The courts are perceived by the public as independent. This is most important. It is a procedure that will ensure openness and transparency on a sensitive issue.
Senator McGowan suggested that the Bill would result in a decrease in the income local authorities can generate from service charges. As this suggestion has been repeated over the past number of months, my Department undertook a spot check on local authorities and the returns to local authorities over the past number of months. The opposite has been happening. The returns on the payments made to many local authorities for the first number of months of this year are up substantially on the returns of last year. This argument cannot, therefore, be sustained.
I fully appreciate the importance of service charges for local authority revenue. Steps have been taken to ensure that collection rates will not suffer from the introduction of the Bill. It must be remembered that the power of disconnection has not been removed from local authorities. Indeed, it will now be backed up with an order of the courts. In addition, the Finance Act, 1995, provided for a new income tax allowance in respect of service charges paid on time. It is a significant incentive. Furthermore, the Bill provides that where a supply is disconnected the consumer will, unless there are special reasons to warrant otherwise, also be liable for the costs and expenses incurred by the local authority in its application for a water discontinuance order. The consumer will also be liable for the disconnection and subsequent reconnection costs. This is further disincentive for people to refuse to pay.
I am confident that the Bill will not result in a fall off in the local authority collection levels. The evidence suggests that the opposite is happening. A once off survey of local authorities with regard to collection rates for the first quarter of 1995 reveals that in more than 50 per cent of cases, collection rates were higher than in the same period in 1994. By giving statutory backing to the new procedures, people will be in no doubt as to the possible outcome of the refusal to pay their charges. The Bill will encourage, rather than discourage, payment of charges.
Senator McGowan suggested that there was no need for a study of local government finance. Is he happy with the present situation? If he is not, something has to be done. The Government is following the proper course. It is fully committed to addressing the issue of local authority funding which has not been adequately addressed by successive administrations since the rates were abolished in 1977. It is not possible to have real and meaningful local Government unless a proper funding base is established. It is my aim that any decisions necessary, some of which may be difficult, will be brought to Government in the short term.
I am certain that all Senators agree it is time for the finances of local authorities to be sorted out once and for all. Everybody will have an opportunity to give their views when the study is completed. It will be concerned with addressing local authority funding in a realistic way. In tackling this issue now and over the coming months, we can bring about an effective and meaningful local government system. The time-frame is tight but I am anxious that progress is made, the right decisions taken and the broadest consensus achieved. The study will deal with the real problems of local authority funding and it will not avoid any issues whatsoever.
One of the problems of the present discontinuation policy is that it differs from area to area. In this respect Senator Honan said that County Laois has a unique process for recovering water charges. The Bill provides that a minimum standard of care is now being afforded to water consumers in all local authority areas.
In a graphic contribution, Senator Cregan outlined the manner in which our cities and urban areas have been run down in recent times. It is a commentary on what has been happening in local authorities because of the absence of policy. I understand that amendments have been submitted, but I find this difficult to understand because when the Bill went through the Dáil the Opposition failed to table any amendments. I compliment all the Senators who contributed to the debate and I hope the Bill will now be passed.
