I am opposing section 7 simply to establish the principle that the fund should be ring-fenced and not used for other purposes.
Motor Vehicles (Duties and Licences) Bill, 2001: Committee and Remaining Stages.
I believe the fund is already ring-fenced. This Bill follows the existing precedent. I mentioned at Second Stage that perhaps reasonable expenses could be deducted from the driving licence fund. It would be helpful if we had a figure for that in relation to the motor taxation section. Perhaps the Minister of State could clarify if departmental expenditure, as distinct from local authority expenditure, is also recouped. All motor tax is collected by local authorities. It finds its way to the fund and is then redistributed to the various local authorities and there is an equalisation fund involved also.
On the point raised by Senator Manning about payment of the cost of administering driving licence fees from the local government fund, the issue is quite simple. The costs involved are minimal and will have no material effect on the local authorities.
It may be helpful to Senators if I set out the background to section 7. In essence, the purpose of the section is to provide that the expenses incurred in issuing driving licences and the administration of miscellaneous fees and duties shall be recoupable by the Minister from the local government equalisation fund and the local government fund. Under the legislative provisions establishing both those funds, specific provision was made for the making of certain payments into and out of the funds.
In relation to the income side of the fund, section 5 of the Local Government Act, 1998, provides that the fund will be financed by an Exchequer contribution, the proceeds of motor tax and certain fees and duties, including all driving licence fees and duties collected by local authorities. On the expenditure side, payments may be made out of the fund towards general purpose grants and non-national road grants. The law also provides that the costs incurred by the Minister for the Environment and Local Government in collecting the motor tax are payable out of the fund.
Section 7 is essentially a technical amendment of the provisions contained in section 6 of the Local Government (Financial Provisions) Act, 1997, and the Local Government Act, 1998. It provides that, in addition to the costs involved in the administration of motor tax, costs incurred by the Minister in the issuing of driver licences shall also be recoupable from the local government fund.
Average annual income to the local government fund from the proceeds of driver licensing amounts to some £6 million. Average annual expenditure by the Minister in production of driver licences over the last three years amounted to less than £350,000. It is considered entirely appropriate, in terms of consistency, that the costs incurred in the collection of driver licensing fees should be recouped in the same manner as the cost relating to motor taxation which the Minister is collecting on behalf of local authorities. This provision is aimed specifically at striking a balance between income and expenditure requirements of the fund for local government purposes. Section 7 is aimed only at bringing equity to the treatment of the income and expenditure elements contained in the fund. The costs associated with driving licence administration are relatively very small indeed and would have no material effect on the fund or on the finances of local authorities. This year, it is estimated that the fund will amount to over £720 million. The annual average cost of administration of the driving licence regime over the last three years represents less than 0.05% of the fund, or less than 1/2000th.
I thank Members of the Opposition for their agreement and co-operation in completing all Stages of the Bill. It was eminently sensible given there was little contention in relation to it. The Bill merely regulates what in effect is taking place under the Finance Act, giving it a statutory footing.
I thank the Minister for coming to the House and for taking on board the arguments put forward. We look forward to his return in a couple of weeks for the local government legislation, a more serious Bill which I am sure will generate much debate in the House.
I thank the Minister for the very clear and courteous way in which he handled the Bill – it is always a pleasure to do business with him.
I thank Senators for their contributions, some of which were very interesting – we have noted what has been said – and for the speedy passage of the Bill. It was very easy for me to deal with the Bill given the co-operation of all sides of the House.