal.
Senator Farrell is not making a bad pitch for consideration of himself in view of his earlier remarks. Perhaps the Minister when replying might state how soon he expects judgments to be given when they come before the tribunal. I did not hear him reply to that question which I asked earlier. Will there be a time lag between adjudication on a matter and delivery of judgment?
It is my own perception that there are many eminent people in this House who would be eligible for membership of the tribunal but I presume the demands of this House would constrain them from participation in the tribunal. In deference to Senator McCormack, Senator Farrell and others who have a long record of professional service in the valuation area, I must reiterate that we expect to appoint professionally qualified people and professional practically qualified people who have experience and knowledge of diverse property values. As Senator Farrell said it is easy for one to be professionally consistent in a particular field but it may be the smaller property valuers who have the diverse and varied opportunities and qualifications from the type of properties they deal with. It is people like those who must be part of the tribunal. I hope there will be a good cross-section of professionally qualified people, professionally qualified valuers and other property people who understand valuations and property considerations and who could make balanced judgments if appointed to the tribunal.
Spoken from the heart.
Absolutely, Senator, at all times. Senator Farrell referred to full time or part time membership of the tribunal. We have an open mind on that. One cannot make a definitive judgment at this time. In trying to attract the right type of people on to the tribunal, if we tell them it is a full time appointment they may be discouraged and not accept. The most important consideration would be the amount of work that would be done by the tribunal or be generated for consideration by the tribunal. The matter would have to be reviewed based on the number of appeals coming before the tribunal. After some time it may be necessary to review and revise the situation but, as of now, we have a totally open mind. It may happen that there will be some full time appointments, in particular, a full time chairman but that may not necessarily happen.
Senator Bulbulia asked if there would be a time lag before judgments would be delivered. I hope that in many cases judgments will be delivered within a few days, in some cases within a few weeks and, at the maximum, in very serious, difficult, complex cases, no later than three months. I see no reason some judgments could not come in three days or seven days or at the maximum, for serious cases, in three months. This is part of the criterion, and the consideration that must be given when the overall structures are being set up. I hope that a reasonably defined time will be included in those definitions.
I have a couple of brief questions, Section 3 (3) states:
The Commissioner of Valuation shall cause every application made to him under subsection (1) of this section to be determined within six months after receiving the application or as soon as may be thereafter...
I think the words "as soon as may be thereafter" will have the effect of leaving it open to any length of delay in relation to an application made to the Commissioner of Valuation. I would be much happier if the section were to say that each application would be determined within six months but not more than 12 months or something similar. I feel that the words "as soon as may be thereafter" leave the section very open. Subsection (4) (a) states:
...the owner and occupier, if known, shall be notified by the rating authority of the application.
Paragraph (b) states:
The owner and occupier, where known, shall be notified by the rating authority of the determination of the application...
I would like to know what steps the Minister expects rating authorities to take to ascertain the identity of owners and occupiers in these situations. It would be very easy for a rating authority to say they did not issue a notice to an individual, an owner or occupier, because they did not know that person was the owner or occupier. The rating authority should be expected to take all reasonable steps to ascertain the identity of the owner or the occupier for the operation of these two paragraphs.
Subsection (5) (c) states:
The Tribunal shall transmit a copy of every notice received by it to the Commissioner of Valuation (who shall be the respondent in, and be entitled to be heard and adduce evidence at the hearing of, the appeal concerned), to the rating authority or authorities concerned and to any other person appearing to the Tribunal to be directly affected by the determination and any such person shall be entitled to be heard and to adduce evidence at the hearing of the appeal.
I should like to know if other persons, that is persons who did not receive copies of the notice, will also be entitled to be heard and to adduce evidence at the hearing of the appeal. It would appear from this paragraph that only people to whom a copy of the notice was transmitted by the Commissioner of Valuation would be entitled to be heard at the hearing.
Section 3 (1) states:
An owner or occupier of any property, the rating authority or an officer of the Commissioner of Valuation may apply at any time for a revision of the valuation of any property entered in the Valuation Lists or for the inclusion therein of any property not so entered.
The side heading reads: "Revisions and new valuations." Does that apply only to revisions and new valuations? What happens in a case where somebody is not satisfied with the valuation on the property because from time to time circumstances can change. A business property may be situated in an area and, for one reason or another, business changes to another area. Parking laws could have a detrimental effect on the value of the property in that location. What is the provision then for an existing valuation apart from revisions and new valuations? In a case where the tribunal makes a decision is the tribunal's decision final? In other words, is there any appeal mechanism beyond the tribunal?
In relation to subsection (3) I agree with Senator Mullooly that there should definitely be a limit on the time in which a decision must be made. It is all right to say six months; that would be a reasonable length of time but I do not think it should be anything greater than six months. It should not be open-ended because people would not know where they were as regards the valuation on their property for a considerable length of time. In view of the various speculations about property tax of one sort or another, valuations that will be fixed now could have a very serious effect. Does it apply to valuations of all types of property such as private housing on which at present there are no rates? There is considerable speculation that there may be such a property tax very shortly.
Subsection (5) (c) states:
The Tribunal shall transmit a copy of every notice received by it to the Commissioner of Valuation (who shall be the respondent in, and be entitled to be heard and adduce evidence at the hearing of, the appeal concerned), ...
Like Senator Mullooly I too seek clarification. In other words can anybody else adduce evidence that might be helpful to a person's case in an appeal situation?
Like other speakers I had a clear note taken that section 3 (3) was somewhat vague and needed some clarification. I would like to ask the Minister if there is an ultimate time limit of six months. Does the word "thereafter" refer to the period after the date of application or does it refer to the six months? It needs clarification and perhaps amending if three Senators have the same points to make on it. It may need to be amended at some stage later on.
This section has aroused an amount of interest and a number of questions have been raised by quite a few Senators. On section 3 (3) the principal question has been raised regarding the six months situation. It provides that the Commissioner of Valuation shall cause every application to be determined as far as possible within six months of receipt of same and shall issue a list of these determinations on a quarterly basis. Once the six months limit is mentioned, if he is not in a position to determine the valuation at the end of six months the commissioner would be under an obligation to explain the delay beyond six months to all the parties involved. We do not envisage that will happen very frequently. It is a legal term to allow the commissioner to have the flexibility in the event of legal complications pertaining to intestate situations, or documentation not being available as a result of somebody dying while the valuation is going on, or things like that. Information would be sought and for certain reasons that information could not be brought forward and, until such time as the information was available, and all the information that the commissioner felt he needed and could be made available to him was available, he could not determine the valuation. Consequently it is to allow that flexibility to the commissioner that this is inserted. As far as we are concerned that situation will occur very rarely. We would not envisage much difficulty there.
Senator McCormack raised a point on section 3 (5) (c). It provides that the tribunal shall transmit a copy of every notice of appeal to all affected parties and such parties shall be entitled to be heard and to adduce evidence at the hearing of the appeal by the tribunal. So anybody affected by the decision would have to be notified and they would be entitled to be heard and produce their documentation and their oral evidence there. Senator McCormack also raised a matter on section 3 (1) pertaining to revisions and new valuations. This refers to revising existing valuations and new property which has not yet been valued could now be included. An application could be made by the property owner, the local authority, or an officer of the Commission of Valuation to have this new property included and it is to allow that flexibility that subsection (1) exists.
Senator Mullooly mentioned identifying the owner or the occupier. One must take all reasonable steps to verify the owner or the occupier of the property. Local authorities have a vested interest in ensuring that this system works well because, if they cannot identify who owns the property, or who is using the property, or for what purpose the property is being used, levying rates on it would be absolutely futile because they would not be able to collect the rates. They would co-operate and the Commissioner of Valuation would be obliged to try to establish within reason the exact person, or persons, or company, or otherwise, who own or occupy properties and for what purposes the properties are used.
When an appeal is before the tribunal it should be open to anybody to apply to the tribunal to be heard in relation to that appeal and not confined to those people who have received a copy of the notice from the tribunal. I agree that the tribunal will send a copy of the notice to all persons who appear to them to be directly affected by the determination of the appeal, but there may be other persons directly affected by the determination of the appeal and, as the section now stands, it would not be open to such persons to be heard by the tribunal at the hearing of the appeal.
I am slightly confused as to what the Senator has in mind because the onus would be on the tribunal to utilise all resources available to them, their own office, own staff, the Valuation Office, the local authorities, I presume the Land Registry Office, if necessary, and whatever information would be available to the tribunal when serving notices. If the tribunal had to sit in judgment and somebody not directly affected by the case to be determined was allowed to come in to make a case the tribunal would probably never get through the valuations. If the tribunal then had to communicate the reports or their decisions to other people who might have only superficial interest or a public interest the thing would get far too bureaucratic and cumbersome and there would no systematic decisions arriving. Consequently we will have to be clear on exactly who would be affected, exactly who could make their submissions. I presume the appeal system would allow other people who felt aggrieved by any decision and might not be communicated with regarding the decision to be made to make their case to the tribunal and, on a point of law, to the High Court.
I do not believe anybody and everybody should have the right to be heard by the tribunal but persons should have the right to apply to the tribunal to be heard in connection with any particular appeal which might be before the tribunal. When applying to the tribunal they would have to state the reasons they felt they should be heard in relation to that appeal and it would then be a matter for the tribunal to decide whether they should be heard in relation to that particular appeal.
There is nothing in the Bill that prevents anybody from making that application. Once it is not debarred in the Bill it can occur. It would then be a matter for the tribunal to decide whether that person has a right to be heard. As public representatives I am sure Senators are all aware of people who have particular interests in certain cases and the motives of those interests or the justification for those interests often cannot stand up.
What criterion is used in relation to those valuations or how do the Valuation Office arrive at a set figure? Is there a criterion used because I have a feeling that valuations, particularly in the West of Ireland, are very excessive. They are far too high especially in the case of business houses. The turnover in some of those places is very very small and the Valuation Office are being guided by the business being transacted in the bigger centres where you have a bigger population and a higher turnover. Is there a set criterion for arriving at valuations or how do the Valuation Office arrive at those figures?
There are various criteria laid down for valuations. I know this is a very important matter for public representatives and perhaps I should read all the information I can give Senators on this matter. Rateable valuations are based on the net annual value of particular property under the provisions of section 11 of the 1852 Act and section 5 of the 1986 Valuation Act. In practice the majority of valuations have over time departed from the annual value-letting value-annual rent concept of the 1852 Act and the 1986 Act has not been in force long enough to re-establish this as a basis for all rateable valuations. The net annual value concept, if fully applied, would mean that all rateable valuations would be fixed at a fraction of the annual value-annual rent of the particular property at a particular date. This would, in effect, mean that the valuer would first establish the letting value of the property and the rateable valuation would then be calculated by applying a fraction to this amount.
The principle is best illustrated in the ILAC Centre where rateable valuations are established on the basis of one hundredth of the 1981 annual rent. This method of valuation is not, however, in widespread use and rateable valuations are in the main calculated by the comparative method of valuation. Under the comparative method, similar circumstanced properties, that is, properties of similar size, location, quality and use, attract similar rateable valuations. In normal circumstances properties, particularly in the provincial and rural areas, which normally would not be properties that are let, the valuation would be based on comparisons with other similar properties in size, in location, that is, front street, back street and so on, quality, the quality of the property and the use of the properties. In practice the valuer inspects the property, notes the location, the size, the quality, the use and the general structure and then seeks to find similar properties that are already valued — preferably with their valuations established at appeal — and basically values the subject property at the same price per square metre as the relevant comparisons.
For the once off properties, that is, specialised properties where there are no direct comparative properties already valued, the valuer will normally base his valuation on the capital cost. In these circumstances the valuer will first establish the capital cost and then seek to fix the valuation on the basis of a fraction of the capital cost. Because of the lack of comparative evidence in these cases and the absence of an established fraction of capital cost, these particular rateable valuations are often finally decided in the courts. I hope that helps to clear the air on how valuations are determined on properties.
I am not surprised that Senator Hussey would raise this, coming from Galway, Glenamaddy I understand. This brings me back to my original query as to whether the fourth report of the Commission on Taxation had been consulted in the process of preparing this legislation. The answer I was given was that it did not directly impinge on the particular provisions of this Bill but that it would more properly belong to a general revision, the kind of consolidation and codification that I already spoke about in my Second Stage contribution. On page 102 of the fourth report it discusses defects in the operation of the valuation system. I will read paragraph 24 of that report. There must be an ancestral or folk memory lurking in the background of Senator Hussey's consciousness that he raised this here on this section of the Bill. It reads:
The defects in the operation of the valuation system are highlighted by the results of the revisions of buildings' valuations carried out in Galway and Buncrana. In the period 1946-1950, comprehensive annual revisions, excluding land and railways, were carried out in Galway borough and urban districts on the basis of 1914 letting values which were substantially below the current letting values. This resulted in an increase of 52 per cent in the total valuation of Galway borough.
I think lurking there in the background — not that Senator Hussey would have been active politically at that stage or anything like that — is a folk memory of that sudden hike as a consequence of that revision. I find what the Minister had to say about it particularly interesting. I would exhort that when the revised complete statute sees the light of day very close attention should be paid to the analysis of this matter in the fourth report of the Committee on Taxation, that some of the recommendations will see the light of day in aspects of our legislation and that this report, like so many reports, will not merely be consigned to gathering dust on the shelf.
I would like to refer to the defects in the valuation system. I am very interested in the figures Senator Bulbulia has mentioned here about the borough of Galway and the 52 per cent increase in the valuation rates as a result of that. Having a very small property in the borough of Galway myself——
The Senator is only beginning.
That is right.
A small rateable property.
It is not a small rateable property. I saw the Minister looking in at it the other day when he was passing. The Minister referred to the quality of the property. I do not think that should be a criterion because somebody may improve the quality of his property as I did myself with the property I have. I had my valuation changed from £3.50 to £25 and that was a lot more than a 52 per cent increase in the borough of Galway for a very small property. There should be some incentive for a person who improves his property and does it according to the now strict planning regulations which make you put in teak fronts and various other aspects in keeping with the area in which you are improving your property. If a person is penalised in that manner through the planning process, he should not be further penalised on the valuation of his property. Having improved the quality of his property for the sake of the area he is in, and for the sake of the upkeep of the area he is in, and for the sake of making property look right in that area and because of the planning regulations, even apart from his own initiative in doing that, I do not think that should be used as a penalty clause. I would like to hear the Minister's response to that.
I can see merit in what both Senators have said. With reference to Senator Bulbulia's repeated querying pertaining to the report of the Commission on Taxation, we will be looking at this in the restructuring of the Valuation Office and it is something that will be borne in mind. I am sure the new tribunal will also be taking the deliberations of that report into account. This illustrates the need for a more modern code for the whole valuation process. We admit that the present system is not absolutely perfect and this is why we need the modern code to take account of all the major changes that have taken place in property and in technology over the years. Going back to Senator McCormack's point — I know the attractive property he has in the fine location near the city centre — I presume——
The political office — would there be any reduction for that?
We had better not speak about that here. We are only based here. It does not matter what services are given; we are only based on this actual property. I presume that capital allowances can be made under the tax codes for the input in upgrading the property but the Valuation Office's position would be that once you improve your property, improve your asset, make it attractive, it should create a better commercial operation and create more financial resources for the property occupier or the property owner, whoever is responsible for the payment of the rates and thereby warrants an increase in valuation. Perhaps it is something that could be looked at in the future as an incentive and an acknowledgement of people's input into upgrading, improving and renovating their properties. Maybe some allowance could be made for that similar to allowances made in the past under the old rating system.
In the borough of Galway and in other boroughs there were special designated areas — it is a separate problem — but the people outside the special designated areas are at a serious disadvantage now even though we all welcome the benefit of the designated areas in providing very generous incentives for people to develop in them. However, it has meant that property outside those areas in the boroughs concerned — Dublin, Cork, Waterford and Galway — are at a severe disadvantage. The same amount of money has to be spent in improving property outside the designated area as inside the designated area with none of the advantages attached. Those things must be looked at in the valuation of new property in the borough areas.
The main reason I have raised this point is because over the years I have seen a steady increase in the valuations particularly of businesses in small towns. I know those people cannot afford to pay the rates that are being levied on them. They went to the trouble of renovating the premises — in many cases those would be licensed premises where the trade is only a night one and no business being carried out there during the day — and they are finding it very hard to make ends meet when they have to pay rates, electricity and all the other bills they have to meet.
We all encourage them to do up their premises, to renovate them and make them more attractive for tourists and for others who might like to use them, but yet after having carried out all that work and going to a lot of expense they find that in many cases the valuations on those premises have doubled, trebled and in some cases increased even more. This has created problems for many businesses and it is for this reason I raise the point. I would like the Valuation Office to look at the local situation where you have in many cases a dwindling population and where you have not got the turnover of business. There should be a special case made for those people.
The valuations in the small towns should not be based on the turnover you would have in a city like Galway or Limerick, Dublin or Cork where you have a large and expanding population. In recent times we have a dwindling population in small towns as the young people are going away. The Minister is aware that in our own area in County Galway there are many small shopkeepers and publicans who are finding it extremely difficult to make ends meet and they find in many cases that when they extend their lounge bar and carry out some improvements the valuer from the Valuation Office is down on them immediately and the valuation is doubled and trebled. This is unjust and immoral in the present circumstances.
It is a pity there is such a major disincentive for people to improve their property, that they are instantly clobbered with a much higher valuation. I should like to quote again from the Fourth Report of the Committee on Taxation, page 102, paragraph 27. It is from the section dealing with defects in the operation of the valuation system which is what we have been talking about. It states that:
It is often claimed that valuations are so out-of-date that they must inevitably lead to anomalies and inequities in the incidence of rates. Conversely it may be argued that old buildings involve heavy outlay in repairs and are not only costly to maintain but to service with heat and light. Since extensions and improvements generally give rise to revaluations, commercial and industrial buildings are more likely to be up-to-date than residential property.
It goes for the argument that the valuation given to the revamped lounge bar and extension is the true valuation and that everybody else ought to catch up somewhere along the line. This is the opposite of what Senator Hussey has been saying. His point, at the present time of recession, has more of my sympathy than recommendations in this instance from the Committee on Taxation.
The purpose of the Bill is to update the manner of dealing with valuation and bring it into line with modern requirements. I always get worried when we talk about things being done in the interests of so-called efficiency but even though I get worried I must say that the terms of section 3 have to be welcomed. There is scope and opportunity in the section to improve the legislation as a whole, in other words, to carry on with the process that was begun in 1986 of bringing 19th century legislation closer to the 20th century. We have over the years, not only in regard to this legislation, got so centralised that things are clogged and complicated and according to the social welfare commission report of 1986 there are 36 different rates of child allowance. This may not seem relevant to the question of valuation but it is relevant to the way in which we deal with legislation and the way we are slow to amend it and take things out of the 19th century. For example, there are 23 different bodies responsible for the agriculture industry, that is, according to The Irish Times of 2 October, 1986.
The function of the commission, apart from taking a more global look at things and defining who the owner or the occupier might be of a premises, will be to make the whole question of dealing with rating more compact and more efficient. I am cynical about the efficiency side of it but when you see people making an effort you have to congratulate them. All our experience has been that we are being progressively deprived of opportunities for spontaneity in local and regional areas. This will give us an opportunity to get out of the situation in which we have found ourselves overrating in general. We have this mentality that everything has to be referred to central Government. Please God, with the commission being given much more clout and its scope widened and working in conjunction with the tribunal, it should do a good job for the people who are affected by rates.
The net result of all this failure to take ourselves out of the 19th century has been that all the linkages that should have been there and that were essential to development have been frustrated. I do not know if it is appropriate to the section but perhaps another day will show that perhaps it is not tribunals, or commissions with which we should be concerning ourselves with regard to rating but rather that we are badly in need of efficiency which can only be cured by a very severe dose of reforms, but reforms that will not check the energy and industry of people and will in fact bring about real standards of uniformity, real arrangements regarding classifications, etc., arrangements that are very defective at the moment.
I will not go into the other areas where money is available at this moment because it is not appropriate to the Bill. The Commissioners and the Tribunal, will have to deal with this section as well as every other section and it is interesting to note that at the time of our independence we were, in fact, one of the richest countries per head in Northern Europe. After 60 years we have fallen very far behind and we are in fact now dealing with the rating system as a whole. We are at the very wrong end of the league table with regard to this but I hope that the terms of section 3 and the terms under which the tribunal will function and also the terms of Schedules 1 and 2 will be wide enough to bring about a greater standard of uniformity and a fairer approach to the whole matter of rating whether it involves a businessman, a State-sponsored company or somebody who is in the fishing area, in forestry, mines, minerals, coal yards, quarries, etc. Let us hope that this is a beginning. The section itself is worth commenting on for that reason.
We have had excellent contributions from a large number of Senators. A number spoke about the disincentives for improving one's property and risking an adjusted valuation and increased valuation. I can concur readily with the contributions of my colleague, Senator Tom Hussey, and indeed I can identify with many of the problems he has highlighted. The high increased valuation can often be a disincentive and a discouragement to people in business particularly with a shortage of disposable income and not in a position to meet their demands. I think that the new Bill will create an opportunity for people in this situation to have a more expedient line to having valuations revised. They can report their situation to the local authority who will notify the Commissioner of Valuation and he will determine the revised application. This determination can then be appealed to the new Valuation Tribunal and this again may be appealed to the High Court on a specific point of law if a specific point of law exists.
Unfortunately, there are disincentives but this is part and parcel of a tax system all over the world, particularly of our own tax system, which must be equitable and be seen to be equitable, I do not think there is anyone who can say that he likes paying tax. The higher the value of the property based on its size, location and quality the more income one should earn; ergo the more tax or rates one should have to pay thereafter, in order to ensure that there is equity in the tax system the factual position pertaining to income is taken into account and rates are set off as an expense to ensure overall equity in the revenue area. We hope that now under the proposals contained in this Bill that it will be easier for people to have access to revised valuations, get a fairer and more equitable decision and, based on the equitable tax laws we have, that equality of decisions in the valuation area can be matched by equality of performance in the revenue area.
I understand that section 9 contains the provisions in relation to payment of expenses incurred in the administration of the Act. Would the Minister be in a position to give an indication as to whether he feels that this will he a considerable sum of money or is it a modest sum? I understand it to say in the explanatory memorandum on the financial implications that the objective of the Bill is to provide a more effective valuation system without any additional net cost to the Exchequer and that the staffing implications are being considered as part of a review of the Valuation Office operations as a whole. Could I knit that last point, the one that is in the explanatory memorandum, intersection 9 which refers to the usual provision for the payment of expenses incurred in the administration of the Act and ask if there is an anomaly there or could the Minister indicate what exactly is involved in funding the provisions of the Act?
My own interpretation of the situation is that section 9 empowers the Minister for Finance or the Minister for the Environment or both to pay the expenses. That would include the salaries and the expenses encountered by the Commissioners of Valuation and by the Valuation Tribunal and of course also the Commissioner of Valuation himself and his staff. They would be paid out of either the Finance Vote or the Environmental Vote as distinct from a particular fund having to be created to pay those expenses and also as a protection to ensure that the expenses incurred in valuation, be it the commissioner's expenses or the tribunal expenses, would not be levied on those whose valuations may be revised. It is intended to protect that situation and it is also a enabling mechanism to ensure that the State can discharge a statutory responsibility for discharging the salaries and expenses incurred by staff employed either on a permanent or temporary basis acting on behalf of the State.
Just one matter: For the great attention paid to detail in regard to the poles and lines and so on, we should congratulate all concerned.
May I make a short comment to the Minister if I am entitled to — as I understand I am — in regard to the question of revision in the fifth year? I think this is referred to in section 4 (8) of the Bill. If, for example, the ESB or somebody like that built a building say, in the first year or the second year, can the Minister request a revision sooner than the five year period? Another point on section 5 (3), will the fee, in effect, be a possible High Court cost? Is that what is expected in this section and is there a chance that this fee could in some way be refundable? Perhaps an explanation is necessary on that particular matter.
Regarding the first point on section 4 (8) the answer is that the Minister may request a revision of the global valuation of any particular utility sooner than every five years, if necessary. The second question I am not too clear on.
On section 5 (3) I am just wondering will this fee in effect be a possible High Court costing.
No, it is not a High Court costing. The purpose of that section is to ensure that no unnecessary or unwarranted demand would be placed on the tribunal, that no futile demands would be placed on the tribunal for the sake of creating frustration or frustrating their efforts. In order to guard against this, the tribunal will have the right to charge a fee under regulations passed and sanctioned by the Minister for Finance for any requests for valuations.
That is not refundable, I presume?
No.
On Report Stage, on sections 10 and 11 I would like to welcome the democratic criterion contained in both of these sections because they both talk about any regulations made under — in the case of section 10 — this section will be laid before each House of the Oireachtas and in the case of section 11 provides for the laying of certain orders and regulations made by the Minister for Finance under the Act before the Houses of the Oireachtas. This is a change and a welcome change from the old formula whereby the Minister could make an order and lay it on the Table of the House and after a period of 21 sitting days the order would pass. I understand there is to be an improvement on that situation and a welcome improvement and a soundly-based democratic improvement. I would like to register my comments on that matter.
I would like to thank the many Senators who made very excellent contributions and I shall be noting that in the Dáil when the Bill comes before the Dáil. I would like to take this opportunity to thank all Senators for their co-operation during the year and to wish them a very happy Christmas.
