Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Tuesday, 4 Mar 1997

Vol. 475 No. 7

Private Members' Business. - Water Charges: Motion.

I move:

That Dáil Éireann condemns the Government for its total disregard

— for the welfare of rural communities, and,

— for the principle of equity for all our citizens

in their handling of the water charges issue, and calls on the Government to take immediate action to assuage the deep resentment felt throughout the country.

On 19 December the Minister for the Environment, Deputy Howlin, unveiled what he billed as a brave new departure in local government. This initiative came after a long process of study by a review group. The Minister assured us that what he was unveiling was the cumulation of a long process of deliberation and study.

On that day he announced that local government was to be financed through motor taxation. The Minister's announcement stated: "charges for domestic water supply and sewerage facilities are either flat charges or related to broad valuation bands but never to usage. Therefore, charges for domestic water supply and sewerage facilities will be abolished with effect from 1 January 1997". The Minister's claim that his plans were comprehensive and the product of study — reiterated in his amendment to the motion — is a nonsense. It is self-evident the plans were not comprehensive or the product of any great study or consultation and, further, were intrinsically anti-rural and inequitable.

I wish to deal with the Minister's claim that his proposals were the product of study. The Minister initiated a study on the subject of local government finances which was carried out by KPMG and published last year. It contained a list of 26 possible options for local government finance, not one of which referred to towing local government behind the family car. The creative process behind the Minister's proposal to hitch local government to motor tax was entirely his own. He ignored every single option outlined in the KPMG report. The political reality in relation to the study by the Minister and the reform of local government is that he has set up a plethora of groups to compile a conundrum of reports, each of which he has ignored.

The function of study, under this Minister, has been to delay. By announcing the setting up of report groups and their subsequent completion the Minister has cynically sought to confuse the contemplative with the active. Nothing happened until 19 December. The announcement on 19 December owed nothing to what had gone before. This particular paper trail was an end in itself. That announcement was a knee jerk reaction by the Minister to the increasingly acute electoral pressures on the Labour Party in Dublin. The result has been the creation of a serious inequity on householders in rural Ireland.

By throwing out the principle of equity the Minister has brought the political process into disrepute. He has deepened an existing sense of disillusionment with the political system and his unseemingly squirming in the interim has been as unedifying as it has been ineffective.

Faced with the political crisis of his own making, the Minister tried to square the circle on 21 January. He succeeded only in exacerbating the situation even more. He had already deeply angered rural dwellers by leaving them out completely. He twisted the knife by playing favourites among those who had been spurned. In announcing that local authorities would take over private group water schemes he presumed that was what these groups wanted but, often, it is not what they want. It completely overlooks the equally pressing case of those who, through their own initiative and frequently through their own money, had private wells or group water schemes on private sources. The announcement on 21 January, far from squaring the circle, inflamed the situation further.

We have come full circle in relation to the Minister's handling of local government reform. Careful reading of his amendment gives an indication of his modus operandi. The Minister's amendment after a gem-like reference to a new buoyant funding system ends with a commitment to “undertake a full examination of a range of issues arising in relation to group water supplies within the framework of a planned approach to the organisation and management of water supplies in rural areas and to report to the Government thereon”. The Minister is back to where he started, with a study. I have observed this Minister at close quarters for the past two and a half years and for two years——

At even closer quarters and quite happily at the time.

——at closer quarters. I have admired his apparently endless fluency. His political footwork from a distance is very impressive. Behind the show nothing is happening.

The Deputy was happy enough when he was close to the show.

We did not know the whole truth about what was going on at that time as revealed by the tribunal and the Blood Transfusion Service Board.

That is a genuinely scurrilous comment.

It is a direct statement.

Let us not go back into history. Let us deal with the matter before the House.

The Deputy knows nothing about it.

The Minister did not tell us a whole lot about it. He seemed to know less about it when Minister for Health.

The Deputy did not read the Government memorandum — that is another story.

The Minister's objective is to manage the message rather than address the issues. What the Minister was about on 19 December and later on 21 January was not addressing the serious issue of local authority funding but getting the message right for the Labour Party. Saving the political skins of the endangered eight was the prompting behind an opportunistic and disastrous attempt at a political stroke. In the process the Minister betrayed an instinctively anti-rural bias in the sympathies of his party. The leader of Democratic Left was happy to avail of the opportunity to launch another broadside against rural communities. Where was the Fine Gael Party when this was going on? Was it asleep at the Cabinet table in December when the Minister put his plan through? Was it asleep at the Cabinet table in January when the Minister arrived with another plan?

It is well known that rural Fine Gael Deputies had strongly warned its Ministers of the acute political danger posed by Minister Howlin's plans. When the issue boiled over there was a belated attempt by Fine Gael to define a separate identity for itself on this. Faced with a threat to Government unity the Taoiseach scuppered that quickly and a junior press officer was hung out to dry — I understand he was an assistant press officer up to that time — and Fine Gael's rural Deputies were told to cool it. It is apparent that Fine Gael is in power but not in office and that office is more important than equity for its constituents. Equity and fairness are at the core of this issue. I have set out the options that are open to the Minister to remove the inequity he has created by his announcements on 19 December and 21 January, as follows: direct subventions to householders; direct subventions to appropriate group water schemes; local authorities or the Department taking charge of schemes opting for that particular approach;——

It has already been done.

——the provision of a formal scheme between the Department, local authorities and group water schemes which will ensure that those groups that wish to remain independent can do so without suffering any penalties and inequities, and will be facilitated in their function of providing and maintaining a potable water supply to their communities.

The first and second options could be used in the short-term to remove the inequity created by the Minister. It seems, however, that the Minister will not take those options. He will delay this with a further report. Whatever political manoeuvring the Minister does to try to save face on this matter, the trustees of group water schemes cannot wait forever for him to make a decision on some form of subvention in the immediate future to allow a proper system to be worked out. I see that the Minister is shaking his head, but when these schemes start closing down——

If they were waiting for Fianna Fáil they would be waiting a long time.

They will be waiting until just after the election because we will take action at that stage. If the Minister does not take action these group water schemes will close down. As a Labour Party Deputy based in an urban constituency, perhaps the Minister will not suffer——

Does the Deputy know Wexford? Does he visit it often?

——but his colleagues in Fine Gael, whom he professes to like so much and wants to stay in Government with, will suffer severe repercussions if he does not take action immediately.

We have full confidence in them.

We will let that be on their heads. Options three and four that I outlined are, of necessity, long-term and would require full consultation with the group schemes concerned before any details of the scheme could be finalised. The Minister should initiate discussions with the federation of group water schemes as quickly as possible.

Water quality is accepted as a key issue on all sides. The recently published Environmental Protection Agency report highlighted the higher incidence of quality problems in smaller schemes. A holistic response to this issue must include training for operators and professional assistance where necessary. The way out of this morass is not to go further down the blind alley the Minister has stumbled into, nor is it to revert to form and attempt to manage the matter with yet another study and a report. The solution is to approach this issue from the viewpoint of equity and fairness. I am asking the Minister to do so.

I seek the permission of the House to share my time with Deputies O'Hanlon, Hughes and Killeen.

I am quite sure that is satisfactory and agreed.

The motion is in the names of our spokesperson on the environment, Deputy Dempsey, myself as chairman of the party, and the party's Chief Whip, Deputy Dermot Ahern. That indicates the seriousness with which our party views the decision of the Minister and the Government. An anti-rural bias was shown when 150,000 houses were excluded from the Minister's original decision to abolish water charges. Was this decision thought out? It is extraordinary that it was announced about a week after 88 local authorities had prepared their estimates for 1997. I would have thought that any Minister who was going to reform local government would first consult with local authorities. Instead of that, councillors debated their estimates and then found that one of their sources of funding was to be taken away and replaced by a different source, motor tax.

Was there agreement between the three parties in Government, Fine Gael, Labour and Democratic Left? The Minister of State, Deputy Higgins, is here. His colleague, Deputy Ring, made clear to us what some members of Fine Gael think about the matter. The Taoiseach stated in Galway that Fine Gael had no policy of its own, it was only a Government policy.

That is true.

That is all right, but does Labour reciprocate? I would be concerned if I were Deputy Higgins. I have a three page letter here from a Labour Member of the Oireachtas. I will read it as far as the second paragraph. The letter was circulated widely and was the subject of a full-scale debate at Monaghan County Council yesterday. The letter states:

I always place the concerns of rural people to the forefront of my political work. To that end I have succeeded in getting vast increases in funding for county roads, keeping rural post offices open and getting small schools refurbished, all of which was achieved with the help of Labour Party Ministers.

There is no word of Fine Gael there. No word of Labour not having a policy or that there is only a Government policy.

Sounds like Deputy Bhamjee.

More importantly, there was no question of priority need, merely an Oireachtas Member going along and getting all these things done. There was no question of whether they were needed or whether there was priority. I wonder what An Post thinks of a Labour Member of the Oireachtas keeping post offices open in rural Ireland? I wonder what the Minister for Education has to say? She came into the House and told us that her decisions were made on the basis of priority and not on the basis of representations from anyone on any side of the House, yet a Member of the Oireachtas tells us that these decisions are made on a totally different basis. I accept that not everyone in this House believes what is written in this letter, but it was the subject of a major debate at Monaghan County Council yesterday.

When the Minister for the Environment found himself in a hole he tried to correct the decision he made, but the way the Minister approached the decision was badly thought out. He dug himself into a bigger hole by deciding that water supplied by the local authority to group water schemes would be free of charge, but private group water schemes would still have to pay. He stated that he would provide £15 million in the current year. I tabled a parliamentary question but the Minister could not answer what that £15 million would be used for or how it would be divided between the local authorities.

I am not sure if the Minister is aware but some of his Fine Gael colleagues in Government should be, that £15 million would not go very far. There are two counties in my constituency and I am informed that £15 million would not cater for the needs of either one, let alone the whole constituency.

When the Deputy was a Minister it was under £4 million — a third of what it is now.

When I was a Minister I did not make those sort of decisions. I was careful to make sure that there was equity in anything I did. I did not make decisions off the top of my head. I consulted local authorities because I believed in local government. I did not believe in riding roughshod over them. Did the Minister consult the local authorities? If not, why not? Do they want to take over group water schemes? Do they have funding to provide for the revenue and capital needs of group schemes? Did he ask the representatives of these schemes what they felt about this?

It was the declared policy of my Fianna Fáil predecessor.

We have been very fortunate with rural electrification. Last week we debated the Credit Union Bill, and we paid tribute to the credit unions for the job they have done. Group water schemes made a tremendous difference to rural Ireland in terms of economic and social development. The least I would have expected the Minister to do was talk to representatives of the group water schemes, recognise the federation and negotiate with it. The federation called for a meeting with the Taoiseach but he refused to meet it.

The federation did not exist until three weeks ago.

On the question of local government reform, it is not good enough to tell local authorities that their funding will come from motor taxation. Apart from the Government, no one believes that motor taxation should be used to pay for local charges. However, this is the only measure announced by the Minister in terms of the exact amount of funding which will be made available to local authorities this year.

This proposal is badly thought out as the Minister does not know the amount local authorities will be allowed to collect by way of motor taxation in the coming years. In reply to a parliamentary question from Deputy Dempsey last week the Minister said the amount would be 6 per cent over two years and that this was explicit. He went on to say no increase would be allowable and that this was agreed unless the base rate for tax was increased by the Government. I ask the Minister to compare this with the statement in his press release on 19 December that during 1999 and subsequent years local authorities would have discretion to vary the national rate by not more than 6 per cent. Which statement is correct? Will local authorities have discretion to vary the rate by not more than 6 per cent during 1999 and subsequent years or will the rate be 6 per cent over two years with no discretion to vary the rate during subsequent years?

I ask the Minister to meet the federation. Deputy Dempsey, on behalf of Fianna Fáil, adopted a rational and reasonable approach in his letter to the federation. He said there would be equity in the provision of a water system, an allocation would be made for the running of the schemes and he would discuss the matter with local authorities and the representatives of group water schemes to ensure the provision of a top quality water supply. I wish to share my time with Deputies Hughes and Killeen.

I thank my colleagues for sharing their time with me so that I can contribute to the debate on this very important issue. Unlike the Minister of State, Deputy Higgins, the Minister may not be aware that many years ago community groups in County Mayo set up group water schemes because there was little prospect of the introduction of a regional water scheme. The 350 group schemes in the county are very successful and provide a service to the public at no cost to the taxpayer. The package of measures announced by the Minister will, unfortunately, interfere with these schemes.

Many of the schemes introduced ten to 15 years ago need to be renewed and upgraded, while their running costs are increasing on an annual basis. As a result, group scheme trustees have had to impose increased charges on their members who are satisfied to pay them because they are competitive and, in many cases, lower than the rates laid down by Mayo County Council.

The package of measures introduced by the Minister benefits the majority of the public but it gives the impression that water is free. However, it is important to point out that water is not free. Those of us who have served on county councils know that the costs of providing a water supply and maintaining sophisticated water treatment plants are escalating. The charges which have been abolished accounted for only a fraction of the costs incurred by county councils in providing a water supply. County councils were happy to carry the additional costs and they used the rate support grant and other sources of revenue to cover these. However, the Minister has abolished water charges and the rate support grant and introduced an equalisation fund. This means most rural counties are dependent on the whims of the Minister for the Environment of the day to distribute the equalisation fund in a fair and equitable fashion.

I explained the position at regional seminars.

I will explain to the Minister just how unfairly he has treated County Mayo this year. Despite the allocation of extra funding for local and regional roads——

And water and sewerage schemes.

——our entitlement on the basis of overall road mileage is down. County Mayo has 6.9 per cent of roads——

It has received more money than ever before.

The Minister will have 40 minutes but I have only seven minutes. I acknowledge that we have received more money but, on a percentage basis, it is down.

The Deputy can stand the figure on its head but it is still an increase.

The distribution of the equalisation fund will depend on the whim of the Minister of the day. It will not be distributed on the basis of equality and equity.

I will explain it again to the Deputy.

County Mayo and similar counties will be the losers. As a taxpayer, citizen and public representative, I do not want to be reminded in years to come by the citizens of Dublin, Cork, Limerick and other large urban areas that the people of County Mayo and elsewhere are dependent on subsidisation by the car owners of those cities to the extent of £6 million a year.

Does the Deputy know how income tax works?

As a result of the Minister's proposals, Mayo County Council's internal revenue has been slashed by £6 million. The Minister has destroyed the sound substantial funding of Mayo County Council, which is a progressive council. He has also put at risk its developmental plans, many of which have been gathering dust on the Minister's desk for the past two years.

I have been pumping money into them.

The Minister has taken it upon himself to shake the dust off these plans during the past week or two and allowed the Minister of State, Deputy Higgins, and the Minister for Tourism and Trade, Deputy Kenny, to announce schemes. I am glad that schemes which have been delayed for the past two years will begin shortly. I do not want to be subsidised by the citizens of the major cities.

What about income tax?

In County Mayo, 97 per cent of the population was satisfied to pay water charges and the collection rate this year was the highest ever. The Minister has introduced an inequitable and discriminatory system. The people of rural Ireland feel very let down by the Government in respect of this and many other issues, not least of which is the creation of jobs.

I fully support the points made by my party's spokesperson. Approximately 12,000 households in County Mayo are dependent on the outcome of the Minister's wily political dancing, procrastination and obfuscation. He will introduce another package of measures in a few weeks in an effort to secure maximum political advantage. However, I assure him that he will not do so.

This is pathetic.

Most of his colleagues in this tripartite Government remind me of door salesmen who have one foot in the door and who have one message for certain customers and a different one for others but who sing a different tune the next day when it gets too hot in the kitchen.

The Deputy is mixing his metaphors.

The Minister is aware of the division among the members of the Government. Many of them speak on local radio on a daily basis as though they were Independents. They cannot be controlled because the largest party in Government has no policy on any matter and is running around like a headless chicken. The Minister's colleagues will rue this approach.

I support the motion in the names of Deputies Dempsey, O'Hanlon and Dermot Ahern. In fairness to the Government, it is not attempting to hide the fact that this is a political decision. It has effectively admitted that and that it is an attempt to buy votes in urban areas in the run up to the general election.

I can imagine the attacks which would be made on a Fianna Fáil Minister who made a similar decision. However, I do not visualise such a Minister being so foolish as to make a decision which is clearly so inequitable and deals such an unfair hand to a huge proportion of the community. I can imagine the kind of attack he would come under from the Labour, Fine Gael and Democratic Left parties. A question I would like answered is: did the Government not realise there was inequity in what was being decided? It would have been impossible for it not to realise there was grave inequity. Did the Government care? If some people in Government cared, there is no evidence at this stage that they did anything about that. The 1977 decision to remove domestic rates has been much maligned but it must be said that it was equitable. Regardless of whether a house was in the centre of Dublin, another city or rural Ireland, rates were removed from it.

The decision in relation to water charges applies only to those households who get their supply from local authorities. That clearly undermines those who have put a great deal of work into getting a supply for themselves. The Government's decision makes a mockery of the decision to set up a ministry for western development and rural renewal. That was an afterthought — another position was intended for the Minister of State in question. When one sees the type of decisions the Government has made, and this is perhaps the most striking one, it is clear that it does not have any commitment, beyond the PR exercise of creating a ministry, to the people of rural Ireland or to western development.

The Government's amendment refers to a new, buoyant funding system for local authorities which nobody seems to know anything about and on which the Minister is slow to give details. It also refers to consolidating these charges into general taxation which, as anybody who has taken the trouble to study the pattern of taxation in Ireland will know, is the exact opposite to what is recommended in any report on taxation. Nevertheless, that is the route the Government has chosen to follow. It believes the political advantage it thought would accrue from this decision was good reason for going down that route and it is now facing a difficult situation.

Where in this new buoyant system for local authorities is the alternative funding? We are all aware motor taxation already existed and in the previous archaic system it was transferred directly to the Department of the Environment and subsequently redistributed to local authorities under various headings, mainly in road grants.

It did not work like that.

The taxation in relation to water and other charges already existed. I am sure the Minister will have a convoluted way of explaining what happened to the taxation gathered from motor tax heretofore.

It did not go to the Department of the Environment.

He may tell us it went to Third World countries or elsewhere, but we all know it went into general taxation. It is expected now to be sufficiently topped up to make up for the shortfall that arises from the removal of these charges. Since the Minister is not in a position to tell us that amount, it is difficult for those on this side of the House to know the additional charge that will be put on motor tax to make up the shortfall.

It is printed in the programme. Did the Deputy read it? The figures were in the brochure.

I read the replies to a number of questions tabled by me to the Minister on this matter and elicited from them that he knew little about what he was doing. If he knew the answers, he did not put them on the record of the House.

The Deputy has not read it.

If the information was available to the Minister, he could have made it available but he did not. The Minister does not know what he is doing. If the shortfall is to be made up from motor tax, we will have some difficulty in taxing our cars in the future. This is a mess which has been created by Government. It is up to the Minister to address it. Regardless of the smart alecky answers the Minister throws across the House, the responsibility is his. He is doing very badly in this instance. Deputy Dempsey referred to other instances where he did badly but on this issue in particular there is a problem which must be addressed. I offer the Minister some suggestions, one of which is that any group water scheme wanting to be taken over should be taken over immediately.

That has been offered already.

Another is those that do not want to be taken over, and there are good reasons some do not, should get a grant per domestic member. The inequity that exists for those with private supplies must be addressed and I am interested to know how the Minister proposes to do that.

What does the Deputy suggest?

I want to know the implications for local authorities of the Minister's smart decision that they will take over group water schemes that need to be taken over. Many of these schemes are already in difficulty. They need a great deal of repair. The county councils and local authorities will have to find the money to pay for these schemes when they are taken over. They will have a number of options in that regard. They can substantially increase their charge to commercial customers, who already pay rates, and to farmers. They can transfer the funding from roads, some of the other funds or the famous equalisation fund the Minister is proposing, but local authorities will have more responsibility and less money. That is the difficulty the Minister has placed them in and out of which he should take them. He may take the view that neither he nor anybody else in his party will be a Minister after the election——

I have better prospects than the Deputy.

——and somebody else will have to clear up the mess. That happened before, notably in 1987 and on previous occasions, but the Minister has created this problem and he is not attempting to address it.

There are people who want to form new group water schemes and there are many who do not currently have a supply. They are clearly in a serious situation and they are wondering where the funding will come from for their schemes. They are also wondering why they should bother setting up schemes. The Minister clearly does not place any value on the voluntary effort that went into setting up these schemes down through the years.

When leaks emanated from Government that this decision might be made, I attempted to raise it by way of parliamentary question, which in fairness was premature and ruled out of order because it was a hypothetical question. I sought to draw attention to the difficulties which would arise, and which have now arisen. I am astounded that the Minister or somebody else in Government could not have foreseen those difficulties. In a feeble attempt to answer one of my questions subsequently, the Minister said that he might be prepared to allow the PAYE allowance continue for members of group water schemes. He either did not realise or did not care that relatively few members of group water schemes would benefit from that. He certainly did not realise the difficulties he had created for those in group water schemes.

I understand there are 233 individual group water schemes in County Clare, one of which is the largest in Ireland. It is a particularly well run scheme but it is unlikely to apply to be taken over by the county council. In that event, the people who are members of that group water scheme will face the difficulty of collecting money while their neighbours in every direction are getting free water. I was an officer of a group water scheme for a long time and I know the difficulty in collecting money. I know the work that went into that and the hours worked by the people who run group water schemes. They make an enormous effort on behalf of their local communities and they do not need me to tell them that the Minister does not have any regard for their work or their communities.

The issues of equity and fair play are fundamental but there are also practical issues such as the way the schemes operate, how they can be funded and how to tell somebody they must pay for their group water scheme even though other people do not do so. Despite his unwillingness to meet its members, the Minister is undoubtedly aware of the setting up of the National Federation of Group Water Schemes.

I met them. The Deputy is always first with the news.

Some people in Government might be shocked by the speed at which rural people were prepared to organise and put forward their views. I welcome the fact that they were not prepared to be shot down by the Government. Their argument, which they made clearly, is that rural communities rely on cars much more than urban communities. They will be faced with double taxation while people who have free water in other local authority areas will pay the same level of motor tax. Effectively the people in rural areas will be subventing them. They are deeply concerned that their schemes will fall into chaos if their members refuse to pay, and there are strong indications that there are individuals around the country who will refuse to pay. Group water schemes already in debt to the banks are in the process of collecting their finance for this year in the hope of dealing with that.

The Government has clearly been caught offside in a political decision it thought was good news for it. However, it is not too late for it to address the problems. We on this side of the House have outlined what needs to be done, and I look forward to the Minister addressing those points with a good deal more honesty than I have seen heretofore.

I move amendment No 1:

To delete the words after Dáil Éireann and substitute the following:

"welcomes the comprehensive proposals of the Minister for the Environment for the reform of local government contained in the document Better Local Government — A Programme for Change, which will provide local authorities with a new buoyant funding system and consolidate local authority domestic water and sewerage charges into general taxation, and also welcomes the commitment by the Minister to undertake a full examination of a range of issues arising in relation to group water supplies, within the framework of a planned approach to the organisation and management of water supplies in rural areas, and to report to the Government thereon.”

On 19 December last, with Government approval, I launched a new programme for the development of local government entitled Better Local Government — A Programme for Change. The programme is the single most important local government reform measure in many years, and the issues which Deputies opposite are seeking to raise by this motion cannot be viewed in isolation from this radical and comprehensive programme. That is why my amendment seeks to broaden the debate and place it in its proper context.

The reform programme is an ambitious one which sets out to build a new local government, sharper, more independent and more powerful. It is not a discussion paper nor is it a series of recommendations. It is a programme of decisions. After a quarter of a century of discussion about local government reform, what is now being put in train is a comprehensive programme of specific actions. The programme is based on four core principles: enhancing local democracy and widening participation; serving the customer better; developing efficiency in local government; and providing a proper funding system for local government.

Over the past few weeks, I have attended a number of regional seminars on the new programme to present and discuss it with local authority members and officials. I have now provided that opportunity for every county in Ireland. I have been heartened by the response across all political parties, and I am determined to press ahead with its implementation with all possible speed.

An important measure in the reform programme is the enhancement of local democracy. Democracy demands more than simply holding elections every few years. It is about choice and empowering people to govern themselves. The democratic process in Irish local government has its roots in the earlier part of this century but local government, through no fault of its own, has not developed with the times.

The reform programme now sets out to modernise all aspects of local government through a range of measures. It will do this in four different ways: by recognising the legitimacy of local government as a democratic institution through constitutional recognition and by the ratification of the European Charter of Local Self Government, bringing Irish local government into line with European norms; by strengthening the corporate position of councillors within local government through the establishment of strategic policy committees which will enhance their political and community leadership role, and by redressing the imbalance that currently exists between management and the elected member; by broadening involvement in local government, through the participation of community, consumer and other interest groups and local development bodies currently at work in every community in Ireland; and by widening the remit of local government through forging new relationships with local development agencies and with the wider public service.

The Government and the public — the people who elect us — demand and expect high standards of service and efficiency from local government. All are now agreed that local government services must be delivered in a way that keeps its customers happy. Huge strides have been taken in recent years towards this objective. Local government is now more efficient and more consumer and citizen oriented. As I acknowledged at the regional seminars, local government, councillors, management and staff work exceptionally hard and have a commendable public service ethos and a commitment to the betterment of the communities they serve. However, we need to go further. The new programme is designed to build on what has already been achieved to ensure that citizens, the local government customers, are guaranteed efficient and user friendly services in all cases and in all areas.

Action is under way on a wide range of measures designed to improve the quality of the service which is already being provided. Legislation is in preparation and implementation groups are already at work dealing with particular aspects, for example, local authority linkage systems, linkage with the Garda Síochána and the introduction of the strategic policy committees. However, all these programme proposals will come to nought unless we are prepared to include in the reform programme measures that will, once and for all, restore local authorities to a sound financial footing and give them some assurance that the financial resources necessary to carry through their programmes will be made available to them.

To do this, the long-term decline in the financial independence of local authorities, presided over by a succession of Environment Ministers, needs to be reversed, and the basic drawbacks of the existing local finance system tackled. For a start, the local authority funding base was too narrow and there was little buoyancy. This problem was compounded by the fact that the authorities have been continuously conferred with new functions, with no allowance being made for the additional pressure such functions place on their finances. Furthermore, the authorities were at the mercy of central government to the extent that they never knew for certain how much rate support grant they would receive from year to year and, in addition, the grant did not always keep pace with inflation. As a result of these problems, the authorities built up substantial revenue account deficits and were unable to respond to the legitimate demands of their customers.

The policy agreement between the three parties in Government. A Government of Renewal, gave a commitment to commission a professional study on local government funding to see how we could introduce "a fair, equitable and reasonable system of funding". I engaged KPMG Management Consultants to carry out this study, the focus of which was to set the agenda for change.

A range of possible funding options was examined, each of which involved advantages and certain disadvantages. The underlying conclusion was that there is no one right way to fund local government — it is a matter of weighing up the pros and cons of a number of options in order to decide which is the most suitable having regard to existing and future requirements.

From the start, I accepted that a solution to the problem of local authority funding was a sine qua non of any meaningful attempt to reform local government. Regardless of the difficulties, we cannot stand still and allow the existing system to limp along, perhaps with just some small changes at the margins. To do so would leave the system without direction, without a future and could, ultimately, seriously threaten the very existence of local government.

For these reasons, I was very pleased that the Government agreed to my proposals for a fundamental restructuring of the system of funding local authorities in the context of this comprehensive reform package. The new, stronger, more independent, financial base for local authorities is essential if the other initiatives contained in the reform programme are to become a reality. Hoving spoken at regional seminars in every corner of this land, I know there is a palpable yearning among local authority members of every political persuasion for local government reform. They support this package, not every dot and comma, but the general thrust of it. If for whatever political motives because this is election year we, or the Deputies opposite, do fatal damage to this set of proposals in the weeks and months ahead we will be doing a great disservice——

The whole proposal is politically motivated.

Deputy Molloy was once Minister with responsibility for local government.

We know what it is all about.

An Leas-Cheann Comhairle

The Member in possession, without interruption.

The Minister of State at the Department of the Environment is still expending money undoing the damage done during Deputy Molloy's sojourn in that Department in terms of low cost housing. Houses were built like match boxes and without chimneys.

The Minister is pathetic.

The Deputy had his chance and he did the damage. He is willing to sign blank cheques now, even if Deputy Harney does not allow it. There is a genuine opportunity to build political consensus well in advance of publishing the document. Most political parties have been in Government in the past five years, and in the next ten years some combination of those parties should allow local government to thrive, real powers to be devolved and a proper funding base to be put in place. The proposals the Government has accepted go a long way towards achieving those objectives.

Service charges was a contentious issue for many years and had to be dealt with head-on in any proposals for local authority funding. It is an accepted principle of charging for services that the amount you pay should depend on the amount of service you use. Can one imagine the ESB imposing a standard charge for every user of electricity? Would it be acceptable for the ESB to charge every householder the same amount regardless of how much electricity they used?

We told Deputy Spring that in 1983 when he brought in service charges.

That was not the case with charges for domestic water and sewerage services which were either flat rate charges or related to broad valuation bands. The Government took the view that because those charges are not related to usage they are, in effect, taxes and should, accordingly, be consolidated into general taxation. As a result, under the new arrangements, domestic water and sewerage charges will no longer be levied with effect from 1 January 1997. Charges will remain for commercial water and sewerage services where the volumes consumed are larger and where users can generally be charged according to the amount of service they use. Refuse charges will also remain as they can be readily related to usage. A number of local authorities already operate a tag system under which a charge per bag is levied.

The most important feature of the new funding arrangements is the fact that we are giving to local authorities full ownership of the entire proceeds of one single tax, namely motor tax. This money will be ring-fenced by legislation that I will bring before the House in this session and guaranteed as future income to local authorities. I emphasise that this does not involve new taxation. Instead, rather than being paid into the Exchequer, motor tax income will be available to fund local authorities which have collected the tax on behalf of the Exchequer for many years.

Why motor tax, one might ask? First, this is an extremely buoyant source of income — the KPMG strategy identified lack of buoyancy as one of the main weaknesses of the existing system.

It is buoyant as long as car sales are increasing.

Second, it is local authorities which provide vehicle owners with the essential road and traffic services. Third, it meets the criterion of simplicity while allowing for a degree of local discretion. Income from motor tax will significantly exceed the combined income from rate support grant and domestic water and sewerage charges — that point has escaped many commentators. Already, it is expected that 1997 car sales will increase above the record 1996 level by a substantial margin. That is good news for local authorities. It means they will share in the current economic boom and in the benefits at community level in terms of improved services.

It is also important that the authorities should have a measure of discretion over their local funding system. Under the new system, while the basic rates of tax will continue to be set nationally, local authorities will be able to vary the rates of motor tax on motor cars and motor cycles by up to 6 per cent, subject to a maximum of 3 per cent in 1998, the first year the local variation will apply. There will be no change in motor tax rates in the interim. I will explain this matter because Deputies may have misconstrued it. I have built in a buoyancy to a maximum of 6 per cent local discretion. In other words, it will be open to local authorities to vary the base rate by 6 per cent, 3 per cent next year and 3 per cent the year after. Thereafter, unless the base rate is changed by central Government, there will be no further discretion available at local authority level. It will be up to the Government to see how buoyant the system is and, if there is need for greater flexibility, to increase the base rate. It is a good clear system, but if any local authority does not wish to take advantage of the variation of 3 per cent next year and 3 per cent the year after it may decide not to do so.

The Minister's view has changed since the announcement in his document.

An Leas-Cheann Comhairle

Does the Minister wish to give way to the Deputy?

No, I do not, my time is limited. As the amounts collected by different motor tax authorities will vary, in some cases significantly, from the income levels generated by the existing system, a transfer of resources is necessary——

The Minister is giving his interpretation of the matter, but that is not what is stated in the document.

That is not true.

It is a total contradiction.

An Leas-Cheann Comhairle

Let us hear the Member in possession.

I explained twice during Question Time the view I have expressed.

May I read the truth into the record?

The Deputy would not know it if he saw it.

The document states that in subsequent years the maximum rate will be 6 per cent.

The Deputy is either obtuse or dense, or he is deliberately misconstruing the words.

It is not in order for the Minister to make personalised comments about any Deputy or to tell lies.

May I continue without interruption, or will I be shouted down?

An Leas-Cheann Comhairle

Perhaps we could have an orderly debate without further interruption. If the Member in possession addressed his remarks through the Chair, it would be much less provocative. The Minister to continue, without interruption.

I will do my best if I am not shouted down. I have explained this system, which is not complicated; it is a simple system. There is a power to vary from the base, as I explained at the initial press conference.

The word "base" does not appear in the document.

Most people understand it, but there are none so blind as those who will not see. To facilitate the fact that not every local authority will generate the same amount of motor tax, I am establishing an equalisation fund into which will be paid 20 per cent of the proceeds of motor tax on motor cars and motor cycles and the full proceeds of all other motor tax revenues, including driver licence duties. This fund will be used in the first instance to make good all income lost through the abolition of domestic water and sewerage charges and the rate support grant. The balance will be allocated as equitably as possible among local authorities, having regard to their needs and resources. All local authorities will benefit from this.

Despite earlier attempts by me to clarify the matter, some people, for their own purposes, still suggest that motor tax is being increased across the board to pay for the abolition of water charges. This is totally wrong. The new arrangement involves no new tax. Rather, it involves a reassignment of the proceeds of an existing tax, at existing rates. Nobody will pay more money. This is more than sufficient to allow the rate support grant to be discontinued and local authority charges for domestic water and sewerage services to be consolidated into general taxation. Any increase in the rate of motor tax within the 6 per cent limit which a local authority, at its discretion, may decide on will be for the sole purpose of raising additional finance to improve or extend local services. It is a plan for buoyancy in the future. No local authority will need to raise the rate of motor tax to make up for the loss of water charges. That loss will be made up without a penny extra being paid in taxes. Is that clear?

What about diesel and petrol?

Legislation to give effect to the new funding arrangements is currently being drafted.

The Minister is being dishonest.

Pending enactment of the legislation, interim funding arrangements are in place whereby the rate support grant is being paid to the authorities for the first five months of this year.

I am confident the financial proposals contained in "Better Local Government — A Programme for Change" will facilitate the long-term development of local government into the new millennium. At long last, a new financing system for local government is being introduced which will contain real buoyancy and an element of local discretion. If we want effective local government, we must provide it with the resources it needs to do its business and this is exactly what I have set out to achieve. Let us not engage in political point scoring on this. If we do, the ultimate loser will be local government.

Under the new arrangements, no household, urban or rural, connected directly or indirectly to a public water supply will have to pay for a domestic water supply. I dispel the myth that only urban households will benefit from these arrangements and that they will do so at the expense of rural households. According to the 1991 census returns, some 235,000 rural households, or 55 per cent of total rural households, are supplied directly or indirectly from a local authority public water supply. The majority of rural dwellers will benefit from the abolition of water charges.

Indirectly as a group scheme.

I will give the Deputy the figures for group water schemes. All of these, including the 85,000 rural households served by group water schemes supplied from a public main, will benefit directly from the abolition of water charges. A total of 55 per cent of rural dwellers are better off as a result of my announcement.

What about the other 45 per cent?

Some 40 per cent of all farm dwellings are connected, directly or indirectly, to a public water supply.

From the outset, I acknowledged that the position of households served by group water schemes needed special consideration in the light of the decision to abolish domestic water charges. I was particularly concerned about the 55,000 households served by group water schemes which have private supplies. Some of these frequently experience problems with the quality of supply and because of the condition and efficiency of the headworks and distribution systems. Difficulty arises for the operators and members of these schemes in dealing effectively with these deficiencies. These difficulties were not addressed by Ministers in the past.

It must be a cause of major concern that the quality of water in many of these schemes is not up to standard. The recent Environmental Protection Agency report on drinking water quality indicates that 43 per cent of private group supplies suffer some degree of coliform contamination.

Sixty-two per cent of public schemes.

This has arisen largely as a result of the lack of investment in water filtration and disinfection facilities. Many of these schemes were constructed in the 1960s and 1970s when cost effective and straightforward water treatment technology was not widely available.

Many group schemes are currently under resourced and unable to respond to the challenging task of supplying water in compliance with the standards for drinking water. Having regard to the increased vulnerability of private sources to organic pollution, it is essential that greater resources should be provided to enable these schemes to connect to a good quality public supply or, where this is not feasible, to put in place proper water treatment facilities.

Last January, for the first time, I announced a new multi-annual programme with capital funding of £5 million for 1997 to establish a programme of works with the specific objective of improving water quality in group supplies and enabling local authorities to take over private schemes where members so wish. This programme of upgrading works would complement the established and successful programme of capital grants for new group schemes and for the extension and upgrading of existing ones. When I became Minister I more than doubled the grant per household, from £700 to £1,600, to those who wanted to provide water through a group scheme. I more than tripled the grant for group sewerage schemes, from £500 to £1,600 per household. That is an indication of my support for group schemes. I also acknowledged the work of successive organisers of group water schemes.

I am devolving full responsibility for small public water and sewerage schemes to local authorities. Capital funding in the form of block grants will be made available to them for this purpose in 1997 and future years. Deputies can discover what else I have done in support of group water schemes if they read my speech.

Last week at Question Time, I informed the House that within the framework to which I referred, the question of the running costs of group water schemes and charges to members for domestic supplies was being considered. On 20 February, I met representatives of the National Federation of Group Water Schemes, the Irish Farmer's Association and the Irish Creamery Milk Suppliers Association to hear their views on the issue. I have also received written submissions from trustees and members of private group water schemes, many of whom support the action I have taken. Local authority managers are being consulted on the detailed arrangements for the transfer of responsibility for the administration of the grants schemes from my Department to the local authorities and on the question of drawing up integrated strategic plans for rural water supplies. This would include the setting up of a comprehensive inventory of group schemes and the development of an intensive monitoring programme for water quality, neither of which is currently in place.

I am giving careful consideration to the broad range of views presented to me. I am mindful of the positive and helpful suggestions put forward and will examine the submissions I received with great care. Rushing out with offers of blank cheques, as the Progressive Democrats has done, will not advance this cause.

In 1997, the provision of almost a quarter of a billion pounds, comprising £173 million in State grants and more than £68 million in local authority resources to non-national roads, is clear evidence of my commitment to rural Ireland. I resent Deputy Dempsey's comment that the Government has neglected rural Ireland. I am prepared to set my record as Minister against that of any of my predecessors. Between the launch of the restoration programme in mid-1995 and the end of 1996, a period of just 18 months, more than 5,000 road schemes had been completed, with more than 8,000 kilometres, or nearly 10 per cent of the entire network of abandoned regional and county roads, benefiting.

The Minister should come down to County Meath.

The restoration programme is producing the required results in terms of value for money and outputs, and local communities are witnessing the fruits of the increased expenditure by the Government in this area. Our multi-annual programme is transforming the non-national roads network, and with it a significant aspect of the quality of the lives of those who depend on them.

I invite Deputies opposite to look into their hearts and compare my record of achievement with their object failure to arrest the decline of the roads on which rural communities depend. I assure them, and the community generally, that rural water supplies will be dealt with in a planned, integrated way, just as we have done in the case of non-national roads.

The House should reject the Fianna Fáil motion and adopt instead the amended motion in my name, which puts the whole issue——

On the long finger.

——in its proper perspective, and holds out the prospect of a properly considered, long-term solution to a long standing problem.

I wish to share my time with Deputies Ó Cuív, Keaveney and Moffatt.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

Although the Minister made a comprehensive speech, he did not address the issues put forward by Deputy Dempsey or the concerns of those involved in group water schemes. Despite his Department's spending, it has not spent money on water schemes or helping private schemes. Rural Ireland has been forgotten as regards group water schemes. Water charges were abolished by the Minister but those who spend thousands of pounds maintaining their own water supply each year will not get anything under any proposals made so far. Certainly the Minister did not think through the proposals he announced in Galway.

The Government has completely mishandled the water charges issue and deserves the criticism it has received. I am surprised Fine Gael has done a U-turn on the Government's decision. In fact, one could say it has done two U-turns if one includes the statement made by its press office and the Taoiseach's office. When one hears the Minister for Social Welfare, Deputy De Rossa, blame farmers for the level of protest, it looks as if the left-wing parties have won out again. It is not only farmers who are protesting but thousands of people who have been involved in group schemes for many years. The Taoiseach and his Ministers have turned the water charges issues into a political farce and are stepping in and out like characters at Lanigan's Ball. It is time the Government got the message and dealt fairly with people in rural areas and ended this discrimination.

The Minister said in Galway he wanted the local authorities to take over all rural group water schemes with £5 million. A Deputy from a Government party, my constituency colleague, Deputy Connaughton, said at a public meeting that he would not let the Department or the councils within an ass's roar of the water schemes.

Those who attended a large meeting in Barnaderg near Tuam on 30 January felt that people in rural areas should not have to pay increased road tax to subsidise free water schemes in cities and large towns. The Minister's decision has left these schemes, and their trustees and organisers, in a financial and environmental crisis. The sooner he tells us what he proposes to do, the better. Deputy Dempsey suggested he could address the inequity by giving a direct subvention to the householder or to the appropriate group water schemes.

Up to 20 per cent of houses in County Galway are linked to group water schemes and do not benefit from the Minister's decision. There is no timescale for taking over the schemes and local authorities have been slow to do so in the past. People travelled from as far away as Sligo, Clare and Monaghan to the meeting in Barnaderg near Tuam and were strong in their criticism of this decision. They said the Minister was talking about a paltry sum. Only 20 of 600 people at the meeting said they would like local authorities to take over the schemes. Local authorities are already short of cash and it is difficult to see how they can be responsible for water schemes on the instruction of the Minister.

Since 1963, 499 grant-aided group water schemes have been completed in County Galway. Indeed, the Minister has approved some schemes since coming into office. There is now administrative chaos. The Minister spoke about the devolution process where these schemes would devolve to local authorities from the Department. It is time he spoke about equity, stopped blaming the farmers and adopted a positive attitude to group water schemes. I am a member of a group water scheme comprising 540 houses. Members of that scheme have questioned whether they will continue to pay water charges and the increase in road tax. We have been given a double blow because each time a member of the Government talks about group water schemes, they forget about rural groups.

The Government has been embarrassed by water charges for some time. It introduced the delimiting Bill delimiting the powers of local authorities and that caused difficulties for rural schemes. After the by-election in Dublin last April the Government was scared that a candidate might be elected on this issue but that is no reason for introducing inequitable proposals. It is time the Government decided to help those helping others, like those involved in credit unions, by providing water for thousands.

Unfortunately, I do not have enough time to say what I would like on this subject. The case for group water schemes has been well made and the inequity as regards those involved in such schemes has been highlighted. I would like to speak on behalf of another group which is voiceless and, therefore, of no concern to this Government. I refer to the huge number of people who use private supplies of water, many of whom live in my constituency in the most westerly part of the country. What will the Minister do for them or will they be forgotten because they are not represented by an organised group? Does equity depend on lobby and power groups?

There is a seething anger among those on private supplies who, coincidentally, live far from urban areas. My neighbours and I will pay more than £100 extra in petrol taxes to enable those living in cities to have free water and a free sewerage system, which is unjust.

The Minister said there is no extra taxation involved. I do not understand how somebody can wipe out £69 million in charges and not have to raise £69 million elsewhere. The price of petrol was increased by 9p per gallon in the budget and for rural people living furthest from population centres it is a direct tax on distance. These people will not benefit from the abolition of water or sewerage charges. The number of people in my area who do not have to pay for sewage treatment is negligible.

The Minister also spoke about roads. Although this debate is not about that issue some points he made must be addressed. Connemara is getting less money for roads because the Minister for Arts, Culture and the Gaeltacht has pulled the money for the bóithre áise and the Minister for the Environment has done away with our supplementary grant. We have less money for roads than ever before. When we have major bridge problems, we must take money from the running cost grants. If one asks people in Connemara about roads, they will say they have less discretionary money and money for roads than ever before. For the first time the Department of the Environment gave us a list of roads to be dealt with leaving us with £863,000 from an £8 million discretionary grant for County Galway. Is this devolution of power?

The question of small rural businesses must be addressed. Rural businesses, which are seasonal in nature and have small turnovers because of declining population caused by Government policy, are the only group paying commercial rates and water and sewerage charges. How will they survive? The Minister spoke about general taxation and relative usage. How can he justify that as regards small businesses which have little use for water and sewage treatment and pay charges on a fixed basis? It is unbelievable that motor taxation and local authority financing are being linked. When we analyse the position in three to five years time to see in which counties there was an increase of 6 per cent because the councils concerned were starved of funds — there will be no increase prior to the general election — we will find it was the counties which offer fewer services. It is like saying that an apple and an orange are the same because they are both round and approximately the same size.

As everybody knows, the only reason this change was made was political expediency. It was an advantage that a certain percentage of those living in rural areas benefited. It was a cynical exercise, at the expense of overburdened and under-funded rural communities, to regain support in Dublin where it was melting away.

Funding is being made available to upgrade water schemes following which they will be taken over. Does this mean that schemes which need to be upgraded and cannot be taken over because of their location will be penalised? Rural communities want to know if they will find themselves at the bottom of the pile when it comes to State funding and at the top when it comes to the payment of taxes. It is about time the Minister clarified the matter.

Last weekend the Minister, Deputy Howlin, visited Donegal where the county council is well organised and has advanced many projects. Since the abolition of water charges was announced on 19 December with great speed — the rate at which one would expect a decision to be made in the case of an application for a new fire station in Buncrana or a sewerage scheme in Greencastle or Malin — there has been much confusion in the county. The county council raised £3.85 million by way of these charges in 1995 and £4.5 million in 1996. It used imaginative measures in collecting them, including prize draws at county and urban level, for which it must be complimented. The Minister has, however, pulled the rug from under its feet. Prior to announcing his decision it had agreed the estimates, in which provision had been made for scheme takeovers, and drawn up a five-year plan. So much for careful planning.

Urban councillors find themselves in a worse position. They look to the county council to provide funding. The county council, in turn, looks to the national Parliament to provide a float. About 280 schemes have been taken over but 350 remain while others are being considered. The group water scheme is a valuable asset to rural communities.

There is a need for clarification. Why did the Minister move so fast? He said that outstanding charges can be collected, but the chances of collecting this money are slim.

Given that many families in rural communities need two cars because of the special circumstances in which they find themselves, we have a second double taxation issue for a Labour Party Minister to address. The funding raised by way of motor taxation will not be sufficient to maintain and improve roads, many of which have not been tarred in 20 or 30 years.

As a public representative, I find it difficult to explain the reasoning behind the announcement to motorists and group scheme participants. We want to know how the equalisation fund will be distributed. As Deputy Hughes stated, we do not want to be subsidised from Dublin and as in the case of the education boards proposed by the Minister for Education, Deputy Bhreathnach, we do not know what the cost will be. The abolition of water charges was a good idea but nobody thought through the implications. Rural dwellers have come to expect discrimination and inequity rather than equality. I would like someone to prove them wrong and to sort out this mess.

I am glad to have this opportunity to comment on the issue of water and sewerage charges. Their abolition has been presented under the guise of better local government but the Minister has failed at the first hurdle because all he has managed to do is to divide urban and rural communities. The interests of public and private group water scheme participants and in particular those who source their supplies from private wells have not been taken into account.

The Minister said that this is only the beginning, that there will be further reforms. If so, it is a poor beginning. The rate support grant is being done away with and replaced by motor taxation revenue which the Minister said should be sufficient. Every county councillor disputes this. There will be an increase of 3 per cent in 1998 and up to 6 per cent in 1999. There will be no increase in 1997 because it is an election year. There are many questions to be answered. The funding raised by way of motor taxation should be used to finance road improvements. It should not be used to defray water and sewerage charges.

The Minister said time and again that this change is only one aspect of the package of measures he has in mind. Approximately £5 million is to be made available to county councils this year but that will not be sufficient to resolve the problems in County Leitrim. There has been no talk about the maintenance and upgrading of group water schemes. How will the issue of contamination of supplies be resolved? The Minister said he intends to broaden the funding base but by removing water charges he has narrowed it. This is not a good first step for advancing local government.

Debate adjourned.