I welcome the Minister of State at the Department of Public Expenditure and Reform, Deputy Brian Hayes, to the House.
Adjournment Matters
HSE Properties
My Adjournment matter concerns property owned by the HSE, formerly owned by the Southern Health Board, which has been vacant for over 20 years. It is in the middle of a residential area. It is an eyesore and as I understand it, the HSE has no immediate proposals for it, unless something has changed in the past two or three months. I was at a meeting of residents in the area on Tuesday night. They are very concerned. A property not far from this one, the Good Shepherd convent, was set on fire. It is owned by a company that has gone into liquidation. There are people staying in it too and it is a danger to everyone. The HSE property is likewise a danger to anyone who enters it. Unless the HSE has a plan to use this property immediately it is time to decide what can be done with it, whether to put it on the market or let some other State agency or Department take it over and put it to some use for the benefit of the population.
I thank the Senator for raising this matter which is important for him and people in Cork city and concerns Our Lady and St Kevin's Hospital, Shanakiel. The Senator has also asked us to clarify the extent of the campus remaining in HSE ownership. Our Lady's Hospital was a mental health institution built in the 1840s. Its construction and size meant that it was not fit for purpose by current standards and was not suitable for the delivery of health care. The complex comprised a number of major buildings, Our Lady's, also known as the Grey building, and St. Bridget's closed in the early 1990s. Our Lady's, St Bridget's and several smaller buildings were subsequently sold by the former Southern Health Board. St. Kevin's, St. Ann's, St. Dympna's and St. John's closed between 2001 and 2009. These buildings and a number of smaller buildings remain in HSE ownership.
St. Ann's was replaced by a high security mental health facility now known as Carrigmore. This facility is stand alone and separated from the remainder of the campus by a pitch and putt course and public roads. The HSE seeks value for money in deciding whether to sell or redevelop properties and this is often a complex and difficult balancing act.
This is often a complex and difficult balancing act.
Property management is governed by the HSE property protocol, which sets out the procedures to be followed when property is bought or sold. The HSE property committee must approve property acquisitions and disposals and will reject any proposal that does not meet the requirements and does not achieve value for money.
Although the property market has been particularly difficult since 2008 and prices can be extremely location-, situation- and condition-dependent, the HSE is managing to sell its properties. This represents a considerable achievement given the current property market and the type of property the HSE has to sell. However, the topography of the Shanakiel campus and the presence of rights of way make its disposal difficult and a particularly complex undertaking.
The HSE is preparing to sell properties that achieve market value. Properties have been withdrawn where below-market-value bids were received. Detailed disposal schedules have been prepared by each region and will be subject to regular review. In addition, market strategies will be reviewed in light of the internal interests and prices being achieved. In order to achieve the best price as quickly as possible, the HSE has reviewed its sale strategy and its initial procedures for approving properties for sale and completing transactions, which should shorten the administrative timeframe. Changes made include: appointing local auctioneers to develop sales strategies specific to each locality; dividing the large sites into lots and focusing initially on the lots in which interest is being expressed; focusing on the sale of agricultural land where possible; and focusing on smaller sites, including vacant and under-used facilities.
The HSE continues to monitor the market for opportunities to dispose of properties which are surplus to its requirements. It also continuously reviews vacant property with a view to refurbishing, rebuilding or redeveloping properties, such as the remaining Shanakiel campus. I happy to keep the Seanad and the Senator informed of any progress on this matter.
It appears from this reply that there is no plan by the HSE to use the site itself. I am concerned that it has been vacant for more than 20 years, which the Minister of State confirmed. Much time has been lost. Will the residents of the area have to sit this out for another 20 years, particularly if the HSE has no immediate proposal to put the site to any useful purpose itself?
That is a very relevant question, which the HSE must clarify. It would seem from the reply that no decision has been taken in respect of the totality of the property or parcels of the property. I note that as opportunities arise they will be looked at, but it would seem there are no plans currently. The HSE should engage with the local community and the Senator. The Senator's comments in this Adjournment debate should be sent to the HSE with a view to a fuller meeting between himself and the HSE to clarify its plans.
Carbon Tax Implementation
Cuirim fáilte roimh an Aire go dtí an Seanad. This matter is local to County Louth. Standard Brands of Kilsaran, Castlebellingham, County Louth, has been manufacturing firelighters since the early 1970s and employs approximately 100 people. It also manufactures firelogs - logs which were previously imported from Holland and Germany. Imported products contain hardwood dust, waste wood dust and various other elements, while petroleum coke dust and natural waxes are contained in the firelog manufactured by Standard Brands. I understand imported products will not be liable for carbon tax, which will lead to retailers' switching to the imported product, with the possibility of job losses at Kilsaran, Castlebellingham.
The Revenue Commissioners are calling instant firelogs a solid fuel. However, the National Standards Authority of Ireland told Standard Brands verbally that it does not class firelogs as a solid fuel but as a source of ignition akin to a firelighter, to which carbon tax will not apply. There is no doubt the retailer will chose the cheaper product to put on the shelf. Introducing a carbon tax on instant firelogs made in Ireland will make them uncompetitive compared to European imports, which will result in a reduction in the workforce at Standard Brands. I am not sure what the logs are made of, but they are used one at a time. The wrapper is lit and then solid fuel, such as coal or timber, is added to the fire. They are not used like a shovel of coal or a number of briquettes but are used one at a time. I implore the Minister to reconsider the issue of carbon taxes on firelogs made at Standard Brands.
I welcome the Minister of State. Like Senator Brennan, I am concerned about the imposition of this carbon tax on solid fuel from the point of view of potential job losses. I have been approached by suppliers of coal who have told me that what will happen, as happens in hard times, is that people will source their coal somewhere else - most likely from Northern Ireland, where the VAT rate on coal is only 5%, as distinct from 13.5% in the South. Unfortunately, the sulphur content of the coal in the North is 2%, whereas in the South it is 0.7%; therefore, we will lose jobs, lose money to Northern Ireland and damage our environment even more with the use of this coal.
The Minister must accept that this has been one of the coldest winters in living memory and evidence of that is the current fodder crisis. If this carbon tax had been introduced this winter, I would have paid more in carbon tax than in property tax. We must also be conscious of the fact that we spend €211 million on the free fuel allowance every year. Will we lose that revenue North of the Border because coal will be cheaper there? We got a rebate on diesel costs, for which I campaigned for a long time, and we saw how effective that was. The economy was losing millions of euro because hauliers were going to Europe with one quarter of a tank of diesel to fill up there. We had to address that by introducing a diesel rebate. We need to look at how we are dealing with this carbon tax in the same way, as jobs will be lost. Sometimes we make decisions that backfire, and it would be extremely wise to revisit this one because otherwise we will learn the hard way.
I thank the Senators for giving me an opportunity to address this issue and thank them for their concern. The carbon tax on fossil fuels was introduced in budget 2010. It was applied to petrol and auto diesel from December 2009 and extended to kerosene, marked gas oil, liquid petroleum gas and natural gas with effect from May 2010.
The carbon tax on fossil fuels was introduced in budget 2010 and applied to petrol and auto diesel from December 2009 and extended to kerosene, marked gas oil, liquid petroleum gas and natural gas with effect from May 2010. At the time, the application of carbon tax to solid fuels was made subject to a commencement order. This approach in respect of solid fuels was primarily adopted in order to allow time for a robust mechanism to be put in place to address the risk of coal products with lower environmental standards being sourced from outside the State. The Department of the Environment, Community and Local Government undertook to provide such a robust mechanism in conjunction with the National Standards Authority of Ireland, NSAI. As part of that exercise, the Department engaged in a consultation process involving officials from the Department of Finance, the Revenue Commissioners, the industry representative Solid Fuel Trade Group, SFTG, the Environmental Protection Agency and representatives of selected local authorities.
The Minister for the Environment, Community and Local Government introduced a new specification for the sulphur content of bituminous coal placed on the market for residential use in Ireland with effect from 7 June 2011. This created the circumstances to facilitate the application of carbon tax to coal and peat. However, in budget 2012, given other tax increases, particularly with regard to VAT which increased from 21% to 23%, the Minister decided not to commence the order for the carbon tax on solid fuels. In budget 2013 the carbon tax was extended to solid fuels but conscious of the greater reliance of low-income households on solid fuels, the Minister postponed the application of the tax until after the winter period and decided to introduce it in two phases, that is, €10 per tonne of CO2 from 1 May 2013 and a further €10 per tonne of CO2 from 1 May 2014. This will mean an increase in price of those fuels of approximately €1.20, or 8.2%, per 40 kg bag in the case of coal and 26 cents, or 6.7%, in the case of a bale of briquettes this year. The relatively high percentage increase in the price of these products is due in part to those products having little or no excise applied to them prior to the carbon tax.
The introduction of carbon tax was about sending a price signal that there is a cost associated with the consumption of fossil fuels to the detriment of the environment. In practical terms, the tax is applied according to the carbon content of those fossil fuels. The greater the amount of CO2 emitted, the higher the tax. It should be noted that solid fuels have the highest carbon content of all fossil fuels. As a result they are considered the dirtiest fuels and, given the environmental impact, it is important that they are taxed. While tax increases are unpopular, where a country's financial position is under pressure it makes sense to increase taxes in areas where some benefits can arise. In this case, a carbon tax promotes energy efficiency, reduces emissions and reduces our dependence on imported fossil fuels. Given that the extension of the carbon tax to solid fuels was part of the overall revenue raising measures in budget 2013, the Minister is not in a position to review this decision.
Why are firelogs described as a solid fuel? The legislation states that coal is defined as "coal and lignite, solid fuel manufactured from coal and lignite" and any other energy product within the meaning of Article 2.1 of the directive in solid form. Standard Brands log is solid and comprises material included in the energy product list, but it is not a fuel similar to coal and briquettes. It is not a fuel. One match lights it and it contributes to the fire. One uses one per day. In fact, the wrapper states not to use any more than one. I have the pack instructions with me.
Consumer research also shows that more than 80% of individuals in Ireland who buy firelogs use them as a large firelighter. There is no carbon tax applied to firelighters. Perhaps the word "log" will cause additional carbon tax for this manufacturer, Standard Brands. It will also increase the VAT and make its product uncompetitive with imported substitutes. I am also fearful for the 100 people working locally. If one loses nine or ten of them, one loses 10% of one's workforce. This must be considered. It is a glorified firelighter and that should be considered.
The Minister of State said in his response that there was a cost associated with the consumption of fossil fuels to the detriment of the environment. I have already covered that issue. If people are travelling to the North to buy coal containing 1.3% extra sulphur, it will surely be to the detriment of the environment and we will also lose revenue. There is no alternative for people who are hard pressed.
The Minister of State said the Minister is not in a position to review it. I hope the Minister will convey Senator Brennan's and my concerns to him. They were not addressed in the reply. Perhaps it is our own fault for not making it clearer in the question.
We should have been more specific. That is our fault, not the fault of the Minister of State.
The issue here is that we might lose jobs. We must keep this under review. If we are going to lose jobs in this sector, it is not worth the revenue that will be raised. I hope the Minister of State will convey those concerns to the Minister.
I will speak to the Minister, Deputy Noonan, and raise the substantive issue the Senators have raised with him. There is a general issue with these Adjournment matters. If Members are not specific about the point, they will receive a general reply.
We appreciate that.
I know from my years of experience in the House that the clearer the Member is in the matter tabled, the easier it is for the officials in the Department to know what they are seeking. That is the first point.
One would have to write an essay to be specific on occasions.
The Senator can give me a shout. I might be a help in that regard.
With regard to the firelog, which Senator Brennan describes as a glorified firelighter, I do not wish to shunt responsibility to the Department of the Environment, Community and Local Government but my understanding is that the specification of what is and is not fossil fuel and what is and is not a by-product came from that Department following an extensive consultation with industry representatives. As to why the firelog is included for the purposes of the carbon tax, the Senator makes a fair point. However, from our perspective on the finances side, we simply implemented that which came from the Department of the Environment, Community and Local Government. Without shedding responsibility, in fairness it is probably a more specific issue for that Department.
On the second issue raised by the Senator, I appreciate his point. The Minister, Deputy Noonan, made it clear in his Budget Statement that there is a phased introduction of this carbon tax over a period of two years. The reason for doing this is that those fossil fuels have the most carbon content and if one is trying to change patterns of behaviour it is a long-standing practice that taxation instruments provided for in every Finance Bill can be used for that purpose. In any event, we will have to look at all of the evidence that will flow from this. The Senators have raised this in May and it was only applied from yesterday, so it is a timely issue. Of course, we will continue to examine the implementation of this. That there will be truck loads of people heading to the North to bring coal back across the Border is something we would have to consider should it happen.
The tax is in place from 1 May and there will be another increase on 1 May next year. We will keep a close eye on this from the financial perspective. Projections have been made for this tax from our national financial perspective in terms of the profiling of the amounts to be obtained from this. It is an issue of direct relevance because if we say we will obtain money from a tax, it is important that we obtain it. Obviously, therefore, this matter will be kept under constant review. However, I will convey the issues the Senators raised to the Minister.
Departmental Staff Redeployment
Cuirim fáilte roimh an Aire. This matter has arisen from concerns in a small town of 800 to 900 people, with 70 permanent and full-time Government jobs which I hope will be there forever and a day. However, given the shifting sands of macro-economics, there is some gossip and there are indications of changes, redeployment, etc. I would be grateful for a reply from the Minister of State.
I thank the Senator for raising this matter. Following the successful reorganisation of the Department's local office structure, which resulted in the reduction from 58 to 16 of the local offices, and in the context of the Croke Park agreement which committed the public sector, including the Department of Agriculture, Food and the Marine, to maximise efficiencies and productivity in the use of resources through revised work practices, the Department conducted a review of work carried out in the remaining local offices. The objective of the review was to identify any non-essential activities, to identify which, if any, of the essential functions should be organised differently and to make recommendations which would inform the Department's longer term vision and strategy for delivery of such services in the light of reducing public service numbers.
The review made several recommendations aimed at improving business processes both within the local offices and in regard to the manner in which it implements various schemes, in particular the disease eradication schemes, with a view to reducing the administrative burden on farmers and the cost to the Department of administering these schemes. The recommendations included, for example, that passports should no longer be taken up from restricted herds and that the practice of issuing movement permits for clear cattle in reactor herds should be discontinued.
The report of the review group fits in both with the Department's objectives in driving efficiency and savings and with the broad public service reform agenda. Centralising administrative procedures will enable the Department to reduce the number of administrative staff it requires to support veterinary office operations and, accordingly, the cost of providing its services. This is in line with Government policy. In addition, the centralisation of administrative functions will facilitate the redeployment of staff from the local offices to other State agencies and thereby enable the Government to provide services through these agencies more efficiently.
I should emphasise that the centralisation of administrative functions will not negatively impact on local access and services for local customers. The Department vets, inspectors and technical officers will remain in place at these offices to service our clients across all of the schemes which are provided from regional offices. In view of this, front-line services will be maintained and public access for all of the Department's stakeholders will continue to be available at the 16 regional offices.
In line with the Minister's decision to centralise administrative services, administrative functions have been already transferred out of a number of regional offices, notably, Ennis, Clonakilty, Limerick and Tipperary, without any negative implications for the provision of services to farmer clients. The transfer of the administrative functions out of other regional offices, such as Drumshanbo, to which the Senator refers, will be considered in light of the availability of opportunities to redeploy the staff concerned to support other critical public services. In this context, the Department has been in contact with a number of State agencies, including the Department of Social Protection, in regard to the establishment of redeployment opportunities generally with a view to progressing the centralisation process.
The Department fully understands the concerns expressed by the local staff in Drumshanbo in regard to redeployment but I would like to stress that the intention is that the administrative work will be transferred out of the that office only if it can be replaced by work from some other State agency.
I am very grateful to the Minister of State for the reply. Trying to get to the core of what these replies are about is a little like going through a jungle with a machete. There must be context to these replies but the core of this reply is that the concerns expressed are understood by the Department. It seemed to suggest there are ongoing discussions between the Department, the Department of Social Protection and a number of State agencies, which is rather interesting. It would be interesting to explore that on another day and exactly where they are leading.
I am particularly reassured that the administrative work will be transferred only if it can be replaced by work from other agencies, which would seem to suggest the current level of the workforce in the Drumshanbo office will be maintained, albeit perhaps in a different context. That seems to be the gist of what the reply was about.
I will not comment on the Department of Agriculture, Food and the Marine side but, wearing my public sector reform hat, I would say what the Senator said is right. We are trying to reconfigure the entire system to get greater efficiencies. In a circumstance where we have taken 30,000 people out of the public sector and more are to go, we must do this but the way we do it is the key. It is not that towns will be denuded of public services but they might see a transformation in the public office.
The two largest clients the OPW has are Revenue and the Department of Social Protection. There is a huge demand on their services given the scale of the problems in the economy. It is like a gigantic chess game. To take one service out, one must put in another service, assuming one can create those efficiencies. There are examples of where we have rationalised offices. We find that we can provide a number of services in one office, although I cannot comment on whether this will be the case in Drumshanbo. As the Minister said, there is some hope for the people there that public service authorities will continue to require public service workers to do essential work there, although where it is in the Department of Agriculture, Food and the Marine is another matter.
We continue to work with a range of Departments to get the best possible deal for the public service generally and Drumshanbo. I recognise that there are a number of staff there and that people live, work and spend money locally. It is important we do everything we can to ensure towns like Drumshanbo remain on their feet by having these offices in place.
I thank the Minister of State.
The Seanad adjourned at 2 p.m. until 2.30 p.m. on Tuesday, 7 May 2013.