I move the following Financial Resolution:
Excise Duties on Mechanically Propelled Vehicles.
(1) THAT in this Resolution–
‘Act of 1952' means the Finance (Excise Duties) (Vehicles) Act 1952 (No. 24 of 1952);
‘Act of 1992' means the Finance (No. 2) Act 1992 (No. 28 of 1992);
‘Act of 2003' means the Motor Vehicle (Duties and Licences) Act 2003 (No. 5 of 2003).
(2) That the Act of 1952 (as amended by section 4 of, and the Schedule to, the Act of 2003) shall, as respects licences under section 1 of that Act taken out for periods beginning on or after 1 January 2004, be amended in Part 1 of the Schedule to the Act of 1952 by substituting the following for paragraphs 1 to 6:
‘1. Vehicles of the following descriptions not exceeding 500 kilograms in weight unladen:
(a) bicycles (other than bicycles which are electrically propelled), or tricycles (other than tricycles neither constructed nor adapted for use nor used for the carriage of a passenger), of which the cylinder capacity of the engine–
(i) does not exceed 75 cubic centimetres €37
(ii) exceeds 75 cubic centimetres but does not exceed 200 cubic centimetres €51
(iii) exceeds 200 cubic centimetres €67
(b) bicycles or tricycles which are electrically propelled €31
(c) vehicles with three or more wheels neither constructed nor adapted for use nor used for the carriage of a driver or passenger €67.
2. (a) Vehicles (commonly known as dumpers) not exceeding 3 metres cubed in capacity, level loaded, designed and constructed for use on sites of construction works (including road construction and house and other building works) for the purpose of conveying concrete, rubble, earth or other like material where the person taking out the licence shows to the satisfaction of the licensing authority that the vehicle is used mainly on such sites, and on public roads only–
(i) for the purpose of proceeding to and from the site where it is to be used, and when so proceeding neither carries nor hauls any load other than such as is necessary for its propulsion or equipment, or
(ii) for the purpose of conveying concrete, rubble, earth or like material for a distance of not more than one kilometre to and from any such site €78
(b) Vehicles (commonly known as off-road dumpers) exceeding 3 metres cubed in capacity, level loaded, designed and constructed primarily for use on sites of construction works (including road construction and house and other building works) for the purpose of conveying concrete, rubble, earth or other like material and incapable by reason of their design and construction of exceeding a speed of 55 kilometres per hour on a level road under their own power and which are the subject of special permits under article 17 of the Road Traffic (Construction, Equipment and Use of Vehicles) Regulations, 1963 (S.I. No. 190 of 1963) €673
(c) Any vehicle (other than a vehicle constructed or adapted for use and used for the conveyance of a machine, workshop, contrivance or implement, by or in which goods being conveyed by such vehicle are processed or manufactured while the vehicle is in motion) constructed or adapted for use and used only for the conveyance of a machine, workshop, contrivance or implement (being a machine, workshop, contrivance or implement which is built in as part of the vehicle or otherwise permanently attached thereto) and no other load except articles used in connection with such machine, workshop, contrivance or implement or goods processed or manufactured therein including any vehicle (commonly known as a recovery vehicle) constructed or permanently adapted for the purposes of lifting, towing and transporting a disabled vehicle or for any one or more of those purposes €253
(d) Vehicles (commonly know as forklift trucks) designed and constructed for the purpose of loading and unloading goods where the person taking out the licence shows to the satisfaction of the licensing authority that the vehicle is used on public roads only
(i) for the purpose of proceeding to and from the site where it is to be used for loading and unloading, and when so proceeding neither carries nor hauls any load other than such as is necessary for its propulsion or equipment, or
(ii) as part of the process of loading or unloading, for the purpose of conveying goods for a distance of not more than one kilometre to and from the site where it is loading or unloading €78
3. (a) Vehicles constructed or adapted for the carriage of more than 8 persons which are owned by a youth or community organisation and which are used exclusively by the organisation solely for the purpose of conveying persons on journeys directly related to the activities of the organisation and which have seating capacity for–
(i) more than 8 persons but not more than 20 persons €117
(ii) more than 20 persons but not more than 40 persons €153
(iii) more than 40 persons but not more than 60 persons €307
(iv) more than 60 persons €307
(b) Vehicles (other than those referred to in subparagraph (c) of this paragraph) used as large public service vehicles within the meaning of the Road Traffic Act 1961, and having seating capacity for–
(i) more than 8 persons but not more than 20 persons €117
(ii) more than 20 persons but not more than 40 persons €153
(iii) more than 40 persons but not more than 60 persons €307
(iv) more than 60 persons €307
(c) Vehicles which are large public service vehicles within the meaning of the Road Traffic Act 1961, and which are used only for the carriage of children, or children and teachers, being carried to or from school or to or from school-related physical education activities, and are either licensed under Article 60 of the Road Traffic (Public Service Vehicles) Regulations, 1963 (S.I. No. 191 of 1963) as amended, or owned or operated by a statutory transport undertaking €72.
4. Vehicles of the following descriptions:
(a) vehicles designed, constructed and used for the purpose of trench digging or any kind of excavating or shovelling work which–
(i) are used on public roads only for that purpose or the purpose of proceeding to and from the place where they are to be used for that purpose, and
(ii) when so proceeding neither carry nor haul any load other than such as is necessary for their propulsion or equipment €78
(b) tractors (being tractors designed and constructed primarily for use otherwise than on roads and incapable by reason of their construction of exceeding a speed of 50 kilometres per hour on a level road under their own power) and agricultural engines, not being tractors or engines used for hauling on roads any objects except their own necessary gear, threshing appliances, farming implements or supplies of fuel or water required for the purposes of the vehicles or agricultural purposes €78
(c) tractors (being tractors designed and constructed primarily for use otherwise than on roads and incapable by reason of their construction of exceeding a speed of 50 kilometres per hour on a level road under their own power and not being tractors in respect of which a duty is chargeable at the rate specified in subparagraph (b) of this paragraph) which are used for haulage in connection with agriculture and for no other purpose €78
Where a tractor is fitted with a detachable platform, container or implement (being a platform, container or implement used primarily for farm work), goods or burden of any other description conveyed on or in the platform, container or implement shall be regarded for the purposes of this subparagraph as being hauled by the tractor,
(d) tractors of any other description € 253
(e) motor caravans, being vehicles which are shown to the satisfaction of the Revenue Commissioners to be designed, constructed or adapted to provide temporary living accommodation which has an interior height of not less than 1.8 metres when measured in such manner as may be approved by the Revenue Commissioners and, in respect of which vehicles, such design, construction or adaptation incorporates the following permanently fitted equipment–
(i) a sink unit,
(ii) cooking equipment of not less than a hob with 2 rings or such other cooking equipment as may be prescribed, and
(iii) any other equipment or fittings as may be prescribed €78
(f) vehicles which are kept and used exclusively on an offshore island to which there is no direct road or bridge access from the mainland €78.
5. Vehicles (including tricycles weighing more than 500 kilograms unladen) constructed or adapted for use and used for the conveyance of goods or burden of any other description in the course of trade or business (including agriculture and the performance by a local or public authority of its functions) and vehicles constructed or adapted for use and used for the conveyance of a machine, workshop, contrivance or implement by or in which goods being conveyed by such vehicles are processed or manufactured while the vehicles are in motion:
(a) being vehicles which are electrically propelled and which do not exceed 1,500 kilograms in weight unladen €80
(b) being vehicles which are not such electrically propelled vehicles as aforesaid and which have a weight unladen–
(i) not exceeding 3,000 kilograms €253
(ii) exceeding 3,000 kilograms but not exceeding 4,000 kilograms €320
(iii) exceeding 4,000 kilograms but not exceeding 5,000 kilograms €413
(iv) exceeding 5,000 kilograms but not exceeding 6,000 kilograms €572
(v) exceeding 6,000 kilograms but not exceeding 7,000 kilograms €774
(vi) exceeding 7,000 kilograms but not exceeding 8,000 kilograms €974
(vii) exceeding 8,000 kilograms but not exceeding 20,000 kilograms €974 plus €229 for each 1,000 kilograms or part thereof in excess of 8,000 kilograms
(viii) exceeding 20,000 kilograms €3,948
6. Vehicles other than those charged with duty under the foregoing provisions of this Part of this Schedule:
(a) any vehicle which is used as a hearse and for no other purpose €78
(b) any vehicle (excluding a taxi) which is used as a small public service vehicle within the meaning of the Road Traffic Act 1961, and for no other purpose €72
(c) any vehicle which is fitted with a taximeter and is lawfully used as a street service vehicle within the meaning of the Road Traffic Act 1961, and for purposes incidental to such use and for no other purpose €72
(d) other vehicles to which this paragraph applies and which have an engine capacity–
(i) not exceeding 1,000 cubic centimetres €151
(ii) exceeding 1,000 cubic centimetres but not exceeding 1,100 cubic centimetres €227
(iii) exceeding 1,100 cubic centimetres but not exceeding 1,200 cubic centimetres €251
(iv) exceeding 1,200 cubic centimetres but not exceeding 1,300 cubic centimetres €272
(v) exceeding 1,300 cubic centimetres but not exceeding 1,400 cubic centimetres €292
(vi) exceeding 1,400 cubic centimetres but not exceeding 1,500 cubic centimetres €313
(vii) exceeding 1,500 cubic centimetres but not exceeding 1,600 cubic centimetres €391
(viii) exceeding 1,600 cubic centimetres but not exceeding 1,700 cubic centimetres €414
(ix) exceeding 1,700 cubic centimetres but not exceeding 1,800 cubic centimetres €484
(x) exceeding 1,800 cubic centimetres but not exceeding 1,900 cubic centimetres €511
(xi) exceeding 1,900 cubic centimetres but not exceeding 2,000 cubic centimetres €539
(xii) exceeding 2,000 cubic centimetres but not exceeding 2,100 cubic centimetres €689
(xiii) exceeding 2,100 cubic centimetres but not exceeding 2,200 cubic centimetres €722
(xiv) exceeding 2,200 cubic centimetres but not exceeding 2,300 cubic centimetres €755
(xv) exceeding 2,300 cubic centimetres but not exceeding 2,400 cubic centimetres €786
(xvi) exceeding 2,400 cubic centimetres but not exceeding 2,500 cubic centimetres €821
(xvii) exceeding 2,500 cubic centimetres but not exceeding 2,600 cubic centimetres €961
(xviii) exceeding 2,600 cubic centimetres but not exceeding 2,700 cubic centimetres €999
(xix) exceeding 2,700 cubic centimetres but not exceeding 2,800 cubic centimetres €1,033
(xx) exceeding 2,800 cubic centimetres but not exceeding 2,900 cubic centimetres €1,071
(xxi) exceeding 2,900 cubic centimetres but not exceeding 3,000 cubic centimetres €1,109
(xxii) exceeding 3,000 cubic centimetres €1,343
(xxiii) electronically propelled €146.'.
(3) That the Act of 1952 shall, as respects licences under section 1 of that Act taken out for periods beginning on or after 1 January 2004, be amended by substituting the following for paragraph 5 of Part II of the Schedule (as amended by section 5 of the Act of 2003):
‘5. Where the applicant for a licence under section 1 of this Act satisfies the licensing authority that the vehicle in respect of which the licence is sought was constructed more than 30 years prior to the commencement of the period in respect of which the licence is sought the annual rate of duty shall, notwithstanding Part 1 of this Schedule, be–
(i) €19 where, apart from this paragraph, paragraph 1 of Part 1 of this Schedule would apply to the vehicle, and
(ii) €42 in respect of any other vehicle.'.
(4) That the Act of 1992 shall, as respects licences under subsection (3) of section 21 of that Act (as amended by section 6 of the Act of 2003) taken out for periods beginning on or after 1 January 2004, be amended by substituting the following for that subsection
‘(3) (a) There shall be charged, levied and paid on a trade licence a duty of excise of–
(i) in the case of a licence for exhibition only on a motorcycle, €45,
(ii) in the case of a licence for exhibition only on any other vehicle, €268.
(b) There shall be charged, levied and paid on a trade licence issued in place of a trade licence that has been lost, stolen or destroyed, a duty of excise of–
(i) in the case of a licence for exhibition only on a motorcycle €29,
(ii) in the case of a licence for exhibition only on any other vehicle, €65.'.
(5) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).
This resolution provides for the amendment of the Finance (Excise Duties) (Vehicles) Act 1952 and the Finance (No. 2) Act 1992, as extended by the Motor Vehicle (Duties and Licenses) Act 2003, in respect of rates of motor tax and fees for trade licence plates. The resolution will provide for an increase of 5% in the rates of motor taxation for licences taken out with effect from 1 January 2004. The decision to propose an increase in motor tax rates was taken to raise funding for the local government fund and, specifically, to provide extra funding for non-national roads.
It is important to underline the fact that motor taxation is different to other taxes. Unlike other taxes, the proceeds from motor tax are not paid directly into the Exchequer. Instead, motor tax is paid directly into the local government fund and is ring-fenced entirely for local government. It cannot be used by the Exchequer for any other purpose. The motor tax paid into the fund is supplemented on an annual basis by a financial contribution from central government. The fund is used predominately to finance non-national roads and the general purpose needs of local authorities.
The general purpose grants paid from the fund are discretionary block grants and may be used by authorities for whatever purpose they consider necessary. In general, they are used to supplement other current income sources such as specific State grants, commercial rates and fees and charges for services. The income from all these sources is incorporated into local authorities' annual budgets to fund a wide range of functions central to the social and economic lives of local communities. These operations include maintenance and development of the non-national road network, management of the planning system, upkeep of social housing, operation and maintenance of public water and sewerage systems, waste management, care of the natural environment, running the fire services and community development.
The level of funding available to local authorities has increased substantially under the new arrangements introduced by the local government fund. The level of general purpose grant aid to local authorities has, since this Government took office in 1997, increased on average by 85%, representing an average annual increase of some 14% over the past six years. This, in anybody's language, represents a valuable contribution to local government.
The establishment of the local government fund and its substantial funding by motor tax receipts has created an important link between the amount of tax paid by motorists and the visible and concrete service they get for that tax in terms of better roads. It is anticipated that the proposed 5% increase in motor tax rates will raise some €34 million extra for the fund next year. Clearly, raising taxes is not a popular thing to do, but I believe that this increase is fully justified because the funding raised will be re-invested in our non-national road network.
The national development plan provided for investment of €2.43 billion in the non-national road network in 2000 to 2006. Of this, €1.08 billion is scheduled for the BMW region and €1.35 billion for the south-east region. The BMW region accounts for 40,500 km or 45% of the network. Given the predominantly rural character of the BMW region, non-national roads play a very important role in its economic and social life and its future prosperity.
The south-east region accounts for some 50,000 km or 55% of the non-national road network. While considerable economic growth has been achieved throughout the region over the last plan, this has been centred predominantly around the region's four main cities and the larger urban centres. This has led to capacity constraints in these areas while at the same time the more remote rural sub-regions have suffered from the negative effects of peripherality and isolation. Investment in non-national roads in this region from 2000 to 2006 will improve access to such locations, promote them as places in which to live, work or establish enterprises and improve the quality of life for resident communities.
The additional €34 million, which is the total estimated yield from the proposed increase in motor tax from 1 January 2004, will be spent on non-national roads in 2004. This local government fund money is in addition to the increased Exchequer funding for next year as set out in the recently published Book of Estimates. Exchequer funding in 2003 for non-national roads is almost €40 million. The Exchequer provision for 2004 is €48.8 million – an increase of around €8.8 million over the 2003 provision. This increase in the Exchequer provision will provide funding towards the increased costs of key strategic non-national road projects which will assist housing, commercial and industrial development. The additional funds being provided in 2004 will enable local authorities to progress work on these critically important schemes situated on the country's regional roads network. It is important to highlight that all of this funding is additional to, and will build on, the record levels of funding already being provided for non-national roads in 2003. I presume colleagues know I am referring to strategic roads in that package as opposed to the €400 million, which is the total non-national roads package.
The restoration programme accounts for about half of non-national road State grants each year. This programme was introduced in 1995 to restore regional and local roads in county council areas that had become deficient due to underinvestment. Since 1996, more than €1 billion has been allocated to county councils for improvement works under the ten-year restoration programme from 1996 to 2005. The result will be that around 32,000 km of non-national roads will have been improved by the end of this year. In addition, county councils have been allocated almost €320 million for maintenance works under the programme since 1996.
A pavement condition study carried out in 1996 identified that 47,000 km of the non-national road network were deficient at that time. The success of this Government in the area of non-national roads can be gauged by the fact that by the end of this year around 32,000 km or 68% of the deficient network will have been restored to good condition. This is real progress.
I recently announced the award of a contract to RPS-MCOS Limited, for the carrying out of the second ever pavement condition study of non-national roads and a review of pavement management systems. This new study is part of the Government's ongoing commitment to restoring the network of regional and county roads to a satisfactory condition over the ten-year period 1996 to 2005. The results of the study will determine the progress made since 1996 and also the extent of deficiencies remaining in the non-national road network since the last study was carried out. The results will also form an important part in prioritising investment in the non-national road network and ensuring value for money.
The review of pavement management systems is a first. The consultants are being asked to review existing systems and recommend a single one for use by local authorities on the non-national road network. This is intended to assist local authorities in prioritising schemes for inclusion in the restoration programme. Work on the study and review will commence immediately and is expected to be completed by mid-2004. The highest ever level of State funding for the non-national road network, which will be available in 2004, will allow for continued investment in non-national roads which is necessary for regional development. This achievement will only be made possible by raising extra funding through motor tax.
This Government is showing its commitment to local government and the non-national roads programme. I want to make it abundantly clear that this level of commitment must be matched at local level. I do not want this extra funding from central government to be used as a substitute for local authorities' own resources contribution. I expect local authorities to maintain their own resources contribution to non-national roads and to increase this next year in line, at least, with inflation. My Department will monitor this element of the programme next year. It is by central and local government working together that we will achieve our goal of a non-national road network that is second to none.
The new rates of motor tax set out in the financial resolution will apply to tax discs and trade licences taken out for periods beginning on or after 1 January 2004. A general increase of 5% is proposed. The new rates for all vehicles are set out in the printed financial resolution and rather than read them all out and take up the limited time we have available, I will highlight for the House a few details of the proposed changes for private cars and goods vehicles which make up 91% of the national fleet. The annual rate increase for the lowest engine size car under 1000cc is €7, an increase of 13 cent a week; for cars in the 1001cc to 1300cc range, the annual increase is between €11 and €13; and for cars in the 1301cc to 1400cc range, the additional annual increase is €14. Some 60% of the national car fleet is made up of cars under 1400cc. Therefore, the extra costs for most motorists will be between €7 and €14 a year, that is between 13 cent and 27 cent a week.
For the remaining cars, the increases will range from €15 for cars not exceeding 1500cc up to €64 for cars over 3001cc. Less than half of 1% of cars in the country are in the 3001cc plus category. For goods vehicles the effect of the 5% increase will vary depending on the size, in weight terms, of the vehicle. Some 85% of vehicles in this category are at the lowest level of charge, meaning they will pay an annual increase of €12 or 23 cent per week. A 5% increase is also proposed for trade licences, or trade plates, as they are known. These are the green registration plates used by motor traders on vehicles temporarily in their possession in lieu of taxing such vehicles. The increase for a pair of trade plates will be €13.
In discussing motor tax, it is important that I update the House on a major e-government project which is currently taking place. A new system which will allow people to tax their cars on-line over the Internet is being piloted in November in three counties – Clare, Galway and north Tipperary. Under this system, people will not have to travel to motor tax offices or to post their documents to the motor tax office. Rather, it will be possible for people to renew their tax at a time and a location that suits them. The on-line facility will be open for business 24 hours a day, seven days a week, 52 weeks a year. I am sure the House will agree that this is a major step forward in using technology to provide a quality service to customers of central and local government. The indications to date are that there is a good level of take-up on the pilot and that the system is sound. All going well, it is hoped that the service will be rolled out nationwide in early 2004.
In conclusion, I am concerned to ensure the viability and well-being of local government and in particular the non-national road programme. The level of increase in motor tax rates is not penal to individual motorists. However, the combined contribution of the increases on a vehicle fleet of about 1.8 million will provide a reasonable amount of additional funding which will facilitate the continued improvement in our non-national road network. It is for this reason that I am proposing to increase rates of motor tax. This financial resolution will cease on the enactment of the relevant Motor Vehicle (Duties and Licences) Bill, which will be presented to the House at the earliest possible date.