Dáil Éireann Debate, Thursday - 16 January 2014
7. Deputy Richard Boyd Barrett asked the Minister for Finance the amount raised from the local property tax for 2013; the amount paid into the local government fund; the amount allocated to Irish Water; if he will provide some estimates for 2014 and the oversight mechanisms that have been put in place to ensure prudent use of these funds; and if he will make a statement on the matter. [1653/14]
View answerThe local property tax is the Minister's tax. When it was first introduced in order to neutralise opposition to it, he said all the money was going to local services. Last autumn, we discovered that all the money was going to Irish Water. In recent weeks we have discovered that a huge amount of that money is going to line the pockets of consultants. Can the Minister get his story any straighter than the Minister for the Environment, Community and Local Government, Deputy Hogan, in terms of what he knew about local property tax income going to consultants in Irish Water. Did the Minister for Finance know about this expenditure and, if so, when did he know about it? Did he scrutinise it? Has he assessed whether we were getting value for money for this huge amount of money that has gone into the pockets of Irish Water consultants.
The amount of local property tax received into the Exchequer in 2013 was €318 million. This represents an over-performance relative to the 2013 forecast outturn in budget 2014 which estimated that €300 million would be collected in 2013. This performance is encouraging, both in terms of compliance and revenues raised for the Exchequer, particularly given that this is a new tax.
Receipts from the local property tax received in 2013 will remain in the Exchequer and will be used to meet the many expenditure obligations faced by the State. The allocation to the Local Government Fund for 2013 had already been decided and local property tax receipts were not part of, and were not planned to be a part of, the Local Government Fund receipts and expenditure in 2013.
Section 157 of the Finance (Local Property Tax) Act 2012, as amended, provides that in each financial year commencing with 2014 the Minister shall pay from the Central Fund or the growing produce thereof into the Local Government Fund an amount equivalent to the local property tax, including any interest paid thereon, paid into the central fund during that year.
Budget 2014 forecast that €550 million would be collected in local property tax receipts in 2014. These receipts will be placed in the Local Government Fund which comes under the aegis of the Minister for the Environment, Community and Local Government. Under the Local Government Act 1998 which established the fund, the Minister manages, controls and authorises payments out of the fund. Accordingly, the allocations from the Local Government Fund are a matter for the Minister for the Environment, Community and Local Government.
However, I note that the revised Estimates volume for 2014 published by my colleague the Minister for Public Expenditure and Reform, Deputy Howlin, shows a €490 million subvention from the Local Government Fund to Irish Water. Furthermore, oversight mechanisms for expenditure from the Local Government Fund are also a matter for my colleague, the Minister for the Environment, Community and Local Government. As the Deputy will be aware, these issues have been discussed in great detail at a number of Oireachtas committees in recent days.
The money is collected by the Revenue Commissioners, who then transfer it to the Exchequer, which is under my control. Total receipts from the local property tax in 2014 will be transferred to the local government fund. The Minister for the Environment, Community and Local Government has the legal right to disperse that funding. His agreement with the Minister for Public Expenditure and Reform is that €490 million will be transferred from the local government fund to Irish Water.
What the Minister appears to be saying is that he, as Minister for Finance, has no role in scrutinising the spending of the €490 million that is being handed over via the Minister-----
That is correct. The Minister for Public Expenditure and Reform deals with expenditure budgets.
I find that pretty extraordinary because the money concerned is tax receipts. The Government in levying this unpopular, regressive austerity tax tried to neutralise opposition to it by saying that all the moneys collected would go back into local areas and services. We then discovered last autumn that not a single cent would go towards local services but would be used to meet the start-up costs of Irish Water. I find it amazing that given the change in regard to how and where this money will be spent the Minister for Finance did not discuss with the Minister for the Environment, Community and Local Government the amount that would be required in respect of the start-up of Irish Water. Does the Minister for Finance have no role in spending of that level of expenditure, which he has just informed us is €490 million, €80 million of which we recently discovered will be spent on lining the pockets of consultants? I still do not believe we have been given an explanation in terms of whether that spend was value for money. Enormous amounts of money has been spent on lining the pockets of consultants and it is difficult to see what precisely we are getting for it.
I know the Deputy would like to have a debate on Irish Water, which is the cause de jour.
I am entitled to raise the issue.
I have answered the Deputy's question. If he wants to have a debate on Irish Water he should submit a question on it to another Minister.
My question was what oversight mechanisms has the Minister for Finance put in place to ensure the prudent expenditure of the income from the local property tax in relation to Irish Water. That question was submitted prior to the breaking of the scandal in relation to Irish Water. It is a question which the Minister and his Government colleagues have failed to respond to for the past year and a half.
Again, I ask the Minister does he, as Minister for Finance, have any role in ensuring the prudent expenditure of income from the local property tax, which tax this Government forced down the throats of people and promised would fund local services and is now being spent on lining the pockets of consultants.
The Deputy is engaging in a very emotional mode of questioning. I have answered his question fully. I have, of course, a responsibility because the Revenue Commissioners report to me. The Revenue Commissioners collect the tax effectively and efficiently and report to me. In accordance with Government policy I then transfer that income from the Exchequer to the local government fund. What level of oversight and scrutiny then comes into play is vested in the Minister for the Environment, Community and Local Government. He has the legal authority to oversee the dispersal of that fund.
He does not micro-manage things.
He does it in consultation with the Minister for Public Expenditure and Reform. The Deputy will note from the 2014 Book of Estimates that €490 million will be transferred from the local government fund to Irish Water. The Deputy's question is whether that funding will be used locally. The agencies that provide water supply, domestically and commercially, are the local authorities. That function is being transferred to Irish Water. The transfer of €490 million for the provision of water through a new agency is spending the money locally, because that agency will be doing what is currently done by the local authorities.
Some €80 million of that amount is being spent on consultants.
