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Seanad Éireann debate -
Wednesday, 17 Dec 2008

Vol. 193 No. 2

Motor Vehicle (Duties and Licences) (No. 2) Bill 2008: Second Stage.

Question proposed: "That the Bill be now read a Second Time."

The primary purpose of this Bill is to give legislative effect to the increases in motor tax rates and trade plate licences contained in the financial resolution on motor tax passed by Dáil Éireann on budget day, 14 October 2008. The Bill provides for the same increases in motor tax as contained in the financial resolution, namely, an increase of 4% for cars below 2.5 litres, and CO2 bands A to D, and an increase of 5% for cars above the 2.5 litre threshold and CO2 bands E, F and G. Rates on goods and other vehicles and trade plates also increase by 4% with no increase for electric vehicles. The new rates will apply to motor tax discs and trade licences taken out for periods beginning on or after 1 January 2009. It should be noted that the increases in motor tax rates since the year 2000, including the current increases, are below the inflation rate over the relevant eight-year period.

The Bill also contains a minor technical change by relating the definition of "CO2 emissions" directly to the definition in the Finance Acts where it is used for the purposes of the vehicle registration tax system. The amendment in this Bill means that all the relevant definitions common to both motor tax and VRT derive from one source and ensures uniformity in both tax systems.

The Bill as initiated was also amended on Committee Stage in the Dáil to provide equality between 2008 cars registered in this country and those first registered abroad in the first six months of 2008. The last paragraph, 6(g), of the Schedule to the Bill, contains the amendment. This Bill does not introduce novel arrangements for the taxation of cars. We are less than six months into the operation of the new system of CO2 based tax for new cars and the Bill which introduced those significant changes was discussed in this House only last March.

It is clear, however, from early data that the system is having a significant impact on purchase decisions in the market. The trend following the first five months of operation is that just under half of the cars in the new system are in the second lowest B band category, with 29% in C band. The three lowest bands A to C contain 85% of the CO2 car fleet. The industry itself has stated that the new system is working well from an environmental viewpoint, with indications of an average reduction of 20g in CO2 emissions per km per vehicle since the system came into effect. The CO2 car fleet now contains 48,019 cars. This corresponds to 2.48% of the entire car fleet and this will continue to grow as new cars replace older cars in the fleet. It is also clear that the new taxation system is bringing a focus to environmental performance of vehicles like never before. The industry has transformed the way it advertises new cars with particular emphasis now being placed on the emissions levels of cars.

Versions of CO2 based motor taxation systems have now been introduced in 14 EU member states. These policies are having a profound effect on how the car industry responds to the challenge of climate change right across Europe. This will be further reinforced by the Commission's proposals to set limits on emissions, which Ireland strongly supports.

The way in which we consider our relationship with cars is just one of many issues to be addressed if we are serious about our climate change obligations. This debate is an opportune time to reflect on those issues in light of the agreement on the EU climate package which was agreed by the Heads of Government last week. As part of this deal, 27 countries have taken on unilaterally new legally binding post-Kyoto greenhouse gas emissions targets. As I said last week when I addressed the UN conference on climate change in Poznan in Poland, the EU leaders' agreement must be seen as a first step towards a new global climate agreement. Europe has said it will reduce unilaterally its emissions by 20% compared with 1990. We have set out in detail how this will be achieved but now we must go further. Europe is ready to step up to a 30% reduction as part of a global climate agreement. While Ireland had supported the Presidency and the Commission in pushing for a package that was stronger than that finally agreed last week, I hope this move by Europe will encourage other major countries to propose their own post-Kyoto reduction targets and other new commitments.

A new US Administration under a President who promises to lead the way on climate change offers great hope that agreement on an ambitious target can be achieved next year. The EU package agreed last week still represents an enormous challenge for Ireland. We must now press on with the serious task of transforming ourselves into a low carbon society and economy.

One further car related initiative which I would like to mention is the decision by Government to establish an interdepartmental and agency group to look at deployment of electric vehicles, which group will be overseen by my colleague, the Minister for Communications, Energy and Natural Resources. It will examine the best way forward to promote the use of electric vehicles in Ireland. A target has been set of 10% of all vehicles in the transport fleet to be powered by electricity by 2020. This will represent up to 250,000 cars on Irish roads over the next 12 years. Tax incentives have been introduced for businesses to purchase electric vehicles by allowing them to write off 100% of the cost of purchase against tax under the accelerated capital allowance scheme.

Sustainable Energy Ireland will also be funding a €1 million project to research, develop and demonstrate on a national basis alternative transport technologies, including electric vehicles. Sustainable Energy Ireland has published a buyers' guide and a cost of ownership calculator to aid individuals interested in purchasing electric vehicles. I have not increased the charge for electric cars in the Bill, maintaining the position I adopted last year.

The move to change the car fleet to a more sustainable basis poses challenges for protecting local government funding. The introduction of emissions-based vehicle registration tax and motor tax had a dual objective of encouraging a move to lower emissions vehicles while protecting central and local government revenues. It is my intention to keep these dual objectives under review, in conjunction with the motor industry, in the light of experience of the new system.

The sole purpose of the Bill's changes in motor tax rates is to increase funding for local government. It is important to note the proceeds of motor tax are not paid to the Exchequer but directly to the local government fund for local government purposes. The motor tax element of the fund is also supplemented annually by an Exchequer contribution. The fund is used primarily to finance regional and local roads and the general purpose needs of local authorities. It is anticipated the proposed increases in motor tax rates will raise approximately €40 million extra for the fund next year.

Senators will be aware of the significant role the local government fund plays in financing local government. Local authorities will spend €11.7 billion in 2009 on capital and current expenditure. Some €1.6 billion will be available for allocation via the local government fund for general purpose grants, allocated by my Department, and for regional and local roads, allocated by the Department of Transport. More than €935 million in general purpose grants will be provided to local authorities from the local government fund in 2009. These grants comprise one fifth of the funding required by authorities to provide their day-to-day services. A sum of €564.5 million has also been allocated to the Department of Transport from the local government fund for 2009 for regional and local roads.

An additional sum of approximately €80 million will be allocated for specific local government purposes, including the operation of water services and the administration of group water schemes and the vehicle registration unit. It is a matter for each local authority to prioritise its spending across the range of services it provides and within the resources available to it. Equally, local authorities must ensure full value for money for the resources invested and seek the maximum efficiency across their operation. I am satisfied the general purpose allocations I have provided for 2009, together with the income available from other sources, will enable local authorities to provide an acceptable level of service to their customers.

While I appreciate there will be calls for additional funding for local authorities, the problem is we are caught up in a severe global economic recession which requires all sectors to respond to new realities. That includes having less money to meet public expenditure demands. We cannot borrow our way out of trouble or return to the days of punitive tax rates that stifled economic growth and resulted in high unemployment.

Local government must also play its part in the difficult period ahead. With hard work and determination, we will get through these difficult times to a path to economic recovery and renewal. In this regard, I have urged local authorities to continue to exercise restraint in setting increases in commercial rates and local charges. It is important every opportunity should be given to the business sector to remain competitive in these tough economic times as a sound business sector is vital for the communities that depend on them.

One of my key objectives in office is to see local government play a much stronger and more visible role in the life of the local community. I am finalising a White Paper on local government which will contain significant institutional reforms. Changes to the way local government operates must be accompanied by measures which provide a greater link between local revenue raising and local expenditure. This is key to introducing greater local responsibility and accountability in decision making.

The Government has made a start in this regard in the budget decision to broaden the revenue base of local authorities through the introduction of a charge on non-principal private residences. This will be used to support the provision of local services. I intend to bring forward legislation to implement the proposed charge as soon as possible and to set out the detailed measures necessary to give effect to it.

The Bill consists of six sections with the new tax rates for all vehicles are set out in the Schedule. Private cars and goods vehicles make up more than 91% of the national fleet. For private cars, taxed on the basis of engine size, the extra cost for most motorists will be between €7 and €13 a year, that is between 13 cent and 25 cent a week. This relates to more than 50% of the national car fleet which is made up of cars under 1400 cc. For the remainder of the car fleet, up to 2 litres, the annual increases will be from €14 to €24 and from 2 litres upwards an additional €30 to €75 per year. The extra costs for 94% of the car fleet — those under 2 litres — will be between 13 cent and 46 cent a week. For private cars on the new CO2 based system, bands A to D will see an annual increase of between €4 and €17, while for bands E, F and G, the annual increases range from €30 to €100.

For goods vehicles the effect of the 4% increase will vary depending on the weight of the vehicle. However, 87% of goods vehicles are at the lowest level of charge, meaning they will pay an annual increase of €11, or 21 cent per week. A 4% increase is also proposed for trade licences, or trade plates, used by motor traders on vehicles temporarily in their possession, in lieu of taxing such vehicles. The increase for a pair of trade plates will be €12.

This is a short Bill of only six sections. Its purpose is to give permanent legal standing to the increases in motor tax introduced by a financial resolution passed by Dáil Éireann on 14 October 2008. I commend the Bill to the House.

I welcome the Minister and his officials to the House and thank him for his informative contribution. This Bill is essentially about raising motor taxes. It is a revenue raising exercise in which the motor tax receipts go to the local government fund. The Minister claims to be raising revenue for local authorities. However, while he gives to one hand, his colleague, the Minister for Finance, takes from the other because the local government fund has been cut from between 5% to 7% across all local authorities. Unfortunately, the motorist again is the fall guy.

The Bill provides an opportunity to compare transport choices as well as debate other issues such as motor vehicle choice, road safety and public transport. It is widely acknowledged that transport is responsible for a large percentage of Ireland's greenhouse gas emissions. This raises questions about how emissions can be reduced and the Government's role and responsibilities in this regard. While I agree we must incentivise the purchase and maintenance of lower carbon emitting and more fuel efficient cars, the great irony is that we are not reducing our overall transport carbon emissions. There is increased dependency on car usage. Public transport needs urgent focus and attention, not the lip service we regularly hear from the Government's spokespeople.

Despite numerous assurances over many years, there is still no adequate bus competition in public transport. There is also much room for improvement in the promotion of usage by the public of our train services. I travel regularly by train from Waterford to Dublin. Normally, a train ride should be enjoyable, relaxing and an energy efficient mode of transport. However, I regularly see people standing on the Waterford-Dublin service from Kilkenny onwards. Not even hot teas or coffees are available. In short, it is a sub-standard service and not an adequate incentivised public transport system. We must incentivise rail travel. We must improve customer experience so people are encouraged to use trains more. Passenger comfort and services are a main factor in this.

Another factor is the frequency of rail services and the travel times. Travelling by train from Waterford to Dublin takes two and three quarter hours from Plunkett Station in Waterford to Heuston Station, Dublin. With transfers from home and from Heuston Station to Leinster House it can take a total of up to four hours and a half hours. The other day I was waiting nearly 35 minutes for a public bus connection from Heuston Station to Kildare Street. It is advertised that the bus comes every 20 minutes. That is not a good enough public transport service. That is why people are not using our public transport systems and there is greater dependence on cars. If I choose to drive, it takes me three hours, or a maximum of three and a quarter hours from my house to Leinster House. That includes idling in traffic so there is no incentive to use the train, although I try to use it as much as possible. How many thousands of people are like me?

Regarding roads and roads investment, the Minister, through this Bill, is essentially collecting increased motor taxes and handing them to the Minister for Transport who then allocates them to the various local authorities. There are many issues in the areas of road safety, road conditions and road maintenance that should be fully audited prior to the allocation of grants. The Department of the Environment, Heritage and Local Government or the Department of Transport needs to carry out a full audit of all local and regional roads in terms of the number of hazards and traffic accidents on the roads. There should be a full electronic database of all junctions, bends, and maintenance and re-surfacing programmes, down as far as even the inlets and drains on the sides of the roads. A database should be held by all local authorities for keeping a regular systematic programme of maintenance, and this should be accompanied by digital mapping systems for obvious accident blackspots and signage. This should be recorded and readily available to the public on databases. This system would introduce a more accountable, responsible system of road maintenance programmes that are funded through the allocation of the roads grants to which the Minister referred.

There is a very dangerous junction called the Tinhalla junction on a regional road in my area, the R680 between Carrick-on-Suir and Waterford city. It is a totally blind spot for those entering the main regional road. Despite numerous petitions from the public and notices of motion from councillors, the local authority claims it does not have the funding to improve this junction. The council has applied to the Department and has been refused funds. Perhaps the Minister and his officials may take up that issue because it is a very dangerous junction on a regional road that needs to be addressed. Funding has been sought but is not forthcoming.

A full audit and database of roads in our country should be an obligation of local authorities. This should be encouraged by the Government. The system is just too ad hoc at the moment. It is important to let motorists know the benefits of investment in the roads, especially when we are raising taxes. Then we can justify raising car taxes but not until then.

I note from recent reports that for the four-month period of July to October 2008, 80% of car sales were for the lower emission cars. In the same period last year, just 40% of car sales were for the lower emission cars, so the trend is very positive, as the Minister outlined. I acknowledge that and it is clear now that consumers are choosing more efficient cars. However, it is quite obvious from looking at forecourts throughout the country that cars are not selling in the current climate. Many people are tied into the old system of taxation.

I believe in electric vehicles and they should be promoted at every opportunity. There is major potential for the Government to incentivise the use of vehicles propelled by electricity. At last week's Oireachtas joint committee meeting, the ESB expressed a great interest in investing in infrastructure to facilitate the expansion in the use of electric vehicles. The Government has a role in this by providing incentives and resources, such as charging docks along national primary routes. There should be a programme for the roll-out of these systems to facilitate the recharging of electric vehicles when they come into use. This is an area that should be expanded upon. There is no vehicle registration tax on electric vehicles and tax breaks for business are available, but the Minister should clarify whether individuals can purchase an electric vehicle and claim a tax break. If not, why not? We should incentivise the area.

I refer to old abandoned vehicles, a problem I have raised on previous occasions. There is very little incentive in Ireland to dispose properly of the older, retired vehicles. We hear every day of too many incidents of abandoned vehicles left in fields and woods. We also hear of youths being sold these vehicles for as little as €50. They go rallying in very dangerous circumstances, with the registration plates and chassis numbers removed. This is a major problem and creates a burden on local authorities, fire services, the Garda Síochána and State agencies such as Coillte. It costs quite a lot every year. I recommend that the Department commission a report to investigate the cost of abandoned vehicles to the State. It would be worthwhile to create incentives for facilities that allow people, the car industry and local authorities to dispose properly of these vehicles. I ask the Minister to consider that.

Fine Gael opposes raising car taxes for the sake of revenue raising. The Minister outlined that we are trying to reduce carbon emissions. With a very poor transport sector, we are losing the battle in that sector. It is not good enough to raise car taxes without identifying other transport areas. The Minister will make some attempt in this regard.

The Government must tackle the local government funding system in a more transparent and equitable way. I look forward to the White Paper and the Minister's proposals for local government funding. We must have this national debate to which local authorities, councillors, citizens and Oireachtas Members are looking forward.

Why are motorists the soft target for increases to facilitate the local government fund? This policy discriminates against those dependent on cars, such as those living in rural areas, towns and villages, and regional citizens who are at a disadvantage compared with those in large urban centres. Urban centres have public transport systems, albeit limited, but the car is essential, not a luxury, in rural areas to get to school and to work. I ask the Minister to consider that. I look forward to contributions from other Senators.

Cuirim fáilte roimh an Aire go dtí an Teach. This Bill, although small, is very important. It is another element in the process of encouraging innovation in the use of motor vehicles. We are increasingly aware of the link between car usage and its effect on our environment. With this in mind, the launch of the new vehicle labelling system in June of this year was a welcome development. Changes to vehicle registration tax and annual motor tax for new cars registered on or after 1 July 2008 will see an improvement in the situation regarding emissions from vehicles.

Calculating on the basis of carbon dioxide, CO2, emissions from vehicles rather than engine size focuses on the effect on our environment of emissions from the cars we drive. Innovation is crucial if we are to deal with the issue of cars and our environment. Seven emission tax bands have been created and VRT and motor tax payable will now be determined by the relevant band for each vehicle.

It is reasonable to assume that, when speaking of the environment, the Kyoto Protocol and all that pertains thereto, we have been criticised as a country for not taking action to reduce carbon emissions. Positive thinking generates a positive response, and this is a positive response. There is an old saying that the most important step in a million mile journey is the first step, and this is that important first step. The purpose of these changes is to incentivise consumers to purchase vehicles with lower CO2 emissions, an important step in reducing national greenhouse gas emissions and in meeting Ireland's commitments for the purposes of the Kyoto Protocol. The clear objective of the new CO2 based tax structure for cars is to influence the purchasing decisions of consumers by rewarding the buyers of low-emitting cars and charging a premium on less efficient vehicles. It makes sense and will have long-term, positive effects for generations to come. Anyone buying a new car can now make a positive choice on investment and environmental grounds by purchasing a low CO2 emitting vehicle. This decision is within the remit of any individual.

Senator Coffey referred to transport difficulties and while it is not pertinent to the Bill I will respond to some of the comments he made. To keep it parochial, with regard to improving arterial routes everybody agrees and appreciates that if traffic moves freely rather than labouring on a long linear car park, which we all have experienced from time to time, this of itself will reduce carbon emissions.

During recent months, the N6 opened between Kilbeggan and Athlone. In the past week, approval was given to Westmeath County Council to go to tender for construction of a new bridge less than half a kilometre from where I live, which will allow Mullingar to be completely bypassed. With the M4 bypass will be the eastern bypass which will link the M4 to the N52 going across from the Kilbeggan road. This is a positive step with regard to keeping traffic moving and thereby reducing emissions.

A couple of years ago, I invited the then Minister for Transport, Deputy Dick Roche, to be our guest speaker at the annual Fianna Fáil business breakfast in Mullingar. He came and afforded a new status and priority to this stretch of road and this has been the engine which drove this project forward to getting the thumbs up for completion. This is the final stage of the project and it will contribute to reducing CO2 emissions.

Anyone who chooses to purchase a car with high CO2 emissions will have to pay a higher rate of motor tax, in addition to any price rise as a result of the VRT changes. It is a polluter pays policy and everybody agrees with this. In 1999 a EU directive introduced labelling for all new vehicles, including specific requirements to provide consumers with information on fuel economy and CO2 emissions. Our new system, introduced in July, will strengthen these existing EU requirements.

To return to Senator Coffey's point on transport costs, I drive a diesel car and it is not long since diesel was almost €1.50 per litre. During recent days, I saw diesel for sale in Mullingar for €0.959 per litre. This is a major change and it is welcome.

With regard to reducing the strength of cars, it has been proven conclusively that higher powered cars produce more CO2 emissions. The Minister has correctly taken the appropriate step. In this country, everybody will state that something needs to be done and criticise one. However, when one does something one is also criticised. So I say "do it" and be whatever to the critics because if it is the right thing to do it should be done. We have to tackle the manner in which CO2 emissions are being released into our environment at alarming levels.

With regard to the local government fund, I am a strong supporter of local government. It is an important element of how we are and how we live. The Minister is committed and, as Government spokesperson on the environment, heritage and local government, I am also committed to ensuring that in the lifetime of the Government positive proposals will be brought forward in terms of the White Paper and legislation. We must take on the job of improving local government.

Recently, the Government outlined its plans for 10% of the national road transport fleet to be powered by electricity by the year 2020. Our size suits electric vehicles and the country can become an effective test centre for the world's car manufacturers. A total of 200,000 electric vehicles could be on our roads in 12 years and that would be a ground-breaking development.

The Minister is doing everything he can to ensure that people use cars which have the minimum effect on the environment. The electric vehicles plan includes tax incentives for businesses to purchase electric vehicles. Businesses can write off 100% of the cost of purchase against tax under the accelerated capital allowance scheme. It also includes a €1 million project by Sustainable Energy Ireland to research, develop and demonstrate vehicles nationally. Assistance for individuals purchasing electric vehicles is also included as is publication of a buyer's guide and a cost of ownership calculator by Sustainable Energy Ireland. A national task force will be established to examine infrastructural options for national roll-out of electric vehicles, including street charging.

We are signalling our intention that we are serious about dealing with the issue of car emissions. The Minister stated that he expects considerable international investment to flow from this plan. We should all be aware that in 2008 we will have sent more than €6 billion out of the country to pay for fossil fuels. The electric car scheme would bring money back into the Irish economy and fuel our transport fleet with Irish renewable electricity.

We all need to be increasingly aware of the environment. Anything is welcome that can help us to reduce our fossil fuel bill and meet our climate change challenges. This plan could bring much investment and many jobs to Ireland. It has the potential to make Ireland a centre for electric vehicles. In these changed economic times such a development would be welcome and ground-breaking. As I stated, we must do what we can to reduce our dependence on fossil fuels. We know how fickle this market can be and we all saw the major increase in the price of fossil fuels. In recent months, I have seen people in the transport business going bust. I welcome the Bill and I commend it to the House.

Senator O'Toole and I will share time.

Is that agreed? Agreed.

I will speak for only two minutes. I welcome the Minister to the House, but this is particularly stupid legislation and the Minister knows that perfectly well. As a member of the Green Party, his slogan always was that the polluter pays. The polluter is not paying in this, the vehicle is being taxed. What the Minister should be doing, and he knows it perfectly well but his colleagues in Fianna Fáil would not agree to it, is taxing petrol, as it should be, on the amount used.

One could have a huge car, as I had until Southern Ireland asphalt in alliance with South Dublin County Council destroyed it, but I used it only occasionally. I do not mind paying that. However, the Minister would receive a great deal more money. It would be far more efficient and it would inhibit the consumption of petrol and the emission of fumes if the Minister did what he knows is right and taxed petrol. However, just like in the United States, it is unpopular. Will the Minister reconsider that?

I spoke to the Minister about a sophisticated ignition system. I know he is aware of it but I will send him another copy of it. I spoke with Mr. Halligan who, according to himself, never received a copy of it. Perhaps it got lost in the bureaucracy. I will send a copy directly to him as it should be explored.

Will the Minister examine the situation for taxi drivers in how this Bill affects them with regard to licences or registration? It is a disaster. There is a superfluity of taxi drivers and they have great difficulties. I put these on the record of the House recently and I will send the Minister a copy. A point made to me in a letter I received this morning is that because of the difficult situation taxi drivers find themselves in, they are coming in from the surrounding counties and flooding Dublin. Is there any way of using the tax system to indicate from what county taxi drivers come and try to ensure that in this difficult time they stay more or less in their local area?

Will the Minister re-examine the taxation on vehicles for the disabled? It should be reduced to zilch, zero, nil. Whether via VAT or some other form of taxation, people in this situation should be afforded preferential treatment as compared with those of us who are able bodied.

The first point made by Senator Norris was one I intended to make, so I will merely reinforce it. In France, for example, every angler has his own white van. Anglers do not have to pay tax on these vehicles and must pay only for the petrol they use. In other words, while petrol is more expensive in France than it is in this State, the motor industry can flourish in the sense that people can purchase cars without having to pay an associated tax, use them as they need them and pay tax on the basis of the petrol used. I understand an initial payment of VRT of some description is payable to the local authority, which is important.

In regard to electric cars, the reality is that Israel has decided to go 100% electric, with Renault, Peugeot and Citreon manufacturing electric cars for that market. Why are we talking about a target of 10%? Every objection that has been raised in regard to electric cars has been refuted. Instead of aiming for 200,000 cars by 2020, we should aim to go all the way. We have reached a stage where it can be done. Last week, I showed members of the Joint Committee on Climate Change and Energy Security a copy of a new electric car being produced by a company in Silicon Valley in the United States. Based on the chassis of the Lotus Elite or Lotus Elan, it is a smashing looking car, with all the attractive features of roadster-type cars. It can outperform a Porsche 911 from 0 to 60 mph and has a range of 260 miles. It meets all the requirements and overcomes all the objections that have been raised.

We must ensure that all car manufacturers conform to a defined standard for battery charging. We do not want a rerun of the war between VHS and Betamax 25 years ago, or blu-ray and its competitors more recently. It is a question of one simple decision; the manufacturers must get their act together and devise one system for everybody. Recharging an electric car should be the same as refilling a gas cylinder. In the case of a journey from Cork to Dublin, for example, the electric car's range of 260 miles is only marginally less than that of a petrol or diesel car. Instead of having to stop at some point in the journey and wait six hours to recharge the car, one should be able, in the same way as filling a conventional car with fuel, to drive into the battery exchange which is part of the service station and come out three minutes later with a new set of batteries. That can already be done but people are not aware of it.

The great advantage of electric cars, apart from the obvious one of reduced emissions, is that their use adds to our energy security. Batteries will be recharged in battery banks during the night, at the trough period of demand when electricity is cheapest. We have no electrical storage facility in the State, apart from Turlough Hill. The latter is some 75% efficient in the sense that of the amount of energy required to fill the lake, 75% is given back when it is let flow again. By contrast, the electric cars will be charged at night and will enhance energy supply.

The Minister, Deputy Gormley, should take the initiative on this matter. I knew the late Donagh O'Malley and recall his great way of doing business. He simply made an announcement and let the Civil Service worry about the details of implementing it. I recall saying to the Minister in the week of his appointment that he should do likewise. The problems of implementation should never get in the way of a good decision, policy or principle. We should simply make the decision to go electric and deal with any difficulties as and when they arise. The cars will not be confined to 50 mph or for city use only, as has been suggested. All the features people want can be delivered, in attractive vehicles which others will stop and admire. That is the way forward. As an island, we are in the best position of any European state to get started on this.

I see no drawbacks to such an approach, yet the Minister is reducing the target in terms of electric car numbers. There is no practical reason we should not aim for a take-up rate of 90% or 100%. The Government should provide support for the establishment of battery banks at various locations throughout the State. The number required is not large. All electric cars come with two chargers, one for use at home and one to be kept in the boot for use elsewhere. Most motorists with a diesel car will get eight to ten miles per litre. Given an average cost of €1 per litre, each mile driven in a diesel car costs its owner somewhere between 10 cent and 13 cent. Electric cars will cover the same distance at a cost of 3 or 4 cent per mile, which is some two thirds less.

There is nothing to stop us from taking this initiative. There is nothing futuristic about these vehicles, they are not something out of a Jules Verne book. Israel is already moving in this direction and there is no reason we could not be the first European country to do the same. It merely requires the drive to do it. I can find no argument against it that cannot be rebutted. It is of benefit to the industry, reduces carbon emissions and enhances our energy independence. Every aspect is positive and there are no negative implications. I ask the Minister to up the ante in this regard and make it work.

Senator Coffey referred to the difficulties he has encountered with road transport. I travelled by bus this morning from the edge of Senator Hannigan's constituency, a journey that usually takes one hour and 15 minutes by car. I got on the bus at 8.20 a.m. and walked in the door of Leinster House at 9.15 a.m. When the bus corridors work effectively, as they do on the N2 into the city, people will use them. The Minister for Transport, Deputy Dempsey, made this point at the weekend. People must have confidence that buses will arrive and will run smoothly. In continental Europe, people have no need to consult a timetable. They know a particular train will arrive at X minutes past the hour and that the bus they wish to catch will be there within ten or 15 minutes. If passengers have to check a timetable, the service is not working.

I am picking up on the issues referred to by the Minister in his speech rather than the detail of the Bill. We must examine the possibilities for rail freight as opposed to road freight. However, Iarnród Éireann is reducing its freight capacity. The rail system more or less closes down at 9 p.m. and is thus a wasted infrastructure. I have exaggerated here but only slightly. Freight should be moved during those times when trains are not running. Business and commercial vested interests of previous generations did not allow trains to be brought a further 100 yards or 200 yards to the docks at Limerick, Dublin and other cities. Business communities were always determined to block this type of movement. It should be the case that the majority of cargo is taken off the boats and onto the rail. Limerick docks is very busy, with two ships per day from Europort in the Hague. Currently, these containers are all going onto the roads. This is unnecessary and is merely a legacy left to us from the time when carters and carriers made their fortunes bringing goods from the dockside to the rail head, which was only 200 yards away. That day is gone and we should move on.

The transfer of taxation arrangements in terms of annual motor tax from an engine capacity to an emissions basis was a Green Party initiative which at the time was greeted with no small degree of cynicism by many in the political system. It has turned out to be an enormous success and the evidence of that success is that 80% of the cars bought since then are in bands A, B and C.

An attempt was made in dishonest political debate to ascribe the lessening of car sales to the introduction of a new taxation system, and that was accompanied by similar changes to vehicle registration tax, but if we consider the position of the three main car companies in the United States, the failure of new car sales is a global phenomenon that has much to do with the type of cars offered to consumers. The old gas guzzling type is a machine that is slowly disappearing from the world stage, something for which we should be grateful. Not only are people being offered alternatives in terms of different fuel types — biodiesel as well as standard petrol — we have also the onset of mass produced electric cars to which Senator O'Toole referred earlier.

The comment about the intentions of the Government in this regard was somewhat unfair. The Government has announced the radical measure that by 2020 10% of all vehicles on the road will be electric vehicles. That means that year on year from now we will have to sell 15,000 new electric cars in a context where currently there are probably fewer than 1,000 electric cars in the country. That is something to which it is worth aspiring. There will be obvious benefits in terms of our collective carbon footprint and transport will be changed.

Senator Norris spoke about the alternative to a tax of this type being a tax directly on petrol and linked to usage. There is no doubt that might seem on the surface to be a fairer tax but it would go against the argument made by Senator Coffey at the start of the debate that this proposed tax, in terms of emissions base, was unfair to people in rural communities. A tax based purely on usage would be very unfair to rural communities because of the distances from many services and large population centres. It was also unfairly stated that the price of petrol here has something to do with the level of taxation on a litre of petrol.

In comparison to other European countries — the United Kingdom, France and Germany — despite the fact that we have VAT and excise duties, taxes on direct uses of petrol are lower in Ireland than in any other European country. We have a capacity in that regard should we need to change it.

The other point regarding dependence on a tax——

Is the Senator saying he intends to raise taxes on petrol?

I am saying there are two arguments for it. First, it affects rural communities disproportionately and, second, despite what is being said by Opposition parties——

Which side of the argument is the Senator on?

Does the Senator want me to start again? I will do that. I welcome the introduction of this legislation and the fact that a Green Party initiative that was much criticised at the time has brought about a welcome change in car ownership and usage and a much better improvement on the previous system. Does that make it clear?

The Senator's party has destroyed the car market.

Cars are no longer selling.

Senator Boyle, without interruption.

If we had made no change in last year's budget and kept the current system there would have been a collapse in car sales this year.

We have a sub-standard public transport system.

That is an argument on which we will both agree.

To return to the point about reliance on taxes of this type for local government funding, there is an ongoing concern that local authority funding should not be dependent on car ownership.

We agree on that too.

In terms of the current system, we can also look forward to the report of the Commission on Taxation in 2009. Part of its remit is the way ongoing local government taxation will be reformed. I am confident that among the recommendations of the commission will be the degree to which this type of tax will be a mainstay of local government finance and the better alternatives.

In this year's budget we have the introduction of a charge on second properties which will help in terms of future local government finance. As that charge, levy or tax is underpinned with a valuation system, I can envisage that being a form of local government taxation as it is in every other European country we are a partner with in the European Union.

In criticising the way we fund local government now we must be clear that in terms of the alternatives that have to be put in place, it is not a question of reinventing the wheel. They already exist. It is about making the system fairer, making the ability to pay and collect easier and making finance available for direct usage in the local authority areas. At this stage this is the best levy available to us. It helps to a large extent in an economic environment where the other forms of funding — direct State funding and funding from the commercial rates base — have been necessarily contracted. On that basis, the rates not charged in the change of system and the additions being proposed in this Bill are fair. They are proposed on the basis that we must fill the hole in local government finance and do so in a way that reflects the fact that most people who are availing of local authority services, which include the non-national roads, contribute to some of the costs of each local authority.

On those grounds I welcome the Bill and look forward to the report of the Commission on Taxation in September in outlining the way local government finance will be more varied and effective following its recommendations.

I welcome the Minister to the House and commend him on his efforts with this Bill. Any Bill that strategically contributes to an improved environment in Ireland is to be welcomed. For all its flaws, we all agree the Bill will update what is an archaic motor tax system and bring it into line with the challenges we now face.

I have made this point previously, but as the economic situation continues to deteriorate it is worth reiterating. We cannot neglect our environmental duties just because the economic crisis has got worse. The respective fates of climate and credit are not mutually exclusive. In that regard the Bill will translate good intentions into quantifiable improvements in our carbon emission levels. While that is welcome, I suggest that in the area of environmental legislation there is an urgent need to move from tactical to strategic legislation.

This Bill deals adequately with a specific aspect of the overall environmental picture and, while I do not doubt the motivation of the Minister, or Senator Boyle, some people may question the motivation behind the Bill because a considerable amount of time has been spent discussing the benefits that will accrue in respect of the income for local authorities. When the Minister, Deputy Gormley, was in the Chamber earlier he mentioned that the local authorities can expect to see upwards of approximately €40 million in additional income next year. I reiterate the sentiments expressed by others in this House, and by Members in the other House, in questioning the rationale of attaching importance to an arbitrary funding model in what should be an environmentally focused Bill.

There are two fundamental problems with earmarking this legislation as a mechanism for local authority funding as well as the environmental focus. First, it is somewhat disingenuous to suggest that this Bill will constitute a type of sustainable funding model for local authorities in the future. By its nature the figure of €40 million additional income will decline in accordance with the success of this Bill. Therefore, if the environmental aspect of the Bill succeeds, its funding aspect will fail.

Second, the inverse is also true and therein lies perhaps the most unappealing aspect of the Bill. In attaching the declining financial fortunes of our local authorities to the environmental performance of our motorists, the Minister has placed the stakeholders in opposing corners of the debate. That is the criticism we make in regard to the funding. It is not whether local authorities need funding; it is the way the local authorities are being put at opposite corners to the environmental lobby.

Anyone who has served on a local authority, which I have done, will be acutely aware of the increasingly desperate financial position many county councils now face. I spoke to Councillor Eoin Holmes, a member of Meath County Council, last night and he explained in graphic detail how strapped is the council for cash. He said legislating to ensure local authorities, on the one hand, and environmentally conscious motorists, on the other, are turned into competing interests is not the answer. Senator Boyle said the Government could not increase local tax rates nor could it provide more money from the Exchequer and, therefore, he seemed to indicate he was in favour of a stealth tax. I hope the Commission on Taxation will resolve this issue next year because we are not happy that the success of this legislation could lead to a deterioration in the financial well-being of local authorities next year.

Twelve months ago, a report by Sustainable Energy Ireland outlined the scale of the challenges we face. It said a 7.1% increase in CO2 emissions had been noted in the transport sector alone compared to the previous year. In total, this sector represents more than one-third of all of Ireland's emissions. A recent report from the National Academy of Sciences predicted that global car use is becoming so huge that the impact of emissions from today's road traffic on the global temperature in 2100 will be six times greater than today's air traffic.

Single passenger private travel to work is a concept that needs to be tackled immediately. During my research on commuter towns in Counties Louth, Meath, Kildare and Wicklow, survey respondents suggested journey times to Dublin had increased by 30% over the previous five years. Taken at the maximum, that represents an increase of approximately 80 hours a year in the time commuters spend travelling to and from Dublin to work. That places an enormous strain on them and their families but it also has an impact on the environment. In commuter towns such as Dunshaughlin, Dunboyne and Rathoath in my constituency, it is typical for parents to get up before their children, leave and commute for an hour and a half or two hours to work before returning home after the children have been put to bed. Senator O'Toole referred to the availability of public transport in these towns now and, in particular, he mentioned Ashbourne, County Meath. It is possible to get to Dublin in less than a hour and I avail of public transport from my office in the town when I can. It is important that people are encouraged to avail of public transport and commuters who make the switch from cars to public transport should be rewarded.

Other countries have introduced smarter choices campaigns to inform commuters how to positively affect their pockets, quality of life and the environment by choosing public transport. The city of London is introducing tax deductible green bonuses to reward employees who leave their cars at home. The UK Government is investing Stg£100 million in a programme to speed up the introduction of new low carbon vehicles. This programme is a perfect example of the strategic model in which the Government should invest. A partnership involving the Department of Transport, universities, research agencies, transport companies and local authorities should come together and exploit new radical approaches to decarbonising road vehicles. This is the way forward and such a measure should be implemented.

This legislation does not go far enough. The measures included are worthwhile and necessary but radical thinking is needed, which spells out in the starkest terms how commuters can make better life choices and, in the process, help the environment. A Central Statistics Office report last week stated many commuter towns and villages in Counties Louth and Meath are suffering as a result of the economic decline. The majority of people in these areas will not see this as progressive legislation but merely another stealth tax or small financial hardship in an impossible economic environment. We need to encourage, explain and incentivise if we are to have any hope of bringing such people along with us on these issues.

As Senator Glynn said, a long journey starts with very short steps. The Bill represents a short chapter of a book that needs to be written quickly. It has holes and flaws and its scope is too narrow, but it should contribute to a cleaner environment and my party will not vote against that. I commend the Minister of State on introducing the Bill in the House and I acknowledge the good work done on Committee Stage in the Dáil.

I welcome the Minister of State and his officials. Like others, I welcome the Bill, which will lead to a cleaner and better environment. I also welcome the establishment of the interdepartmental group to examine the best way forward in promoting the use of electric vehicles. However, public representatives receive many letters and telephone calls from motor industry representatives about how they will be affected by the legislation. The industry is crippled currently with dealers having no space to store used cars and most not taking trade-ins. More details are needed on the transformation that will result from the implementation of the legislation and motor dealers must be taken into account because many people are employed in the industry.

Senator Norris referred to the taxi industry. There are more taxis in Dublin than in New York. Illegal taxi operators, taxi cloning where people use two or three plates with the same number, the manufacture of plates and the PSV licence test are all issues. Any amount of fraud is taking place and the system for testing has not been changed in the past ten years, but the Joint Committee on Transport is examining this issue. We also have a problem with women being raped in taxis and so on. I believe, as do many others, that the Taxi Regulator has lost control of the issue. She claims she does not have sufficient resources but her office took in €42 million in the past few years. The only way out is to put a moratorium on the issue of taxi plates until she gets a handle on these issues.

Senator O'Toole raised the issue of the Iarnród Éireann freight service, which I have been raising for years. This facility is under utilised and it would take many heavy vehicles off the road. For example, the rail line between Dublin and Navan has been closed for years. It would not cost much to reopen it. Several surveys have been conducted on the line and everything is in situ but I cannot understand why it has not been reopened. Our inland waterways are also under utilised and this issue should be examined because their use would also alleviate traffic congestion in Dublin and other cities where water taxis could be used to take people form the ferry ports to train stations. Senator O’Toole is correct about the under utilisation of the resources Irish Rail has at its disposal. Services cease at 11 p.m. every night and everything lies idle.

I refer to the new motor taxation regime and the funding of local authorities. I do not fully agree with it because local authorities have other ways of raising funds and the car user should not be penalised for everything. Motorists are under the impression the Government does not want them to have cars. I fully support the concept of people changing over from private cars to public transport but if they pay a substantial amount for a car, they should have the liberty to use it if they wish. Parking charges were increased a few weeks ago and people were told to leave their cars at home and take public transport. That is not always convenient. It is not easy to shop and use public transport. For example, I waited for a bus in Saggart, County Dublin, on one occasion for three quarters of an hour. It is not as easy as some people think. We must get public transport operating efficiently before measures such as this are implemented, which affect the public.

While I welcome the Minister of State, Deputy Michael Kitt, I am disappointed the Minister is not present to respond to the issues Senators raise. Although I do not welcome the Bill in its entirety, I am pleased to contribute to the debate on it.

It is disingenuous of the Minister of State to argue that motor taxation has increased at a slower rate than inflation over the past eight years. Those who tax their cars do so for the subsequent 12 months rather than the previous eight years. It is disappointing, therefore, that the motor taxation increased this year at a significantly higher rate than inflation, which is relatively low.

Like Senator Brady, I do not propose to dwell on issues raised by previous speakers. Road signage is appalling throughout the country.

I concur with comments made by previous speakers on rail freight. One of Europe's largest Coca Cola manufacturing plants is located in County Mayo which has one of the worst rail freight services in the world. It is difficult to get Iarnród Éireann to take action on the issue of freight. I expected the Minister for the Environment, Heritage and Local Government, Deputy Gormley, to take action on this issue but he has not done so. Rail freight users regard the tracking of freight as an important issue as they want to know how their products will get to Dublin, Waterford or the ports. Action must be taken in this area.

I have a number of difficulties with the operation of the national car test, NCT. Some car owners, through no fault of their own, allow their NCT certificate to lapse. If they do not obtain a statement from the Garda that the car has been off the road for the period since the NCT certificate lapsed, the new certificate will be backdated. The result is that the new NCT may be valid for less than 12 months. NCT certificates should be valid for two years from the date on which the test takes place and should not be backdated for six or 12 months. The current practice puts money in the pockets of the NCT operators.

In some cases, motor traders who put cars parked in their garages through the national car test can only get a certificate for six or 12 months. If a car is off the road or has been bought from a customer, the national car test should stand for two years. It is ridiculous that this is not the case. The current practice would not be allowed in any other country.

The NCT operators appear to have the Government by the short and curlies because cars being imported from Britain must immediately undergo the national car test, despite having the British national car test. I ask the Minister of State to address the issues I have raised.

Maintenance workers, carpenters, bricklayers, builders and unemployed people who own small goods vehicles must pay a higher toll on motorways than the owners of some private cars. In some cases, these vehicles are smaller than cars. This practice must be reviewed as it is not helping business.

The requirement that small goods vehicles go through the NCT every 12 months imposes a major cost on the business community. It is an anti-business measure which imposes costs on transport. What action does the Government propose to take on this issue? I hope the Minister will address the anomalies surrounding the national car test.

The Minister of State referred to an additional sum of €80 million to be provided for specific local government purposes, including the operation of water services and the administration of group water schemes and the vehicle administration unit. Will this funding be distributed to some or all local authorities? On what will it be spent?

The largest tax facing businesses in County Mayo and elsewhere is water and sewerage charges. The sole reason a Fianna Fáil-led Government transferred the power to impose such charges from local authority members to county managers was to ensure such charges increased. The Minister proposes to give additional powers to local authority members when a power which was transferred from local authority members to county managers is being used and abused.

The largest tax on small businesses used to be rates but it has been replaced by water and sewerage charges. The county manager of Mayo County Council is seeking a 6% increase in water and wastewater charges. The current charge, which was zero several years ago, is massive, with some restaurants and bars paying up to €20,000 per annum. The charges are far in excess of local authority rates. It may look good not to increase rates but county managers are seeking unsustainable increases in water and wastewater charges. The Minister must review this matter. I ask the Minister of State to explain on what the €80 million will be spent, specifically in County Mayo.

I share Senator Burke's view on local charges and concur with his comments on the need to have national car test certificates stand for two years from the date on which the test takes place.

On the ongoing anomalies surrounding the removal of the M50 toll plaza, virtually every Member of the Oireachtas will have received representations from people who claim to have been charged in error for using the M50. I have been contacted by people who maintain they were not even in Dublin when they supposedly passed through the M50 camera system. The new system is experiencing many teething problems, including with its payment mechanisms. I ask the Minister of State to comment.

Most speakers referred to the rail network. I sometimes travel to Dublin from either Waterford or Thomastown rail station. Unfortunately, it takes as long to travel to Dublin from Kilkenny and Waterford by rail as by car, which means there is little incentive to travel by rail. If the service was improved, I and others would use rail more often. Senator Coffey is correct that people must regularly stand for the entire journey between Dublin and Waterford, which is not acceptable in this day and age. I have received a number of representations on this issue.

Previous speakers referred to rail freight. We have seen a shocking decline in rail freight and Iarnród Éireann seems determined to get rid of it completely at a time when we should be encouraging more businesses to transport their goods by rail and remove such traffic from our road network.

The ban on heavy goods vehicles in Dublin city centre has worked quite well and we should encourage more transport of heavy goods by rail. I, like others, thought that when the Green Party entered Government that might be a priority but, like a number of issues, it has disappeared from the agenda.

I concur with Senator O'Toole's comment on the 10% target for electric cars. Senator Boyle said Opposition parties made the case for the tax being on fuel. Senator Norris, not Opposition parties, made the case.

Senator Boyle made an interesting contribution on the funding of local government. My problem with the motor taxation system as it currently exists is that it is the major mechanism by which central government funds local government through the local government fund. In the recent budget that funding was cut by 8% or 9% and this will have a serious knock-on effect on the services provided by local government.

Senator Boyle also made the point, and it is the first time I have heard it articulated so perhaps the Minister of State will be able to explain it further because while it is not directly related to motor taxation, I would like to know the Government's policy on it, that the tax on second properties announced in the budget would be used as a mechanism in the future to fund local government. He said that loudly and clearly and that he wanted it to be underpinned by rateable valuation. In other words, he wanted a reintroduction of rates, on this occasion on second homes, and this would be used to fund local government in the future.

Is that the Government's position or was he just flying a kite? It is not something I have heard spoken about in this House or the other House by any Government representative until this point. Perhaps the Minister of State is in a position to respond. Rates were suspended but not abolished in 1977, and perhaps this is a reintroduction of rates to fund local government.

I wish to make a number of other points. Senator Coffey was correct when he spoke about the manner in which this scheme is being introduced, in the absence of significant improvements in our public transport infrastructure. We have seen significant investment in roads, which is to be welcomed. Inter-urban routes have been significantly improved. The worst national primary route in Ireland, the N9 between Waterford and Kilkenny, is in my own area. I welcome the fact that the new motorway will be opened some time next year. It should have happened a long time ago.

The return the taxpayer sees for their motor taxation in local road improvements is not commensurate with the increases seen in taxation over recent years. I am thinking in particular of non-national roads. One example in my own area is the regional road between New Ross and Kilkenny, which passes through Thomastown where I have my constituency office. It is one of the worst traffic blackspots in the country and has not been bypassed. The provision of the new motorway between Waterford and Dublin will alleviate some of the traffic difficulties in Thomastown, but there is a significant problem with the regional road because it links from Rosslare across the country. Many heavy goods vehicles and tourist traffic use that road.

There are now serious questions on the funding of the bypass and relief road for Thomastown which has been on the agenda since before I was born. A number of years ago we were promised it would happen. We saw a detailed drawing on a map but I do not know if it will happen. I hope there is enough money left in the kitty to ensure it does happen. It is a necessary significant improvement needed in the future.

I have covered all the issues I wish to raise. The problem with this Bill is that it emphasises again the Government's reliance on motor taxation as a method of funding local government. Alternatives were mentioned by previous speakers, but we need a broader discussion in the future on the funding of the local authority network throughout the country. I do not think this change in motor taxation is a step in the right direction.

It is important to put a number of things in context. Local governments are in crisis regarding funding. Small, medium and large car dealerships are in crisis. I visited three car dealerships in Cork city last Monday. There was no one in them, no one was buying or trading and the dealerships were looking for customers to purchase cars.

Minister for the Environment, Heritage and Local Government, Deputy John Gormley, and his Government colleagues did untold damage to the car industry in their budgets. I appeal to the Minister of State to negotiate with his colleagues in Government and come up with a stimulus package or scrappage scheme to help the car industry and the hard-pressed consumer. Senator Glynn, I believe, and others mentioned trading in second-hand cars. We need a rescue package for the car industry in Ireland. We hear the Government is becoming concerned about CO2 emissions and the reduction of our carbon footprint, but a balance must be struck.

We have a Minister for the Environment, Heritage and Local Government who is giving with one hand and taking with the other. The Minister of State has spent a long time in politics. The reality is that under this Government there has been a reduction in funding to local government. That is a hard fact. This week Cork City Council passed its budget, as did Cork County Council and other councils. They are struggling to balance budgets, maintain services and continue to provide employment at a time when Government has let them down.

We then have this great green mantra about public transport. Every one of us is in favour of public transport which is effective, modern, environmentally clean and provides a service to people. One of the greatest mistakes made in Cork city was getting rid of the tram service. We had the first and second Lutz development plans and the Cork area strategic plan. We have had exponential growth in metropolitan Cork.

Let us paint a picture of a family of a mother, a father and three children getting up at 7 o'clock on a school morning to get out the door at 8 o'clock, get ahead of the traffic and go one mile to reach school for 9 o'clock. We have invested millions in bus lanes which are going nowhere in Cork city. They are white elephants. Gardaí patrol them at 9 o'clock in the morning, pulling people in, and awarding penalty points, and yet there is more congestion. Despite this, the Government increased the fee for public transport in schools, as Deputy Frank Feighan, Fine Gael spokesperson on school transport has consistently pointed out. The fee for two children going to school has risen from €198 to €600, as Deputy Feighan pointed out in a debate in the other House. Where is the incentive to use public transport? Where is the incentive in Cork city to get children to take the bicycle or to walk to school? There is no vision. There is a green mantra about all this, but there is nothing happening.

All across Cork, in Grange, Rochestown, Bishopstown, Togher, Glasheen and Carrigaline, I see endless queues of traffic when there would be no need for it if we had a proper transportation system. I call on the Minister of State and his colleagues to set in place a system of light rail for Cork city and metropolitan Cork. Traffic gridlock can be freed up and sustainable communities can be created in the heart of Cork. We can free up communities and have free movement, as opposed to gridlock. That has not happened.

I welcome the new addition to the Cork to Dublin motorway. Why is it that the NRA, a body that is unaccountable to this House and the other House, can plan a road with no rest area or motorway service stop? I can now drive from Cashel to Abbeyleix with no service stop and from Cork to Mitchelstown and from Kilbeheny onwards with no service stop. That is unacceptable. We need light rail for Cork and we need the NRA to become an accountable body so that we can ask about the lack of a flyover at the Sarsfield Road roundabout and at the Bandon Road roundabout in Cork city, or about the lack of rest areas on the motorway.

I want to speak about a subject that is close to my heart and something about which I spoke in this House on a number of occasions. I am referring to rail transport, especially freight services to our ports. I worked in Waterford Port for many years and on any weekend, ten or 12 trains would come in, while two or three trains per day were coming into the port every day during the week. For whatever reason, Iarnród Éireann forgot about rail freight and had no interest in it. The company let the business fade away. It was uncompetitive, even though it had the best infrastructure possible in Waterford Port. It is improving a little bit, but Iarnród Éireann was so uncompetitive that the companies operating in the port got quotes from hauliers which were much cheaper. This probably suited Iarnród Éireann because it could get out of the rail freight business and let people go.

I would have thought that the first priority of a Green Party Minister would be to transfer the amount of road freight onto the railways. The Green Party should have been completely in favour of any subsidy necessary to do that. I thought it would have been pushing this agenda at this stage. It is still not too late. There should be rail links to ports in places like Dublin and Limerick, and it would not take a major amount of money to provide that infrastructure. The will has to be there from the Minister, the Department and Iarnród Éireann, but it does not seem to be there. We need a change of emphasis in this respect. How many times have we seen accidents involving juggernauts going through our cities and towns? How much damage are these trucks doing to our roads? There is a more sensible way of doing things that is much healthier for the environment.

I hope that the Minister for the Environment, Heritage and Local Government will put some thought into this policy, which is a green policy. Obviously, his intentions do not seem to match the action that we have seen to date.

I thank all the Senators who contributed to the debate. The purpose of the Bill is to seek a modest increase in motor tax as a contribution to ensuring that local authorities have the resources to provide good quality local services to the public across a range of areas. The general purposes grants, financed from the local government fund, are an important source of local authority funding and they represent about one fifth of the total current income. They are discretionary and may be used by authorities to fund whatever day-to-day operations they consider necessary.

The major changes introduced to the motor taxation system in 2008 will make a real contribution to reducing emissions in Ireland. The Minister intends to keep the system under active review to ensure that it meets its twin objectives of securing more sustainable motoring, while ensuring that motor tax continues to contribute sufficient resources to local government funding. This is just one of a broad range of measures that will be required if Ireland is to meet its EU and international climate change obligations.

The Minister was here for most of the debate and he agreed with the points made by Senator Coffey about the need to invest in public transport and in all modes of sustainable travel. The Government is investing record sums in public transport and further policies will be outlined in a new sustainable travel and transport strategy, which the Minister of Transport is preparing. We have a huge challenge to meet if we are to reduce our emissions. As the recent SEI figures have shown, there have been major energy efficiency gains in recent years. It is clear that transport is a difficult area that requires concerted effort.

The Minister pointed out that the Government has introduced new incentives on electric cars. There has been a significant objective to put 250,000 electric cars on Irish roads over the next decade. There is no VRT on electric vehicles and there is a low motor tax charge that has not increased in the past two years.

There is merit in taxing fuel. The Government raised petrol tax by 8 cent per litre in the recent budget. The Government is continuing to look at carbon taxes and will keep these issues under review. Not everybody lives in Dublin and the costs on people who are car dependent and who do not have access to public transport must be considered. Senator Norris raised the issue of cars for the disabled and the Minister has taken that up. The Minister was also impressed by the points made by Senator O'Toole on electric vehicles. The Minister for Transport and the Minister for Communications, Energy and Natural Resources have resolved to roll out the electric charging infrastructure to which the Senator referred. I will pass on his comments to my colleagues.

Senator Hannigan suggested that the new system of taxation will present challenges in respect of protecting income from the local government fund. These changes are being made on the basis of revenue neutrality. They will continue to be kept under review. The recommendations of the Commission on Taxation, which was mentioned by Senator Boyle, will also be important.

A number of Senators raised issues which come under the remit of the Department of Transport, including rail freight, road construction, the national car test and toll roads. I will pass the Senators' remarks on these matters to the Minister for Transport. I regret that I was not in attendance for Senator Glynn's comments on some of these issues.

Senator John Paul Phelan raised the possibility of introducing a form of taxation to support local government. The levy on second properties, which was announced by the Minister for Finance on budget day, will be set at €200 per property. The more general issue of local government funding, to which Senator Boyle referred, is being considered by the Commission on Taxation, in accordance with its remit to examine all issues of taxation.

Senator Buttimer bemoaned the loss of the Cork city tram service. The loss of a rail service, which has been experienced in many parts of the country, is always regrettable. I will pass to the Minister for Transport his comments on the possibility of developing a new light rail service in Cork city. The Senator made a good point about rest areas on motorways. As someone who uses the road between Dublin and Galway quite frequently, I am aware that the section between Dublin and Athlone is now quite good. I hope the motorway will be extended as far as Ballinasloe next year. I accept that there is a need for rest areas on such long stretches of motorway.

Senator Cummins spoke about rail freight. I am conscious that good work is being done to facilitate the transportation of freight by rail, particularly along the western rail corridor which was closed in 1975 but is now being redeveloped, with the section between Ennis and Athenry set to open next year. I hope more progress will be made with the transportation of freight and passengers along such railway lines.

I consider the proposed increase in motor tax rates for 2009 to be reasonable in this challenging economic period. I am grateful to all Senators who contributed to the debate on this Bill.

Question, "That the Bill be now read a Second Time", put and declared carried.

When is it proposed to take Committee Stage?


Agreed to take remaining Stages today.