I welcome the Bill as Fine Gael supports any measure designed to support Ireland's environmental profile. Fine Gael has been more supportive of our environment than the Green Party has even been. The Green Party's policies have become diluted since it went into Government with the Fianna Fáil Party.
Motor Vehicle (Duties and Licences) (No. 2) Bill 2008: Second Stage (Resumed).
Not if one looks at the Bill. That is the evidence.
When I raised the issue of our national monuments earlier, the Minister for Finance did not know when the national monuments Bill could be taken. The Minister, Deputy Gormley, should be aware that a large number of our national monuments throughout the country are becoming dilapidated. He was in the Chamber when I put the question to the Minister for Finance. It is vital that this Bill be brought forward as soon as possible.
Although appearing under the umbrella of the Department of the Environment, Heritage and Local Government, the Bill is essentially a financial one. It provides a permanent legislative basis for the motor tax increases approved by this House by way of financial resolution on budget day. As a money Bill it is subject to the same time constraints as the Finance Bill.
From an environmental perspective, the Bill contains a technical change to the definition of "CO2 emissions" to bring it into line with the definition in the Finance Acts. This means that all relevant definitions common to motor tax and vehicle registration tax derive from one source and ensures uniformity in both tax systems. Section 5 provides for increased fees for trade plate licences and replacement trade licences.
Fine Gael put down an amendment to the Motor Vehicles (Duties and Licences) Bill earlier this year to apply the new carbon emissions based tax system for all cars registered in the State since 1 May 2004. Instead of this new tax system applying only to new cars registered after 1 July 2008, it would apply to all cars registered since 1 May 2004, with the new tax rate applying at the next annual tax renewal for a car. The Minister did not accept that amendment, which I believe was short-sighted.
According to the Department of the Environment, Heritage and Local Government, new cars registered from 1 July 2008 will, for the purpose of motor tax charges, be assessed on the basis of CO2 emissions level, based on seven CO2 bands. Rates will range from €104 a year for cars with emission rates not exceeding 120 grams per kilometre to €2,100 for those with the highest emissions rating, that is, in excess of 225 grams per kilometre.
To the detriment of the home industry, the new CO2 based system will not apply to second hand imports registered abroad before 2008. Not only is the Government's administration of the CO2 based tax regime weak in that regard, it has also destabilised the second hand car market in Ireland.
The Society of the Irish Motor Industry, SIMI, has pointed out that an environmentally focused scrappage scheme would be an excellent opportunity for the Government, the motor industry and motorists to work together to made a greener choice by encouraging the trade-in of cars over ten years old against a low emissions new car, which would help in the reduction of CO2 emissions. That would have a dual benefit, both environmentally and with regard to kick starting the new car market, and give a much needed boost to consumer confidence.
What action is the Minister taking in terms of United Kingdom and Northern Ireland registered vehicles being driven on Irish roads without VRT or road tax, exempting them from incurring parking fines, speeding fines or penalty points and which are being imported by known dealers who do not possess a correct trader account number, TAN, or are not subject to VAT or TAX payments? Such trade is to the detriment of the native motor industry.
I have the list of vehicles exempted from motor tax liability and while of the 11 categories, nine have legitimacy, the first two cause me concern and puzzlement. Why should State owned and diplomatic vehicles carry such an exemption? I call on the Minister to end that inequitable situation. The onus to encourage the use of smaller, cleaner, fuel efficient cars, which it is hoped will help in the fight against climate change, should be seen to be spearheaded by those in such categories, including the Minister. Before he became Minister I would often see him arriving to Leinster House on a bicycle but recently he is using the car.
I used the bicycle again this morning. The Deputy might talk to his own leader who travels in his Mercedes at taxpayers' expense.
The conflict between ministerial grandeur and Green Party membership is played out in the State car allotment but across the board the exemption of the wealthy and well connected continues.
Budget 2009 also saw the introduction of an air travel tax but it does not apply to executive Government jets. What impact will it have on this Government that such a tax, which is an ill-conceived and knee-jerk measure, will penalise families, affect the regions, result in job losses and force airlines to pull out of Ireland? In case the Minister for Finance is unaware, this tax could force the closure of regional airports and will hit the business community and international connecting passengers. Those using London as a hub for onward travel will be particularly hard-hit.
Any anti-tourism measure at a time when visitor numbers are falling is very much a case of killing the goose that lays the golden egg. Showing a remarkable lack of joined up thinking, the Government on the one hand is introducing an air travel tax and on the other is announcing a marketing campaign, costing €47 million, in an effort to reduce falling visitor numbers.
This Government's legacy will be one of "do as I say, not as I do". We have seen 11 years of a Fianna Fáil Government that believes that all initiatives, be they cost-cutting or reducing our CO2 emissions, are applicable to everyone bar its members. It is incumbent on this Government to ensure all State cars comply with the strictures it is imposing on the rest of our citizens. Maybe the Minister, Deputy Gormley, could take that up. It is not beyond the realms of normal sense that diplomatic cars should also be required to be environmentally friendly.
When will Deputy Bannon's party leader do that? He is chauffeur driven around in his Mercedes.
After all CO2 emissions do not differentiate on grounds of the importance or otherwise of the drivers or passengers. Any time the Minister, Deputy Gormley, uses his bicycle I am told two or three squad cars have to accompany him. What about the emissions caused by those cars?
That is total bull.
I remind Members to address their comments to the Chair. I am protecting Deputy Bannon as much as I can.
I thank the Acting Chairman. I need protection from the withering Green Minister opposite.
I am giving withering looks.
Harsh measures by the Government did not affect State or foreign cars but rather private bus operators who had to comply with an EU directive which removed the excise duty on fuel used by this sector. This was an appalling blow to rural communities which do not have access to regular pubic transport. The Minister, Deputy Gormley, was to address this issue but has failed to do so. This measure has threatened the livelihoods of many bus operators and added to the problem of an already dismal transport situation. It would serve the Government better to provide an efficient, joined-up public transport system to discourage private car dependency and further reduce CO2 emissions.
The rebalancing of car tax is a small step towards fulfilling our obligations on CO2 emissions. However, only the provision of a fully comprehensive transport system including, and highlighting, electric powered vehicles, which will hopefully be more ambitious than the Government's feeble projection of 10% by 2010, will reduce Ireland's spiralling carbon emissions in the transport sector. I would like assurances from the Minister that the full amount generated by the new motor taxation rates will be paid into the local government fund. In his speech the Minister mentioned €40 million. I want to see that going directly to the cash-starved local authorities around the country. Given the cutbacks in local authority funding and the regional infrastructural deficits, particularly in the midlands, such an assurance is imperative. Fine Gael is willing to support any measure designed to improve our environment. This Bill goes some way towards doing that and is to be welcomed in the environmental context.
In the Minister's speech he said local authorities receive income from a range of sources including rates, charges, goods and services. He concentrated two pages of his speech on the local government issue. Under the Minister's watch there have been drastic cutbacks on local authorities around the country. We all know local authorities are an essential element in any democratic state. They are the vehicle through which very important services are provided. Every day we see the services they provide under the various headings, but there have been drastic cutbacks.
The smaller counties in the midlands and west have been badly hit because they do not have the same rate base as the counties on the east coast. The Minister must do something to address this situation. In my county, Longford, the rate base for business is approximately 9% compared to 66% or 67% on the east coast. This is unfair on those smaller local authorities. The Minister has drastically cut back on the local government fund and I am disappointed in him. He must have been a very weak link at the Cabinet table to have allowed that. We all know the aim of local government is to provide for all kinds of development. Local authorities around the country talk to chairmen and managers and they are all cash starved.
The Minister said local government must play its part in the difficult period ahead. Local government has always played its part in the delivery of services and has always been responsible when there was plenty of money and will be responsible in difficult times. I do not want any slur to be cast on local government around the country and the way the authorities deliver their services. It is not an excuse for the Minister to fail to give them adequate funding. He is forcing local authorities around the country to cut services because he was the very weak link at the Cabinet table. He failed to get a fair slice of the cake for local government and I want him to address that.
Of the €40 million extra, will local authorities receive additional funding to provide the services on which there will be a shortfall? There is a serious funding shortfall in local authorities. Services such as public lighting will have to be cut in certain towns and villages throughout our country. There is a major deficit in the roll-out of group water schemes and sewerage schemes etc. If those schemes were put in place they would help the environment. I would appreciate if the Minister would address those situations. Coming from the Green Party there is much annoyance with his performance as Minister for the Environment, Heritage and Local Government.
There has been a 19% increase.
There is a general neglect. Witnesses in several towns in my county have told me the water has been switched off because there is a very poor supply. Some of our water systems are badly contaminated and some of the bottled water that is served up and sold is also contaminated. The Minister has not addressed that. I would appreciate if the Minister would address those issues. Never mind huffing and puffing about what he intends to do; he should do it now.
I would be out of order if I addressed the Visitors Gallery, but if I did I might explain what this tax issue is all about. We have changed from an engine-size based motor taxation system to an emission based system. We will no longer tax the size of the car but the amount of pollution it creates. This is a very positive development by any measure and is significantly welcome. Unfortunately, like that parson's egg, it has good parts and bad parts. We have witnessed a number of significant changes and adaptations to this new form of taxation since it was rolled out by the Minister. On 5 March, when the legislation was in committee, there was an expectation that the Minister would correct some of the obvious anomalies. One major anomaly was that owners of second-hand imported cars would be subject to new emissions linked tax rates while owners of second-hand cars registered in the State would be taxed under the old, more punitive scheme. If cars were imported, there would be a benefit whereas if one owned a second-hand car registered in the State, one would be on a different rate. I had an old school teacher and occasionally we used to ask whether he had any favourites and he replied, "No, I hate ye all equally". The Minister has come up with a similar response and proposed a taxation system under which everybody in the classroom in penalised.
I expected a positive response from him and that he would apply the new regime to all cars, not only to those imported. I presumed people who had made an active, responsible and deliberate choice over the past number of years to purchase an environmentally friendly car would be rewarded for their foresight and vision and for doing something that was neither fashionable nor profitable. Unfortunately, the Minister decided to park that consumer group and applied the maximum motor tax rate to them.
Since the Minister announced this Bill, we have been presented with three different versions, one more contradictory than the other. First, it was proposed that the new rates would come into operation in June 2008 with no retrospection whatsoever. It was then proposed on second thoughts that all low emissions cars registered in 2008 would opt into the new rates but those purchased in 2007 or prior to that would not. As the Bill proceeds through the House, we have been told the benefits and rate system will not be extended to buyers of imported cars. The Minister had to draw a line in the sand at some stage in this process but I cannot understand how a motorist with a low emissions car cannot avail of the either option regime.
The Minister needs to apply himself to another critical issue. When the scheme was rolled out, it threw the motor trade into a state of flux. New cars are usually bought in January and February but because it was proposed to change the motor taxation system, people put off their purchases and that led to a kink in the purchasing calendar for cars and other adjustments. One classification of car has disappeared completely off the highway — the renewable energy-based bio-fuel car. Is this no longer at the core of Green Party policy? The Minister used to raise this issue extensively. Has it been dismissed as an option that will not take priority? Has the Government sought to disincentivise this approach or will it introduce incentives down the line for such cars?
Manufacturers such as Ford, Saab, Opel, Mazda or Toyota are making bio-fuel cars and selling them to customers. It is unfair of the Minister not to tell people who purchased such cars earlier this year where they stand in the context of motor taxation and whether an incentive will be provided down the line. Will the driver of a bioethanol fuelled car be in the same classification as a driver of a petrol car? I acknowledge the emissions are similar and the environmental argument can be made regarding the manufacturing process but a clear answer is required of the Minister in this regard. If one drove between Cork and Dublin, one would be unable to buy a litre of bioethanol. Has the Minister disincentivised the purchase of these cars in the market? Such cars were more widely available 18 months ago. What is the Minister's position on this fuel?
When the Bill was first introduced, it was pointed out that there would be roll-out problems but not ensuring retrospection and a benefit for second-hand buyers is an issue. We have moved on but that issue has not been addressed. An opportunity was presented to set a precedent for other measures down the line.
The revenue raising versus environmental argument is also an issue. Like any taxation system, one must question what are the motivational factors behind it and whether it provides a revenue driven incentive or an environmentally driven incentive. Perhaps it is both but there are difficulties in the case of it being a revenue driven exercise if current sales of cars are to be taken into account. For example, while the principle of taxing cars on the basis of CO2 emissions is sound, there is an economic problem because it is a moving target. According to Department of Finance briefing notes, 64.29% of all cars sold in 2005 produced between 146g and 190g of CO2 per kilometre, 13.73% were in the high pollution category producing more than 190g and only 3.85% were in the low category producing less then 125g. However, this will change. The EU has agreed with car makers to target a reduction in emissions in all new cars to an average of 130g per kilometre by 2012 with the effects of other technologies reducing the overall score to 120g. Cleaner and greener fuels will also play a role and there will be continued pressure to push this figure lower as manufacturing methods improve.
The Minister made great play in his opening contribution about raising €40 million for the local government fund, which is also mentioned in the explanatory memorandum. If emission levels reduce in years to come through car manufacturing design, tax revenue will also reduce as sure as night follows day. The Minister cannot brag that this will be a funding source for local government because it will not be. This comes back to the environmental versus revenue raising argument. If this an environmental measure, it cannot be used as a revenue raising measure. This is not a win-win situation. The intention is to reduce emissions to the lowest level possible and, therefore, the Minister is being disingenuous by making that argument.
Hybrid and low emission cars comprise less than 5% of the existing fleet of cars in Ireland. It is reckoned that within ten years 60% of motorists will drive diesel cars, given the incentive provided in the budget. We will shift from being a petroleum car owning population to a diesel car owning population and emissions will reduce but hybrid cars and so on will come on the market. I welcome what the Minister is doing. It is a philosophical change in culture as well as involving a logical argument that we move the taxation system to a polluter pays principle in the case of car tax. However, this can only be considered as the first phase of this type of taxation and the first phase of dealing with emissions from cars.
To restate the point I made to the Minister earlier, under no circumstances in the long term can this be considered as some sort of concurrent funding project for local government. If it is to be successful, the graph for tax revenue from this year should show a drop of income because more cars with low emissions will be bought, which is as sure as night follows day. The Minister should not come to the House to tell us he will give us €40 million for local government.
While I had not intended speaking about the following point, the Minister raised other issues relating to local government, including the tax raised on non-principal residences. I will leave for another day the issue of how he will explain how he will identify these residences and whether it will be through the register of electors, which is wildly inaccurate. A very comprehensive and well received report from the Select Committee on the Environment, Heritage and Local Government is still lying on the Minister's desk. If it is a case that this will be done through the register of electors, I do not know how it will work and I would be interested to know how the Minister will target those he wishes to contribute to the revenue base.
Deputy Bannon referred to the water table. The manufacturing companies that produce sewerage systems and water treatment systems attended the committee this week. I am not sure whether the Minister was otherwise detained or whether he was able to watch on this monitor the very interesting discussion that took place at the committee. Given what is happening at another committee of the House this morning, and what is happening with regard to the banks and other committees, it was unusual that a business representative organisation representing a whole series of manufacturers in this area came in to the committee screaming to be regulated. Usually, it is the other way around, and when people come before committees, it is the committees which are trying to place regulation upon them. This organisation demanded to be regulated. What was surprising about its request is that all the measures required for these businesses to be regulated have been with the Minister's office for the past four years. While I am not suggesting the Minister created this problem, the answer to it is currently within the Minister's office.
What was most profound about what the representative organisation had to say was that, by its estimation, 50% of sewerage systems in the country are not working because of improper installation and the absence of guidelines for installing such systems. A simple thought struck me on listening to this. If one were building a house in the morning, one would obviously have to install an electricity supply, and if one was using gas for cooking or heating, one would have to install a gas supply. If one has electricity coming into a house, a RECI certificate must be issued. There is grading of the skills certificates for plumbers with regard to who can actually turn on the gas coming into a house. It would not necessarily be any plumber who can set a washing machine because a plumber must have specific certification for dealing with gas plumbing. Yet, it would seem any old Joe the plumber, or perhaps Padraig the plumber, can arrive at a house site with no certification or qualifications, bang in one of these systems and then take off down the road on his rothar and disappear over the horizon.
This is an issue to which a solution is actually on the Minister's desk at present. I do not accuse him of sitting on it because he may not even be aware the information is there, such is the extent of his Department. However, I flag with him that he should go over the report of this week's committee meeting to learn what was presented. On occasion, the Minister invites comments from this side of the House, and these would be helpful to him. The information from this week's committee meeting would be extremely helpful to the Minister if he were to listen to what was said and take action on it. It is an opportunity to do something positive and to deal with an issue that has been nesting in his Department, perhaps unknown to him, for quite a while.
I will conclude by restating my opening points. The Labour Party will be supporting this Bill. We regret that the Minister in conceiving this new legislation ran into so many difficulties with regard to what could have been opportunities, particularly concerning the absence of retrospection and dealing in some sort of equitable manner with people who bought second hand cars prior to the change in the taxation system. However, the Bill is in essence positive. It moves us away from taxation of a motor car on the basis on engine size towards a polluter pays policy. The Labour Party will support the Bill.
I wish to share time with Deputy Johnny Brady.
I appreciate the opportunity to speak on the Bill, which is very important for local authorities, our environment and with regard to CO2 emissions. The Bill is a necessary follow-up to the finance resolution on motor tax rates and trade plate licences which was passed by the House on 5 December 2007. This provided for only limited statutory effect and needs to be replaced by a Bill which provides a permanent legal basis.
The Bill will also provide statutory effect to the new CO2 based motor tax system for new and pre-owned imported cars registered on or after 1 April 2008, which was announced in the carbon budget on 6 December 2007. This new motor tax system compliments the new CO2 based vehicle registration tax, VRT, system provided in the Finance Bill 2008.
The increased revenue arising will be paid into the local government fund and this is a welcome commitment in the Bill. Since 1999, all motor tax receipts, including driving licences and so on, have been paid into the local government fund, which is supplemented by the Exchequer. Having the fund ring-fenced exclusively for local authority purposes is extremely important. The distribution of the fund to local authorities as discretionary grants in respect of day-to-day spending requirements and also as grants in respect of expenditure on our local and regional roads is to be welcomed. From these increases, an estimated €40 million additional revenue will be generated in a full year for spending on our roads.
I welcome the Minister's comment on local authority reform and his commitment to local authorities. We in Kildare have for some time believed we do not receive a sufficiently large grant from this fund relative to our heavily trafficked roads in County Kildare. I ask that the Minister look at the allocation from the fund in a different way from the current system of mileage of public roads, which would bring increased fairness and equity into the system. I could also refer to other counties around Dublin where traffic is far heavier than it is in counties removed from the Dublin area.
Something in my constituency that has come to my attention recently is the number of JCB Fast Track tractors and other similar type vehicles drawing out of farms and sand and gravel pits. They are also found at road building sites and building sites. These vehicles can travel at 50 km/h and I understand the newer ones can do up to 60 km/h. They draw loads of 16 to 23 tonnes and are driven by persons as young as 17 on provisional licences using green diesel which costs approximately 50 cent per litre. I suggest the vehicle tax on this type of vehicle should be increased when they are used for the purposes of drawing loads on public roads and not being used for agricultural purposes.
These vehicles compete with eight wheel, four axle rigid trucks which carry a legal limit of 18 tonnes. These lorries use white diesel which costs approximately €1 per litre and carry motor tax of approximately €2,500. They are driven by mature drivers to keep insurance costs down. The competition is unfair and in the present climate many of the lorries of those who were known in the past as "hackers" are lying idle in their yards. They see this other type of vehicle being used and it is unfair competition.
I want to comment on vehicles which are more than 30 years old. The reduced tax on these vehicles sends a clear signal to vehicle enthusiasts that we appreciate the important work they do in the preservation of old vehicles. I would go further to say that the Government should grant aid communities and individuals who undertake this important preservation work on a range of vehicles, such as agricultural and motor vehicles, on condition that they make them available for public display within their communities and that the preservation work is carried out under the guidance of a recognised restorer.
I welcome the provisions in sections 3 and 4 for amendments to the Finance (Excise Duties) (Vehicles) Act 1952 in particular on the definition of "CO2 emissions" which will be applied directly to the finance law on the new vehicle registration tax system. This means all relevant definitions common to the new motor tax and VRT systems are derived from the same source and ensures uniformity in both tax systems.
Our countryside has a good range of petrol and diesel filling stations and shops for all types of commodities. However, the time has come to encourage a nationwide system whereby people driving battery operated vehicles can pull in, change the battery and move on. During yesterday's debate we were told a battery could bring us from Dublin to Galway. Where would one go to recharge the battery? One would have to pull in and spend five hours recharging it.
One could come here and go to the Dáil bar.
On the Continent, a driver of a battery operated vehicle can pull in and recharge it in a matter of a few minutes or have it replaced and move on. I welcome the focus in this Bill on the environment and CO2 emissions. It is important that we highlight these issues at this time.
In our capital city of Dublin we have a large public transport fleet along with other transport fleets. I do not hear a word from any of these large fleet operators on their commitment to reducing CO2 emissions. They should be called before Oireachtas committees to discuss this issue to see how working together we can encourage large fleet owners, in particular the large bus transport operators, to reduce their CO2emissions.
With regard to privately owned vehicles, where families have more than one vehicle we should try to encourage them to have a battery operated vehicle as their second or third car. These vehicles are used for short runs such as going to school, the church or shopping. It would be a start in achieving our objective if we could encourage families to have at least one of their vehicles battery operated.
I welcome the ring-fencing of the funds for local authorities. I hope we can encourage local authorities to ensure proper supervision of public funds and to get the best possible value for all the money spent, particularly with regard to road maintenance and road improvements.
In recent years, County Kildare has seen high-quality motorways going through the county and linking our major towns. We also have high-quality maintenance of our minor roads. The Government has made a commitment to local authorities to ensure adequate funding is provided. However, local authorities never have enough and I hope that when this little recession has passed we can continue to upgrade our roads as we have done in the past.
The Bill we are debating provides a permanent legislative basis for the motor tax increases approved by the Dáil on budget day. The Financial Resolutions provide for increases of 4% for cars below 2.5 litres and CO2 bands A to D and 5% for cars above the 2.5 litre threshold and CO2 bands E, F and G. A 4% increase also applies to goods and other vehicles, with no increase for electric vehicles. Trade plate licences will also increase by 4%. The new rates will apply to motor tax discs and trade licences taken out for periods beginning on or after 1 January 2009. It has been estimated that the increases will generate additional revenue of approximately €40 million in a full year.
This Bill also provides statutory effect to the new CO2 based motor tax system for new and pre-owned imported cars registered on or after 1 July 2008, which the Minister announced in his carbon budget of December last year. This new motor tax system complements the new CO2 based vehicle registration tax system provided in the Finance Bill 2008.
The increased revenue that will result from this Bill will be paid into the local government fund, a point which is important to note. Since the establishment of the local government fund in January 1999, all motor tax receipts are paid into the fund. In addition to the proceeds of motor taxation, the fund is also supplemented by an Exchequer contribution. The fund is ring fenced exclusively for local authority purposes and is distributed to local authorities as discretionary grants in respect of day-to-day spending requirements, and also as grants in respect of expenditure on local and regional roads.
I read in the Minister's speech that in total local authorities will spend €11.7 billion on capital and current expenditure in 2009. A total of €1.6 billion will be available for allocation via the local government fund for general purpose grants. I would like to comment on a point made by my colleague, Deputy Fitzpatrick. There are many major routes and motorways under construction. Many older roads are being downgraded from national primary and national secondary routes to regional roads. This will cost local authorities a great deal of money. I am pleased that the Minister of State at the Department of Transport, Deputy Noel Ahern, is in the House and that my constituency colleague, Deputy Noel Dempsey, is the Minister for Transport and I compliment them on their great work to date.
It is pleasing to see great roads under construction. Let us consider the M1 motorway which is being upgraded at great cost. Next year we will hopefully see the opening of the famous M3 motorway, about which we have all read and heard over many years. I thank God for the people of Kells and those in the entire north County Meath area, including Navan, Dunshaughlin and stretching up to counties Cavan and Fermanagh and Donegal all of whom may avail of this road when it is completed. I am conscious of how the people and traders of my town have suffered through the years because of the through traffic. Not only is there traffic passing through Kells coming from Cavan, Donegal and the North, but the N52 route also passes through the town, which brings heavy traffic from the North to the south and west. I thank the Minister, Deputy Dempsey, for ensuring the completion of the N52 bypass of the town of Kells.
My colleague referred to public transport and we are very lucky to have such a great public transport service from the town of Kells to Dublin. There are buses leaving the town for Dublin from 6 a.m. every 15 minutes until 9 a.m. and the reverse is the case in the evenings. I believe there are similar services in all such towns, and my friend from County Louth, Deputy Fergus O'Dowd, may confirm that the same is happening in Drogheda and other areas. It is satisfying to see all of these achievements.
The Bill provides for new rates of motor tax and fees for trade plates. It takes account of changes to the various taxation classes and provides coherence for the definition of carbon dioxide emissions. This week European Union governments moved closer towards a deal on cutting greenhouse gas emissions from cars. The planned legislation must strike the right balance between environmental concerns and the needs of the car industry, which has been hit hard by a global economic downturn. In my town and throughout the county many jobs have been lost in that sector. A significant number of people have been employed in this sector over many years and unfortunately many are now losing their jobs because of the downturn in the economy.
Ambassadors of the European Union's 27 governments agreed to cut average carbon dioxide emissions from new cars by approximately 18% to 130g per kilometre, beginning from 2012. This would reduce auto manufacturers' output and there will be full compliance in place by 2015. There was agreement on a phased-in approach to cut carbon dioxide emissions. However, some countries wanted a higher initial level and others a lower initial level. EU envoys failed to agree on fines for companies exceeding the allowed emissions. Any deal needs to be backed by the parliament before becoming law. Governments agreed in principle on an ambitious goal to slash carbon dioxide emissions from cars to 95g per kilometre by 2020. I understand that some small car makers might be temporarily exempted from general rules under the deal.
I welcome the labelling system showing consumers how much vehicle registration tax, VRT, and motor tax they will pay on new cars. Any initiative to encourage motorists to purchase cars with lower carbon dioxide emissions is to be welcomed. The aim of the changes to VRT and motor tax is to persuade consumers to purchase cars with lower carbon emissions. As part of the strategy, seven bands of emissions were created, which have determined the amount of tax the purchaser of a new car should pay as of 1 July last. If one buys a car in the first low emissions category, motor tax is €100. However, if one buys a heavy fuel use car in band seven, one can expect to spend €2,000 each year. This is a sizable difference and it should encourage purchasing of greener vehicles. I am pleased to say that the system has been introduced with the active co-operation of the motor industry.
This is all part of a larger picture to combat global warming. Global warming has become one of the major topics on the global political agenda. If we do not take action, climate change will cause increasingly costly damage and disrupt the functioning of the natural environment, with knock-on effects for the supply of food, water, raw materials and other vital resources. In Ireland, for example, the Environmental Protection Agency predicts that up to 300 square km of Irish coastal land could be inundated with water, with densely populated areas such as parts of Dublin, Cork, Limerick and Galway all vulnerable.
Wealthy countries such as Ireland and its EU partners will find it very difficult to cope with the economic costs of climate change. However, more severe problems will be faced by developing countries. Global warming has the potential to cause massive upheaval and humanitarian disasters in poorer parts of the world. The Bill is a small but significant element in the battle against climate change. I support it, and believe that it emphasises how we all have a part to play in improving our environment.
This is a very important debate. The comments of the speakers on the Government benches, including the remarks of the Minister, referred to climate change and how it will affect the future of society. Although the Bill is under the auspices of the Government and the Department of the Environment, Heritage and Local Government we must re-examine the way Departments are organised. There should be more joined-up thinking between the Department of the Environment, Heritage and Local Government and the Department of Transport. Perhaps there should be a new Department of the environment, transport and climate change. We should bring all of these policies together. I recognise that the energy sector is a part of the equation as well.
As Deputy Brady remarked, the future of the world is, effectively, the future of our climate. The manner in which people live in future critically depends on the level of greenhouse gas emissions throughout the world and especially in Ireland. In Ireland, we are paying a very high price in human, environmental and economic terms for the ineffective and failed Government policies on transport, emissions and climate change. As a result, hundreds of thousand of Irish families now have a much poorer quality of life and must endure a longer commute to work, which adversely affects every facet of family life. The national economy is also affected. We have become less competitive because people cannot work as effectively or as quickly as previously and the working day is very long.
Some ten or 12 years ago when I first became a Member of the Oireachtas I could travel from Drogheda to the House in one hour, keeping within the speed limits and leaving at 8 a.m. Now one must rise at 6 a.m. to arrive here for 7.30 a.m. The queues along the M1 are becoming longer earlier, and the traffic is slower. The average person travelling from the north of the country to Dublin airport may find delays of up to 20 minutes in queues as they approach the airport from the northern side. The road transport network is not working effectively or efficiently because too many people are travelling by car. Mums and dads cannot spend quality time with their children because by the time they get home from work in the evening their children are long asleep in bed. Our quality of life is very poor as a result of the way in which we live.
I refer specifically to transport-related greenhouse gas emissions, which is dealt with in this Bill by taxing cars that emit higher levels of CO2. What is the Fianna Fáil record on that, and indeed that of the Green Party? Since 1990 our transport-related greenhouse gas emissions have gone up by 178%, an absolutely staggering figure. Of these emissions, 97% come from private cars and goods vehicles as a result of the trend towards buying larger vehicles. I have been reading some research in the UK and the USA that shows that commuter traffic with single-occupancy vehicles does the most damage in this regard. Unfortunately, the wealthier society becomes, the bigger the cars we want to drive. One indication of that is the number of SUVs driving on urban motorways, cars which are eminently unsuitable for the transport needs and infrastructure of urban areas. I welcome the fact the Minister is rebalancing the tax provisions for SUVs, so that people who drive vehicles that are totally unnecessary for modern transport needs, particularly in an urban environment, pay the price. Maybe they should be paying an even higher price. I am talking about vehicles with inefficient engines, which pollute the most.
The number of people who use cars driving to work has increased by more than 80%. In 1996, there were 600,000 people driving to work; there are more than 1 million today. Another problem is that the number of primary school children who are being driven to school has increased by more than 47% in the same period. The sad fact is that a report last week showed that the number of commuters using public transport, specifically buses, to Dublin city centre has decreased over the past year and that 50% of commuters still choose to drive to work. The key to solving the problem of poor quality of life in the transport arena and in modern cities is to get people out of their cars, thereby reducing carbon dioxide emissions. We should use the taxation system, as is now becoming the policy, to encourage people to buy cars that emit less. Taxing people who drive inefficient cars is also an environmentally constructive policy.
What the Government is lacking in its policy, however, is encouragement for people to walk, cycle, use public transport and share cars much more than we currently do. We must fundamentally change how our cities and town centres are designed and built, and we must also insist that top priority be given to pedestrians and public transport. There is a tyranny in our urban town centres. I am not talking about the tyranny of the Fianna Fáil Government, despite the feelings of many people about the 17 extra taxes imposed in the recent budget. It was the gabelle, the salt tax, that brought about the French revolution, but I do not know which of the 17 will be the gabelle. I am talking about a different tyranny — the tyranny of the motor car in our urban areas. To deal with this, we need more joined up thinking in the transport, environment and planning sectors. We need to plan to get cars out of our cities and towns. I was in San Francisco some years ago. There is a much better public transport system there than here, but the key principle in terms of planning was that no new shop or business could get planning permission for parking spaces. No parking spaces were allowed. One had to give one’s contribution to public transport. We need to consider this here and to plan our cities and towns so that pedestrians are at the centre of those areas.
The European Charter of Pedestrian Rights, which was adopted as long ago as 1988, states: "The pedestrian has the right to live in urban or village centres tailored to the needs of human beings and not to the needs of the motor car and to have amenities within walking or cycling distance." Our society has gone the other way. If we could, we would bring our cars right into the supermarket. We would never get out of them. We would even sleep in them in some cases.
We already do.
We probably do. It is a total tyranny. We must change the way we think, and to do this we need to have radical new policies.
Improving the energy efficiency of new vehicles must be our top priority. We must regularly test all vehicles and their components for efficiency, considering things such as tyres, alternators, lights and electrical systems. I read recently that research in America found that if people did not drive the way they currently drive, which is often aggressively, they would save up to 33% on fuel. By aggressive driving I mean driving fast, braking sharply and driving without due care and attention. We need to change the way we think about driving. There is a need for the Government to consider more efficient, more effective driving. Information on how to reduce one's CO2 emissions, conserve energy and drive more safely and efficiently should be part of the rules of the road and part of the school curriculum.
I welcome the Government's proposals for electrical vehicles announced yesterday. The targets are pretty low — we are talking about 10% of vehicles being electric within a certain number of years. Fine Gael policy is very clear in this regard. We would like to see a much bigger commitment — a more focused change, particularly moving towards cars that use electricity to charge — and the provision of proper and efficient locations for car charging throughout the country. That is the way forward. We should increase vehicle fuel efficiency standards by regularly testing the fuel efficiency of HGVs. This is very important. I do not think we test our HGVs enough. We must promote and support the use of new fuels such as bio-diesel, bioethanol and hydrogen. To take some of these HGVs off the road, we should be promoting rail freight. Recently the Joint Committee on Transport met with the Irish Exporters Association and its representatives made the case for a new policy to encourage rail freight. This could perhaps be considered again in the Department of Transport.
Of all the people driving in the morning between 7 o'clock and 9 o'clock, if we could take out all the people who are bringing their children to school, this would have an important effect in reducing the total volume of traffic. We need to have as many as possible of those children out of their cars and walking to school, perhaps in a walking bus. I commend An Taisce for its constructive proposals and the green schools programme. The second module of this deals with transport. This is receiving Government support, but not enough. We need to tackle that again. We ought to consider rewarding schools that have a transport plan. Perhaps the Minister for Education and Science would consider this. Many schools in urban areas, including the school I taught in years ago, have more than 1,200 students, a significant number of whom arrive by bus but also many by car. I am not necessarily talking about a cash reward. I do not think one would pass a primary school in the country that did not have a green flag outside. There could be an award for the school with the best transport plan in every county.
In addition, we need true local government on the ground. The Government is talking about funding local Government. I believe strongly that each local authority should have a person who is skilled and knowledgeable in the areas of climate change, transport policy and so on, who would have a proactive role of advice and assistance in the community. He or she would go to schools and ask the principals and teachers about their transport plan and how they can reduce emissions, or to factories and ask about their transport plans, although, regrettably, more and more people are losing their jobs. He or she could constructively consider hospitals, State and semi-state bodies and drive the agenda for change locally. A big part of the agenda for change is missing. We have all read research papers and national policy documents. Nobody is driving that policy at local level. No one has been given responsibility for developing links between those ideas and local communities on the ground. I accept that there are energy committees in counties Tipperary, Limerick and Clare. A good regional climate change policy has been agreed in counties Clare and Limerick. That is the sort of thinking we need. It is not evident at present. It would make a big difference.
I wish to speak about the need to get people out of their cars and into public transport. One of the big problems in Dublin city is that people do not have enough choice. If they are unable to avail of bus services, they have no choice other than to travel in their cars. One of the strategies outlined in the Finance Bill involved the introduction of a car parking levy. It might not sound like much to be required to pay an annual fee of €200 to park one's car at one's place of work. Many people who travel to Dublin from rural areas each day do not have the option of using public transport. Dublin does not have strategically placed "park and ride" facilities. Such facilities, each of which should be capable of accommodating between 2,000 and 3,000 cars, need to be developed on the approach roads to the city of Dublin in counties Wicklow, Kildare, Meath and Louth. Commuters from such areas should be able to park their cars in "park and ride" facilities and continue their journeys to Dublin on public transport. The Joint Committee on Transport has discussed this issue with the county managers of the counties in question. They will get back to the committee with a plan. The Government should have ensured that people had option of using a "park and ride" public transport service before it introduced the new €200 levy. That would have made an important contribution to achieving this country's goal of reducing carbon dioxide emissions.
Fine Gael believes that the bus market should be much more open. Consumers do not care what colour buses are as long as they come on time. The Government's present policies make it a prisoner of Dublin Bus and the unions. The bus market has not been opened up in a constructive manner, as promised over the past ten or 15 years by successive transport Ministers in Fianna Fáil-led Administrations. In fairness to the late Séamus Brennan, he tried to open 25% of the bus market to competition. His successor, the Minister, Deputy Cullen, reduced that percentage, however. The current Minister for Transport, Deputy Dempsey, has said he will do something but he has not introduced legislation to that end. The Government has not shown any commitment to increasing the availability of buses, particularly private enterprise buses. I do not suggest that private buses should compete on the same routes as public buses. Private bus companies should be able to tender to operate new bus routes and existing bus routes. They should be allowed to put buses on the road, compete and provide choice to consumers. The sad fact is that private buses that were operating from Lucan and nearby places in County Kildare are now off the road. They are literally not on the road any more. They are of no use because Government policy has led to them being wrapped up in cellophane.
The Minister for Transport should be actively encouraging the private sector to talk to Dublin Bus. Many more consumers, passengers and commuters could be served if the public and private sectors were to work together. They do not appear to be bridging the gap that exists. When I discussed this issue with the chief executive of Dublin Bus recently, he more or less said that it is a matter for the Dublin Transport Authority. I do not think that is good enough. A sea change in thinking is needed at leadership level in Dublin Bus and, to a lesser extent, Bus Éireann. There seems to be an absolute block on the equal and fair opening of the market. If that were to be resolved, the people would be given much more choice.
I would like to highlight the issue of transport planning. If we had planned this country properly, workers would not have to commute such long distances. Some people come to the city of Dublin each day from Portlaoise and Wexford. The Leas-Cheann Comhairle has a role to play in that regard. We need to plan much better. There needs to be a link between our spatial strategy planning and our transport needs. That is not happening at the moment. People are not living where the national spatial strategy says they should be living. They are all living on the east coast. More and more people are living in the communities that surround the city of Dublin. That is placing increasing stress on the transport infrastructure there. They are not going to go away. They will continue to live there. We have to plan for the people who are living in such towns. A fundamental change is needed in the spatial strategy. We need to re-examine where people are actually living. I refer to places like the North-South corridor. There has been a phenomenal growth in the population of that area. While the national spatial strategy contains some good ideas, it is not working. A radical re-evaluation of the strategy is needed. Fine Gael intends to consider that issue.
The moneys that will accrue from the changes being made in this legislation will be added to the local government fund. The absence of elected members of local authorities from the Dáil and the Seanad is having a negative effect. The expertise we used to have is no longer available to us. We need to reconsider how local government budgets are approved and how chief executives are appointed. I respect all the county managers and officials in the system. There is no cross-fertilisation of ideas. We need to attract more business people to get involved in local government at senior level, perhaps on two-year or three-year contracts. If they get involved, they will be able to tell us how they would change the system to make it more efficient. Business people need to be involved in the initial stages of drawing up budgets, especially as it is the business community that will have to meet the expense associated with the increases that are being imposed, regrettably, by some local authorities. Their expertise is crucial because they will pay the price, in effect, at the end of the day.
I wish to share time with Deputy Browne.
This Bill is another element in the process of encouraging innovation in the use of motor vehicles. We are increasingly aware of the effect of car use on the environment. In that context, the launch of the new vehicle labelling system last June was a welcome development. The changes that were made to the vehicle registration tax and annual motor tax regimes for new cars registered on or after 1 July 2008 will lead to a reduction in this country's vehicle emission levels. The decision to calculate tax levels on the basis of carbon dioxide emissions from vehicles, rather than on the basis of engine size, was made to emphasise the importance of the environmental effects of emissions from cars. Innovation is crucial if we are to deal with this issue. Seven emission tax bands have been created. The level of vehicle registration tax and motor tax payable is determined by the relevant band for each vehicle. The introduction of a new labelling system, which is designed to reflect the seven emission tax bands, is a key element of the process of balancing the vehicle registration tax and motor tax regimes on the basis of carbon dioxide emissions. This progressive policy is in line with everyone's wish to have a cleaner and greener Ireland.
The purpose of these changes is to incentivise consumers to purchase vehicles with lower carbon dioxide emissions. This is an important step in reducing national greenhouse gas emissions and meeting Ireland's commitments under the Kyoto Protocol. The clear objective of the new carbon dioxide-based tax structure for cars is to influence the purchasing decisions of consumers by rewarding the buyers of low-emitting cars and charging a premium on less efficient vehicles. It makes sense and will have long-term positive effects for generations to come.
Motorists buying a new car can now make a positive choice on investment and environmental grounds by purchasing a low-emitting vehicle. As well as enjoying the benefits of a lower rate of motor tax and any saving on the pre-July purchase price of the car, they will be making a positive personal contribution to the national response to climate change. Anyone who makes the choice to purchase a high-emitting car, on the other hand, will have to pay a higher rate of motor tax, in addition to any price rise as a result of the VRT changes.
In 1999, an EU directive introduced labelling for all new vehicles, including specific requirements to provide consumers with information on fuel economy and CO2 emissions. Our new system, introduced in July, will strengthen these existing EU requirements. The new labelling system is consumer-friendly, making it easier for users to engage with the process. The seven colour coded bands are familiar to consumers from the energy label for certain electrical goods, such as fridges, washing machines, electric cookers and light bulbs. The intention is to assist buyers in evaluating the environmental impacts of different cars, as well as providing guidance for them on purchase and running costs. Improvements in vehicle labelling are a positive step in enabling Irish motorists to make a direct personal contribution to combating climate change. We all have a part to play in securing a more environmentally friendly future for those who come after us. This Bill plays a part in doing that, and is a welcome development.
I take this opportunity to acknowledge the improvements to national primary roads throughout the State. The N4, for example, is significantly improved, although much work remains to be done. I understand the Minister is currently reviewing plans to upgrade the stretch between Castlepollard and Kilcooley. There have also been major improvements to the N16 and N17, providing links between the south, west and north west. I look forward to further improvements on these routes.
I acknowledge also the contribution of Iarnród Éireann in regard to the improved rail service between Dublin and Sligo, with the provision of eight trains per day in both directions. This is a welcome and popular development which is being availed of by significant numbers of commuters. One can now get to Dublin from Sligo for 9.10 a.m, with the last train returning to Sligo at 7.30 p.m. or 8 p.m. This is an important contribution to reducing the number of people obliged to travel by car from the north west for hospital appointments and so on. It is an encouraging development.
I welcome the Bill. I am confident it will have positive effects for the future, particularly for the next generation.
I thank Deputy Scanlon for sharing time with me. The primary purpose of the Bill is to give legislative effect to the increases in motor tax rates and trade plate licences contained in the financial resolution on motor tax passed in the recent budget. It provides for increases in motor taxes of 4% for cars below 2.5 litres and CO2 bands A to D, inclusive, and 5% for cars above 2.5 litres and CO2 bands E to G, inclusive. The increase in motor tax rates must be viewed against a background where all such increases since 2000, including the current increases, are below the inflation rate for the intervening eight years.
The most important aspect of the Bill is that it will increase substantially the amount of funding that will go to local authorities in 2009. The Minister estimates it will raise an additional €40 million for the local government fund next year. This fund is of great importance for local authorities throughout the State. Successive Governments have been engaged in an effort to ensure that local authorities have a reasonable amount of funding. As a former member of Wexford County Council, I always argued that there was insufficient funding for local authorities. Perhaps more powers should be granted to members to raise additional funding, although they may not want such powers. It is an issue that should be considered in the future.
In total, local authorities will spend some €11.7 billion on capital and current expenditure in 2009. It is important that they get value for money. From talking to the county manager and engineers in Wexford, it seems that quotations being submitted under the tendering system have decreased substantially due to the decline in residential construction throughout the State. We must ensure that we obtain better value for money in the future in regard to the construction of roads, local authority housing and so on. Local authorities must negotiate with builders and developers to ensure there is a substantial decrease in the prices submitted for tender.
Local authorities must prioritise their spending in 2009. Business people, particularly owners of small businesses, are anxious that rates should not be increased in a substantial way in the coming year. One local authority in Dublin has already implemented an increase of 3.5%, leading to uproar among business owners. Given the economic climate in which they are operating, business people consider the rates to be far too high. I urge local authority members throughout the State to reflect seriously before increasing rates in any substantial way.
Local authorities should have a greater input into efforts to encourage road safety. Last week, I attended Wexford County Council's environmental awards, which recognise the efforts of school and community groups working in partnership with the local authority. There should be greater co-operation between local authorities, schools, the Garda, ambulance service, fire service and local authority road engineers to raise awareness of road safety among young people. By the end of the year, some 300 people will have been killed on the roads in 2008. My daughter died in a road accident some years ago and I would not wish that to be visited on any family. The Department of Transport and the Road Safety Authority, under the chairmanship of Gay Byrne, are very active in promoting road safety, but there is a need also for awareness-raising at a local level. The Minister should encourage local authorities to work in partnership with communities and schools in conveying to young people the dangers of driving too fast, driving after consuming alcohol and so on.
The Leas-Cheann Comhairle and I travel on the N11 on a regular basis. Several black spots and bottlenecks remain on that route, including the section near Jack White's in Wicklow. The Enniscorthy and New Ross bypasses remain to be completed. I hope these projects will be undertaken without delay via public private partnerships and that they will not be affected by budgetary cutbacks. Wexford is a gateway to Rosslare and on to Europe and we need a top class road network. I ask both the Minister for Transport and the Minister for the Environment, Heritage and Local Government to ensure these projects proceed without delay.
As Deputy O'Dowd observed, motor cars have largely taken over our lives. I see this in my town where inadequate parking facilities at schools have become a serious problem. No young person is asked to walk to school anymore. Even though families may be living a couple of hundred yards away from St. Aidan's national school, St. Senan's national school or the three secondary schools in Enniscorthy, parents still have to drive their children to the school. This is causing mayhem for our schools and for people who have to travel longer distances. Cars are being abandoned and I have serious concerns about the safety of children. Local authorities and town councils are working in conjunction with schools to try to alleviate this problem. It would do no harm if young people living nearby walked to schools with their friends. There was great camaraderie and fun walking to school in my day, when we had to walk three miles to Marshalstown national school. The issue needs to be addressed quickly.
The Minister spoke about funding for local authorities and value for money. In County Wexford, we have serious problems with coastal erosion. Perhaps the Government will not be in position to tackle this on its own due to the high costs involved. Figures for Wexford provided a few years ago suggested that it would cost about €200 million to deal with the coastal erosion problems in the county. There is a need for specifically allocated funding from Europe, along with funds from the Government, to ensure that we can deal with coastal erosion. Acres of land are being lost, even in tourism centres like Rosslare, Courtown, Curracloe, Kilmuckeridge and Blackwater, so tourism is also affected. There is a need for adequate funding and for Europe to recognise there is a problem in certain countries with coastal erosion.
In our county, soft sand banks are eroded by wind, rain and heavy floods. There is a need to deal with that. We have tried several times to seek special allocations directly from Europe into the county, but this has not happened. I understand that responsibility for coastal erosion has been transferred to the Minister of State with responsibility for the OPW. We should have a partnership arrangement with Brussels to ensure that this issue can be adequately dealt with. There is a mixed view about coastal erosion. Some people say it is cheaper to let eroding coastline fall into the sea than to deal with it, but landowners with property along the coastline do not want to see that. We need a proper coastal protection policy.
The Government announced in the budget that it will introduced a €200 charge for holidays homes. In Wexford, we have hundreds of holiday homes. We are taken over by Dublin during the summer as the population increases by practically another county. When we were arguing for the retention of the hospital in Wexford, we always maintained that the county population increased by 40,000 in the summer months, with people staying in their second homes for the period. I have a problem with the way the Government is dealing with the holiday home situation. I am a firm believer that moneys collected in Wexford for our holiday homes should be allocated to local authorities, and not into a central fund. The county provides the water, the sewerage, the roads and all of the other services for the holiday homes in our county. I cannot understand why we should have to suffer while the money goes into a central fund and is redistributed to counties that have no coast and fewer holiday homes. We have gone out of our way to welcome these people, to give them planning permission to build their houses and to allow developers make money building them. All services are provided in difficult times by Wexford County Council to ensure that people in towns along our coastline could buy holiday homes. If Wexford County Council was allowed to keep the €200 charge per holiday home, it would have a substantial budget that would allow it to run the authority properly. The Minister should think again about this.
I welcome the announcement by the Minister for Transport and the Minister for Communications, Energy and Natural Resources of a project on electric cars. Oil stocks are dwindling and prices can be high at times. They have fallen recently due to the volatile situation, but oil prices could increase dramatically again. The pilot project is worth €1 million and is managed by Sustainable Energy Ireland. It will be used for retail, research, development and the demonstration of electric vehicles nationally. That is a welcome initiative and I would like to see progress on it as quickly as possible.
I generally welcome the Bill. However, I have some concerns. The Minister mentioned holiday homes in his speech, and I am asking him to think again and let each county spend the money where it is collected.
I also welcome the Bill and I support any measure designed to improve our environment. The Bill goes a long way towards addressing that. The purpose of the Bill is to provide a permanent legislative basis for motor tax increases, effective from 1 February 2008 and under a financial resolution passed by the Dáil on 5 December 2007, and to provide for a new motor tax system based on CO2 emissions for new and pre-owned imported cars registered after 1 July 2008. I welcome the Bill because Fine Gael proposed similar measures in its 2007 election manifesto, when we promised to reform VRT. I am pleased the Government has taken this on board.
I owned a 2001 registered Audi A6, even though I was always one of those who thought cars were a waste of money. However, I was doing 40,000 miles a year driving around the country in this car, and it cost me about €10,000 every year to fill it with petrol. I was spending €70 on petrol about three times a week, so it was expensive. I have since bought an Audi A4 diesel car, which only cost €150 in tax and it costs me less than €5,000 to run every year. I am pleasantly surprised at that, but I am also delighted that I am doing something to help the environment. It is a comfortable vehicle. The cost of running a car is less of an issue now that oil prices are falling. What I save on petrol prices covers my monthly repayments for the car.
I would like to be able to go without a car, but I live three miles from the nearest town and driving to Dublin is welcome, as I can use the phone in the car.
Today, for example, I might have to go to two or three funerals or meetings around the country. Sometimes using public transport, although I love to do so, can be less than convenient, especially in rural counties like Roscommon, where there are no direct links with the county town, although there are direct links with Dublin. I welcome what Deputy Scanlon said regarding the eight trains per day running between Dublin and Sligo. If the Government invests in the public transport system, people will use it.
I am very upset about the new €10 airport tax. Knock Airport is 25 minutes from my house and I like to use and support that airport whenever I can. If one takes a flight from Knock Airport to any destination, one pays a departure tax of €10. This is a tax that is unique to Knock and the money raised is used to improve the infrastructure at the airport. A development programme costing €2 million is under way there at present. Using the airport at Knock means I do not have to drive to Dublin, use the M50 or pay the exorbitant parking charges at Dublin Airport. In general, people support the €10 departure tax and do not mind paying it. Indeed, it has been in place for many years. However, the new airport tax is anti-west of Ireland and anti-seaboard airports. The Government must roll back on this ill-conceived tax.
I took a flight from Knock to Manchester a number of weeks ago to attend a function organised by the Manchester Roscommon London Association. I left in the evening and returned the following morning. Under the new tax regime, if I chose to fly from Dublin Airport, I would have paid €8 less. Two weeks ago I flew from Knock to London to attend a function organised by the London Roscommon Association. Again, I travelled over in the evening, attended the function and flew back the following morning. Under the new airport tax regime, the flight from Knock will cost €8 more than from Dublin, on top of the €10 departure tax one already pays.at Knock. Under the new system, there is no incentive to support regional airports.
The regional airports have some of the best management teams in the country. This is true of Sligo, Galway and particularly Knock. Ireland West Airport has probably the best management team in the country. It has worked against stiff opposition to bring the airport up to a level of which people in the west can be proud. I ask the Minister of State to relay to the Government that the new airport tax should be reversed. It is anti-west of Ireland and anti-rural.
I am my party's spokesperson on school transport in the Dáil. Last March, school transport for a junior cycle student cost €99 per year. Following the budget, however, there are three different charges and the same transport will now cost €300, which is an increase of 203%. When I asked the Minister if there would be a cap on that amount, he could not guarantee it. While I appreciate that school transport is difficult and expensive to provide, the new charges are exorbitant. An increase of 203% in 30 weeks is over the top. It is anti-family, anti-rural and possibly anti-environment.
Let us take the example of the parents of two school-going children living over three miles from the nearest school. Instead of paying €198 per year for school transport, they will now have to pay €600. If there are children living next door, the chances are that the parents in both families will opt to take turns to drive the children to school in their cars or SUVs. The increase in the price of school transport may lead to more car journeys. Was this change properly thought out? The Green Party, in particular, should examine this anomaly. I have no doubt that many parents will not spend €600 or more on school transport every year. Instead, they will choose to drive their children to school, thus increasing traffic on the roads.
In planning new housing estates in urban areas, local authorities should ensure that it will be possible for young children to walk or cycle to school. Many schools are becoming more aware of transport issues and organise events such as no car days to encourage pupils to walk to school. Those types of initiatives should be encouraged.
In the past, school transport operators received a rebate, worth up to €30 million per year. However, the rebate system fell foul of EU legislation and was discontinued. The Government said that it would put an alternative mechanism in place. However, after 18 months we found out that the Government had no intention of replacing the rebate with any other system. Many school transport operators had been factoring in the rebate when submitting tenders to Bus Éireann. The operators felt very aggrieved and let down. The cost of petrol and diesel has dropped in recent times, which is welcome but that may only be a temporary situation. If fuel costs rise again, the operators will not be able to fall back on a rebate. If the money is not available, that is fine, but the operators should be told that clearly. The Government should not be pointing the finger at the EU and blaming it for the problem. Nor should it be promising to put an alternative mechanism in place when it has no intention of doing so. School bus operators are rightly very aggrieved with the measure and the misinformation surrounding it.
Reference has been made to the new car parking tax, which I believe will apply to Leinster House. If I choose to drive from Roscommon to Dublin, there are no park and ride facilities on the N4 that I could use. There is nowhere on the outskirts of Dublin that I could park my car, take a bus to the city centre, conduct my business, take another bus back to my car and drive home.
The tax is set at €200 per year. I remember several years ago there was a furore when the chief executive of Ryanair, Mr. Michael O'Leary, announced that he had bought a taxi plate to allow him to drive in bus lanes. Taxi plates cost between €3,000 and €5,000. What is there to stop other people buying such plates in order to be able to use bus lanes and avoid paying the car parking tax? I do not know if taxis will be exempt from the parking tax. If taxis are exempt from the parking tax, then people could save €200 per year by buying a plate.
Much more thought must be put into the car parking tax. I hope it will not penalise unduly those who must use car parking spaces. I have no problem with paying €200 per year for a car parking space if necessary but I would like to see other measures put in place that would allow me to use public transport if I so wished. It may turn out to be cheaper for me and others like me to buy a taxi plate. I might even pick up the odd fare or two.
Last week, I drove to Wexford. The people of Wexford gave me a warm welcome and I had a very pleasant trip.
I would expect nothing less.
I always find Wexford to be warmer than Roscommon.
I left Boyle, which is on the N4 and drove through Athlone, Tullamore, Portlaoise and on into Enniscorthy. On the way home I decided I would use the N11 and the M50. Despite the fact that the latter route is up to 50 miles longer, the return trip was 50 minutes shorter. A community without a motorway or a dual carriageway is being discriminated against. There are motorways from Dublin to Belfast and Dublin to Galway but a swathe of the north west still has single carriageway roads. The new Roosky by-pass is a single carriageway with two lanes each way which is effective. At least it is safe for overtaking and it is good value for money. I compliment Leitrim County Council and the NRA for constructing the road. In the same area there is a 12-mile single carriageway which was only constructed a year and a half ago. This is the N5 Charlestown by-pass but it is not possible to overtake on this road because it is not dual carriageway or a dual-lane road. We need a motorway to the north west but in the meantime dual carriageway roads are vital. The N5 to the west is the same as it was 30 years ago. The N4 is an improvement but a lot more needs to be done to give access to the regions of the west.
Deputy Browne highlighted the case of the holiday homes tax of €200 which is destined for a central fund. The services are provided by the local authorities and therefore the local authorities should have full access to that revenue. In my area of counties Roscommon, Leitrim and Longford, there are many holiday homes and also, unfortunately, many unsold houses. This tax would be vital for rural local authorities.
Today I attempted to raise on the Order of Business the question of flooding in my area, which occurred because there was no demarcation lines between the Office of Public Works and the local authorities. No maintenance was carried out on certain rivers and streams so that when the floods came the roads were blocked by fallen trees and were washed away. It costs up to €2 million to replace narrow rural roads. The effects of flooding could have been alleviated if some body was responsible. The county councils say it is not their responsibility but rather that of the OPW and the OPW say the opposite. The sooner legislation is in place to decide who is responsible for the upkeep and maintenance of these tributaries and rivers, the better otherwise the same problem will arise again. I do not want to be going back to the farmers, the landowners, the householders who were terrified for their lives. Much damage was caused but thankfully, there were no fatalities although there were some near misses. This is an issue that needs to be addressed.
The M50 has improved over the years because we are paying a huge amount for it. It costs me a toll of €2.70 each way to Dublin and it is another €2 each way if I use the M50, making a total of €10. If we are paying money for the upkeep of the roads in Dublin, we should get fair play in the west.
We are not doing enough to promote the use of electric cars as they are a very innovative use of energy which can be generated cheaply. Their use would remove our dependence on fossil fuels. I do not have much time for SUVs and four by four vehicles. Only about 1% of the people who drive these vehicles need them for the work they do. The Government has done a reasonable job in getting people to move away from the SUVs. They are dangerous when in collision with other vehicles or pedestrians or a bicycle. The chances of coming off unscathed from such a collision are very slim. These vehicles were regarded as a fashion item or accessory but the less we see of them on the roads, the better. I agree they are useful vehicles for farmers and builders or for certain lines of work but one does not need an SUV to bring children to school. We went over the top and the sooner we roll back from these outdated modes of transport, the better.
I would encourage schools to have a traffic management plan to allow young children to cycle or walk to school with their friends because there is nothing better and it is environmentally friendly.
I wish to share time with Deputy Pat The Cope Gallagher.
This Bill will provide a permanent legislative basis for the motor tax increases approved by the House on budget day. The motor car is part of life in our world today. It has changed the way we travel and increased the pace of life for many as is evident every day of the week on the roads throughout the country. A survey taken six months ago showed that almost two thirds of people planning to buy a new car would buy a vehicle with lower emissions if it resulted in paying lower motor tax. The poll, which was carried out by Red C for the Irish Taxation Institute, found that 55% of people would also consider changing their current car if it meant a lower tax bill.
The survey showed a strong awareness of changes in the car tax and vehicle registration system. A total of 59% of those surveyed said the changes to VRT would encourage the purchase of vehicles with a lower emissions rating. A total of 60% claimed the new VRT changes would make them more inclined to purchase a car with lower emissions. Regarding motor tax, 65% of people who planned to buy a car said they would be more likely to buy one with lower CO2 emissions if it meant saving money. Cost is the bottom line for many people. A total of 55% said they would be more likely to change their existing car to one with lower CO2 emissions in order to save on motor tax.
From 1 July 2008, buyers of new cars with lower CO2 emissions have seen a reduction in their annual road tax. Vehicle registration tax will also be lower, depending on the emissions rating of the car. The new system, where cars are classed in a series of CO2 emissions bands, is progressive and welcome. We should be encouraging as many people as possible to move to fuel-efficient cars. If the environmental benefits of the changes in VRT and motor tax are to be truly maximised, a real collective effort is required to educate everyone on the practical implications of the change.
Yesterday the Government outlined its plans for 10% of the national road transport fleet to be powered by electricity by the year 2020 and this is to be welcomed. The size of the country suits electric vehicles and the country can become an effective test centre for the world's car manufacturers. A total of 200,000 electric vehicles could be on our roads in 12 years. This would be a ground-breaking development. Among the provisions will be a €1 million research and development fund, tax incentives for companies buying electric vehicles as well as assistance for individual buyers.
Transport emissions are Ireland's fastest growing greenhouse gas sector. Powering electric vehicles from renewable sources like wind turbines could significantly reverse this trend. The electric vehicles plan provides for tax incentives for businesses to purchase electric vehicles. Businesses can write off 100% of the cost of purchase against tax under the accelerated capital allowance scheme. The plan also provides for a €1 million project for Sustainable Energy Ireland to research, develop and demonstrate vehicles nationally. Assistance will be given to individuals purchasing electric vehicles with the publication of a buyer's guide and a cost of ownership calculator by Sustainable Energy Ireland. A national taskforce will be established to examine infrastructure options for the national roll-out of electric vehicles, including street charging.
We are serious about dealing with the issue of car emissions. The Minister expects considerable international investment to flow from this plan. It must be remembered that in 2008, €6 billion will have been sent out of the country to pay for fossil fuels. The electric car scheme would bring money back into the economy and fuel our transport fleet with Irish renewable electricity.
We all need to be increasingly aware of the environment. Any measures that can help us to reduce our fossil fuel bill and to meet our climate change challenges are welcome. This plan could bring much investment and jobs to Ireland, with the potential to make Ireland a centre for electric vehicles. In these changed economic times, such a development is welcome.
We must think of our future generations. As a rural Deputy, I am always struck by the number of cars used in Dublin city. We must do what we can to reduce our dependence on fossil fuels, improve our energy security and lower our transport emissions. The key to our transport future, as the Minister for Transport, Deputy Noel Dempsey, outlined yesterday, has to include smarter, more sustainable travel choices.
The ESB is fully on board with this initiative. With the development of carbon-neutral electricity, Ireland has the opportunity to engage fully with the process of moving to electric vehicles. I was glad to learn the ESB is working to facilitate the development of electric cars, realising it will be a critical component of the green economy. We need new thinking when it comes to the motor vehicle sector. With the increasing global use of cars, and with issues such as climate change uppermost in our minds, Bills such as this show initiative. We must continue to be progressive when it comes to the motor industry and do all we can to make it as energy efficient as possible.
In 2003 and 2004, as a Minister of State I took the motor vehicles Bills through the House. The economic circumstances in those times were much better than they are now. We have major economic difficulties stemming largely from international factors. While we have some control over them, unfortunately being a small country, an island economy and a large exporter means the credit crunch and fuel prices are having a detrimental effect. I sympathise with the Minister and Minister of State with the economic position in which they find themselves. The price of a barrel of oil on the international market has reduced significantly. Thankfully it has been reflected at the pumps but, as I said in a debate yesterday, it has not been reflected in the fuel surcharge on transatlantic flights. Those airlines charging these exorbitant surcharges should look at them again more closely.
I commend the Minister for reducing motor tax and VRT. While it has major advantages in reducing emissions, someone must pay for that. For example, the motor tax in 2007 on a 1.9 litre diesel was €560 and was reduced to €105 in 2008. The VRT in 2008 was 16% as against 25% in 2007. While this is laudable, there is an issue with first-time registration. VRT before 2008 was based on engine capacity while now it is based on CO2 emissions. Will the Minister and his officials examine how this is affecting garages with large stocks of second-hand cars? For example, if one brought a car manufactured before 2008 into the country and registered it for the first time, the VRT would be 16%. In the case of a second-hand car bought in Ireland it stands at 25%. There is little point in having a large stock of second-hand cars stuck in garages. It is the punter — the consumer — who ultimately pays for this.
I also wish to raise local government funding as it comes under the Bill's remit. As every Member knows all politics is local. I served as a member of Donegal County Council from 1979 to 1991. For 2009, Donegal County Council has seen a 6% reduction in its local government allocation, €41.5 million compared to €44 million last year. This does not take into consideration inflation.
Donegal is a county with many holiday homes or, as described by the Minister, non-principal residences. We welcomed the introduction of the levy on such residences because it was believed the €200 per residence would go straight to the local authority. However, it turns out that the local government fund and the allocations to the various councils from the levy have been included as a guesstimate of €40 million. Donegal County Council will collect the levy, send it to Dublin but much of it will not return to the council.
I also understand an insurance has been taken out on this. If the levy is less than €40 million, there will be a reduction of what is allocated to local authorities. It is difficult enough for us to survive in Donegal with the allocation received from the local government fund without having this threat of a further reduction hanging over us. How can a local authority plan in advance if it is informed it may not receive its share — I will not describe it as fair and equitable — of the €40 million in June next year and that it may even be reduced? The corollary is that if the levy comes to an excess of €40 million, I presume each local authority, particularly Donegal's, will receive an additional allocation.
While the levy will not be a great imposition on those with second houses, I am somewhat concerned as to how collecting the levy can be put into operation early next year. It will require legislation. When we had rates, it was the occupier who was responsible whereas now it is the owner. Many of the homes in my county are used during the summer. What is the best time to collect? Who will collect the charge? Will it be the Revenue Commissioners or will the local authority be compensated for additional work and possibly working at weekends? Many who have homes in Donegal are from Northern Ireland and many are only there at weekends. These are the micro aspects of the issue that must be teased out.
Local authorities must be compensated for this. If the Department is working on guesstimates, as I believe is the case, I can make a guesstimate that Donegal has 6,000 holiday homes. Donegal would collect €1.2 million and there would be a great incentive to do so. In the €40 million incorporated in the overall local government fund nationally, how much will be given to Donegal? What is the guesstimate? I fear that it will not be near the €1.2 million to which we are entitled. It is not a question of being critical but of being pragmatic about how this will be administered.
I return to the 6% reduction, which is in excess of that figure in real terms. This will have an effect on many people in my county, some of whom have been advised that contracts that run out in December will not be renewed. In addition, others whose contracts run out in the early part of next year will face the same fate. One might question why, if local authorities can be administered without these people, they were there at all. They would be there on a permanent basis if it were not for the embargo over the years. These are real people and their partners, spouses and families will suffer as a result of this. The Minister should examine this in light of commitments to people and front line services. It would be foolhardy of me, an ardent supporter of Government, to say that this will have no effect. Of course it will, these people are in front line services.
What we are told about roads allocation will have an effect later in the year. I will not pre-empt the decision of the Minister for Transport in respect of roads in a county where we must travel for one hour from where I am based in west Donegal to get onto a national primary road. It is important that we have facilities. I commend the Department on what it did in the past. In Donegal we have a template of which many other counties are envious, whereby each electoral area provides services for its own electoral area in the most remote parts of Donegal. Examples are in Inishowen, Letterkenny and Dungloe for the Glenties electoral area. The Department supported that at the time. It brought the services to the people of those electoral areas. I applaud all those involved in that.
Some 71 people have received notification that they will be gone at the end of December, while another 49 will be gone at the end of March and the contracts of others will run out during the year. We talk about efficiency and value for money. That is the purpose but I question how a local authority can have greater efficiency without these people playing an important role in various aspects of the local authority. The Minister must examine this closely.
I refer to the administration of the higher education grants. We know that higher education grants are administered by the local authority but the local authority does that at no cost to the Department of Education and Science. It costs my county €155,000 to administer this. There must be some equity. Why would a local authority want to provide those services when it will not be compensated?
I suggest to the Minister of State, Deputy Finneran, who has served many years in a local authority, that we want a fair and equitable share in respect of the holiday homes measure. We do not seek positive discrimination. We seek fairness and equity. The Minister must say that our share of the €40 million is written in stone and gilt-edged in the event of additional money being available. I have not heard that the Department is insisting the €200 levy on non-principal homes will be given to the Exchequer. The Minister should examine this. Donegal has done a great deal to help itself over the years and depends on tourism and people from Northern Ireland building holiday homes there. We are to be penalised for that and we must share the income with other authorities. The scheme must be much more transparent than it is.
A debate such as this is a tremendous opportunity to comment on local authority funding. The local authority is the university of politics. We are much more knowledgeable for having spent time on local authorities. They are going through a difficult period and need our support and the support of the Department. The Department must closely examine the €200 contribution. I wish local authorities well in raising this. I am sure they will make every effort to do it but there should be an incentive for those local authorities such as Donegal.
Gabhaim buíochas leis an Leas-Cheann Comhairle as ucht cúpla nóiméad breise a thabhairt dom. Mar a dúirt mé, is am iontach deacair é seo don Rialtas, go mórmhór an tAire agus na hAirí Stáit sa Roinn Comhshaoil, Oidhreachta agus Rialtais Áitiúil. Tá súil agam go mbeidh siad ábalta cuidiú linn, go háirithe ó thaobh an levy atá le gearradh ar na tithe saoire.
I wish to share time with Deputies Broughan and Ferris. The Minister referred to local government funding, saying that the sole reason for the increase in motor tax rates is to raise money for the local government fund. He refers to the fact that this is ring-fenced, a positive move initiated by Deputy Howlin when he was Minster for the Environment. The point made by Deputy Gallagher, that local authorities can have their own funding, is important. The Minister made the same point in his speech:
Changes to the way local government operates must be accompanied by measures that provide a greater link between local revenue raising and local expenditure. This is key to introducing greater local responsibility and accountability in decision making.
Deputy Gallagher was correct because there is a lack of a paper trail in respect of funding collected at local level that relates to the communities affected by the development. Holiday homes are built in Donegal and that is the source of the money but Donegal must cope with the services that are needed by the holiday homes. It makes sense that the local authority can collect the money and have access to the money it collects. When I heard the announcement in the budget I thought this was the idea. It is very unfair if the money is put into a general pot and divvied out between local authorities. I live in the area administered by South Dublin County Council. There are not many holiday homes there, if any. We might not benefit from that type of approach but an issue of fairness and logic arises, apart from anything else. I support the points made by Deputy Gallagher but it should have been possible for the local authorities to collect that €200 levy and use it for their own funding. If there are a certain number of holiday homes or second homes in an area, they should get the benefit of that because they must pay for the services and the other environmental issues that arise from such development.
The other point I want to make about local government funding is that there is a conflict in terms of the Minister's policy on this issue because on the one hand he is welcoming the fact that the increases in motor tax will raise some €40 million for the fund next year but, on the other, his stated policy is to reduce carbon emissions by getting cars off the road. The Minister is happy to operate in that grey area where he says one thing but is practical and does the other. He wants the funding from the motor tax and therefore he is happy to have extra cars on the road. That contradicts his policy on carbon emissions.
The Minister should make a decision in the Bill, and I have raised this issue previously, that from now on multiple passenger vehicles will be treated much more favourably under the motor tax scheme. There is a provision in the Schedule on the amount of tax payable in respect of vehicles constructed or adapted for the carriage of more than eight persons that are owned by youth or community organisations and used exclusively by those organisations. Another one refers to vehicles that can take more than eight persons but not more than 20. There is a provision in respect of large public service vehicles, within the meaning of the Act, that are used for the carriage of children or children and teachers being carried to or from school or to school-related physical activities.
I would have thought that if the Government is serious about reducing transport emissions and promoting sustainable transport, the Minister should introduce incentivising measures. He is incentivising in terms of the mythical world of electric cars but that is probably a long way into the future; his ministerial colleague, Deputy Eamon Ryan, talked about 2020. He should do something now about incentivising measures covering multi-passenger vehicles, particularly if they are used by youth or community organisations and buses used to bring teachers and children to school. If the Minister is genuine about reducing carbon emissions from transport, that is something he should change.
I was glad to hear the Minister state in his contribution that he is still considering bringing forward legislation to abolish the county manager and city manager systems and to have what would be effectively elected managers. I hope that ambition will be realised, although it is fair to say it is likely the Government will not survive. There are many other areas of this Minister's administration, particularly in regard to building regulations, on which he has been gravely deficient.
On the Bill before the House, it is fair to say that motorists and commuters were hammered under the 2009 budget, with the spiralling cost of petrol and diesel imposing a heavy financial burden on households. In addition, the Bill facilitates the increase in motor tax of 4% for cars below 2.5 litres and 5% for cars above that.
The area covered in the Bill is part of a wide range of extra charges and taxes that are imposed under the 2009 budget, including the VAT increases, the 1% levy, the €200 urban car parking tax and the air travel tax. The combined impact of those increases are having a detrimental impact on commuters and workers. It has been noted that at least 2,000 jobs are at risk in the car industry, with a massive downturn in sales.
I welcome the initial introduction of changes to the vehicle registration tax and the tax regime to incentivise the purchase of lower emissions vehicles as laid out in section 3. That is particularly important given the huge increase in transport CO2 emissions in the 15 years to 2006 of nearly 170% and the major dependence on cars.
I note that the rebalancing of motor taxes and fuel economy labelling at most will lead to a reduction in transport emissions of just 0.05 Mt CO2 equivalent. It appears many measures have been brought forward which will have a limited impact.
Many constituents and motorists across the country had been ahead of the game in purchasing lower emissions vehicles before this legislation was introduced and they feel hard done by as they were left paying a higher rate than a new lower emissions car registered after 1 July 2008. There have been other suggestions that given the scale of reduction in transport carbon emissions needed we should consider wider reforms that would amalgamate the current duplicate VRT and motor tax into one tax that is entirely based on the car's level of CO2 emissions.
Last year I asked the Minister for Transport, Deputy Dempsey, to provide a breakdown of the number of cars in total in the vehicle fleet classified by level of CO2 emissions. At that stage, the Minister could only release data for 28% of the private car fleet because the national vehicle driver file only began the collection of CO2 data in May 2004. Over 400,000 cars out of the total of 525,273 had emissions of between 141 g/km and 225 g/km. The Minister had no information at that stage on commercial vehicles. There are serious ongoing problems with the operation of the national vehicle driver file.
It must be said that the Government has been lethargic regarding the necessity to move the Government itself and the public administration towards increasing fuel efficiency. It is notable that the Government, in the roll-out of the One Small Step, Power of One campaign, did not lead by example in terms of its own vehicles.
As my colleague mentioned, yesterday we had the announcement by the Ministers, Deputies Dempsey and Ryan, on the nationwide roll-out of electric cars. Whenever we hear the Minister, Deputy Dempsey, making some major proposal, as the Acting Chairman might agree, and as some of the Fianna Fáil backbenchers do, they are often like crazy daydreams which never translate into reality. If we look back a number of years we can see that nothing has been achieved. It was striking yesterday that much of the presentation on the electric transport vision for the future was about new studies by Sustainable Energy Ireland and new contacts with other countries and administrations across Europe, with little real delivery on the ground or real encouragement for people to change to electric vehicles or larger vehicles.
The Bill is a small step on the way towards a more fuel efficient transport fleet but I have no confidence in the Minister administering it or in the Minister for Transport.
Sinn Féin supports measures taken to encourage the use of vehicles with lower CO2 emissions and was calling for that for some time before the Government decided to act. Nonetheless, any steps in this direction are to be welcomed.
Encouraging people to use vehicles with lower emissions is an important aspect of any strategy to reduce carbon emissions. The objective of the new tax rates with progressively higher rates for the larger vehicles is to encourage people to buy vehicles with lower emissions and, by extension, reduce the sales of larger vehicles such as sport utility vehicles, SUVs.
Interestingly, because the increases were well signalled last year and perhaps with the confidence that the new tax rates would apply to new sales, the sales of SUVs here comprised the biggest increase in car sales in this State in the first half of 2007, with a rise in market share from 5.6% in 2006 to 6.8% in 2007. Sales of SUVs increased by 29.6% compared to the same period in 2006. That increase must, to a certain extent, have offset whatever benefits were to be achieved by the CO2 tax that was, as I said, already well signalled. Much has changed in the meantime and the economic downturn has resulted in a significant fall in car sales here. New car sales were down 50% in May. Some of that fall has been attributed to the VRT and tax changes which came in on 1 July.
There was some speculation that the market would pick up significantly after 1 July with people moving towards lower taxed vehicles but the figures for last month showed that this country had the biggest falls in sales in the EU at 54.6%. That represents a more than 18% decline on the first ten months of 2007. The number of second hand cars licensed during the same period increased by 4%. It would appear then that the recession is playing a far greater role than anything to do with tax and that the reduction in car traffic is a symptom of economic difficulties and rising unemployment rather than anything to do with the environment or the carbon budget.
On the other hand, there is evidence that people are increasingly aware of the importance of reducing emissions and of their role in this regard. This has led to an increase in the share of new vehicles by those with the lowest emissions. These accounted for almost 10% of new sales in 2006 while the second lowest category of vehicles accounted for another 22% of sales. Tax incentives for vehicles with lower carbon emissions have increased that trend.
There is also an argument that tax on lower emission vehicles might have been frozen while any shortfall would be made up by even higher taxes on those with much higher emissions. Some have argued that because of the price involved, the disincentive to buy the larger vehicles is perhaps not as great as imagined. That factor may be lessened by the current downturn. Unfortunately even the most optimistic projections regarding the reduction of CO2 emissions accept that measures designed to reduce vehicle omissions will make only a small contribution to the overall target of reducing carbon emissions in this country.
Sinn Féin believes the major focus for tackling emissions from motor vehicles ought to be improving and increasing the use of public transport. If there was a better funded and more efficient public transport system, there would not be the same incentive for so many people to drive to work or use their cars at other times. There have been some small successes on this, with the Luas in Dublin for example, but there needs to be a much broader approach if large numbers of people are to be persuaded to leave the car at home. If that were to happen, there would be far more significant reductions in carbon emissions than anything possible through changes in vehicle taxation.
The major incentive to increase public transport as part of any strategy to reduce carbon emissions is found in the extremely small part which the sector currently has in creating emissions. In 2006, this stood at just 4.1% of the total emissions in this State, which was reduced from 5.3% in 1990, with the fall accounted for by a reduction in rail transport emissions. Emissions from private cars on the other hand accounted for almost 37% in 2006, although that, too, was down from 1990 mainly due to greater fuel efficiency despite the fact that car ownership had greatly increased over the same period. The overall share of emissions caused by transport had risen to 35%. Any increase in public transport use would have a significant positive effect on the level of emissions and, on that ground alone, apart from any other social benefits, would be well worth the increased investment.
Even with these reductions in CO2 emissions from transport vehicles, there is little optimism that the current strategy to achieve the 2020 reduction targets will be successful. Professor Richard Tol of the ESRI has claimed, for example, that the 3% annual reduction up to that date would be reached only with a doubling of the price of petrol and a trebling of the price of electricity. The questions that must be posed are whether the strategy is focused on the right targets and whether attaining the target would be worth the severe impact of the sort of measures referred to by Professor Tol.
While the increased tax receipts from road vehicles will be paid into the local government fund, there is a good deal of dissatisfaction around the country among members of local authorities regarding their finances. This is a consequence of the measures taken in the recent budget which entail the reduction in funding for local government. Local authorities have been advised that their wage bill alone must be reduced by 3%. The overall impact on local authorities will be to force them to reduce the range and quality of services they provide and this will have a detrimental impact on communities throughout the State. The Acting Chairman, Deputy Neville, and I had a conversation earlier and we have all-party agreement that the roll-out of the electric car should be to Athea and Knocknagashel.
I welcome the opportunity to speak on this Bill, but I do not welcome the increases in it. The only bit of good news in it is the fact that there is no increase for electric vehicles. I welcome the idea of electric vehicles. They have a major role to play in the towns and cities of our country. When the Minister launched it he said it was possible to use it on a trip to Galway or elsewhere. Many cars are in use because of a lack of proper public transport. I think of all the cars one sees outside schools. In the past the huge four-wheel drives were often used for that purpose. If we could get the second person in the family to use an electric car for the short runs and city and town purposes, it would be a major cost-benefit to the family and reduce our CO2 emissions.
Ordinary motor tax has increased by 4%, tax for larger cars by 5% and commercial motor tax by 4%. The Minister pointed out that this increase will go to local government and this is necessary because local government funds are under severe pressure. In my constituency of Cavan-Monaghan commercial businesses and workplaces are under enormous pressure. As the Minister has already sent word to county councils, they should seriously examine their ratings procedures. Without apology I suggest that it is a year for zero rate increases. Otherwise councils will take in less money as more shops and industrial facilities are put out of business. A closed door means no rates. Common sense must be used.
Jobs are at risk. A small factory in my local town, Ballybay, uses a lot of water for its production purposes. However, because of the new structures, its bill has increased by over 100%. It now has to pay for water in and water out. A high quality cleansing system is used to treat the waste water. The water is drinkable as it leaves the premises but it cannot be reused in the system for technical reasons. An additional machine costing €250,000 would have to be installed to allow them to reuse the water in their system. The Government must seriously examine the provision of grant aid towards the installation of such a machine to minimise the use of water and to control the costs of the business if it is to remain viable.
I had the privilege of visiting Shabra Plastics in Castleblayney when a new wing of the factory was opened by the then Minister for Enterprise, Trade and Employment, Deputy Martin. The company has installed a unit that allows it to recycle the extraordinary volume of water used in its system. The company is, therefore, not buying water from the county council other than for use by the staff. Water on the roof of the factory is captured and it can be reused through the cleansing system. We must be conscious of this technology if businesses are to be sustained. The case of the small factory in Ballybay must be seriously considered by Government agencies in order to provide help because if it is to pay the water charges imposed on it in addition to water rates, 12 jobs will be at risk and could be lost, thus affecting 12 families and the council's revenue stream.
Previous speakers referred to road improvements in their constituencies. I acknowledge the major improvements to roads between Dublin and Monaghan town such as the M1 and N2. Carrickmacross, Castleblayney and Monaghan town have been bypassed in recent years and I pay tribute to the NRA personnel who made a commitment to us long ago that if we agreed to the bypassing of the three towns together, funding would be provided for all three. The Minister and the NRA delivered over a reasonably short period.
However, I am worried that when the previous Taoiseach finalised the St. Andrew's Agreement, he made a commitment on behalf of the Government to build a dual carriageway between Derry, which is the fourth largest city on the island, and Dublin via Monaghan, a route also used by many people in northern Donegal. I am delighted that officials are examining the route between Derry city and Aughnacloy and it is guaranteed that will be built as quickly as possible but the Minister for Transport dropped a bombshell at a recent committee meeting when he said officials were examining the option of building a single carriageway between the Border and Ardee, with the exception of the area around Castleblayney. The Minister must be honest about these proposals and the Government should carry through on what was promised in the St. Andrew's Agreement, which was a dual carriageway between Derry and Dublin. This is a major issue, which must be clarified.
When the Minister left the committee, officials from the NRA and the Department of the Environment in Northern Ireland suggested the project had to be re-examined. I ask that it be re-examined because it would be an anomaly to build a dual carriageway between Derry and the Border, connecting to a single carriageway and then a two and one carriageway between Clontibret and Castleblayney, which also needs to be examined. Many complications will arise and there will be serious accidents on the road unless slip roads and so on are amended. This project must be re-examined and clarified.
There are major problems with the M3 and the N3 in the other part of my constituency. Through no fault of the Government and the relevant Departments, there have been major hold ups with the development of the M3 but work is proceeding quickly. The problem in County Cavan, however, is the bypass of Virginia is no longer even being discussed while the bypass of Belturbet, where many fatalities have occurred, is still on hold. We were promised a number of years ago that this bypass was a priority but the last letter I received from the NRA recently suggested otherwise. These issues need to be addressed, regardless of the recessionary times we are in. If we are to attract industry to the regions, roads similar to the N2 will provide a benefit. Proper broadband services are also needed.
The Minister referred to the need for more localised revenue raising and expenditure and the introduction of charges for non-principal private residences. Is that the introduction of rates through the back door? I have no major hang up about the tax on second homes but the problem is counties such as Monaghan and Cavan do not have massive numbers of holiday homes like counties Donegal, Wexford and Kerry. I am not as sure as other Members that I would like the revenue generated from taxes on holiday homes to be spent in those areas. There is a justification for it to be spread around.
I refer to the motor tax issue. Many of my constituents consciously bought an environmentally friendly car with low emissions but they find themselves in a unique position. Two neighbours living beside each other have the same car, the only difference being one could afford a new car and the other car is a few years old. The person who was wealthy enough to buy a new car gets away with €150 in motor tax whereas his neighbour who has lost his job and has major difficulty meeting his bills must pay three times as much. The Green Party Ministers claim to be conscious of the problems faced by different people. Where a person cannot afford to buy a new car but drives a car with low emissions, it is totally unfair that he or she should have to pay three times the tax his or her neighbour must pay because his car is a few years older.
This issue must be revisited as a matter of urgency. A person gave me a letter to pass on to the Minister because he had got no answer to it. I also put down questions on it. I accept that the law was passed through this House to make this legal but making something legal does not make it right. If two children in school were handed sweets but one was handed a box of sweets and the other just one sweet, we would call it discrimination. As far as these people are concerned, this is major discrimination.
We must consider other areas where we can cut emissions and deal with some of our problems. I understand there is a major problem at present given that China no longer wants to buy bales of plastic refuse. Surely this material could be turned into biodiesel or some other product in this country. Over the years we have at enormous cost exported meat and bone meal which had to be disposed of because of BSE — I saw the export figures the other day and they are scary. This was exported and burned to give clean, cheap energy to our German counterparts. Is it any wonder we have become uncompetitive if we export something that is extremely useful for creating energy? We must consider all these areas, not just cars.
I wish to mention in passing a problem that continues in Border regions with regard to penalty points. I urge the Ministers concerned to try to bring this to a head as soon as possible. As a member and vice chairman of the British-Irish Interparliamentary Body, I know it has raised this issue on several occasions and has got movement to some degree. When I am driving down the M1, as I do every week and sometimes several times a week, I usually travel at the maximum, without apologies, as that is what we are allowed to do. If possible, I set the car on automatic, which saves fuel and protects the car, and this is far better than travelling on the old roads. If cars overtake me, I am certain that three out of four will have non-Irish number plates. It is a serious matter because many of these cars are involved in accidents. The same thing happens in the other direction. If I am going to Belfast, I may be as much a chancer as some of the others because I know the likelihood of my being caught, if I am in a hurry, is not that great. I would like to have this matter dealt with.
There is also an issue with regard to coming to Dublin which was raised by my colleague, Deputy Fergus O'Dowd, and has been highlighted in the House umpteen times. If we are serious about cutting CO2 emissions and we are using tax to do it, why can we not make sure that areas such as the tunnel in Dublin have proper park and ride systems to ensure people park on the edge of the city rather than bringing their cars into the centre? In Canada and other countries, there is a structure whereby if three or more people are in a vehicle, they can travel in the bus lanes, which encourages people to come together and instead of having three vehicles travelling to the city centre, there is only one. I also ask that we would reconsider the situation regarding speed limits.
I meant to talk more on the issue of support to the county councils, which have serious funding problems this year. We do not know what will be the total amount paid by the Government but it will not be that generous. Councils have lost out on funding this year due to the reduced number of houses being built and they have also lost because as housing estates are no longer being built, they will not get the 5% of housing they would have hoped to get from those estates. They will have to reconsider this situation. I urge the Minister to ensure county councils are given what extra funds are needed rather than forcing them to raise their other charges.
The €200 parking charge for Dublin will hit some people, although I personally do not have a major problem with it. However, if the Government encouraged more job creation in our towns and country areas, there would not be the same pressure on Dublin, Galway and other cities. Towards that end, there is an enormous need to energise the Government to make sure jobs are created in rural areas, particularly the Border area. Monaghan has not had a single development with regard to jobs since the Troubles and Cavan has not done much better. These areas must be seriously considered. If jobs are created there, it will save much travelling to Dublin and will save congestion in other areas. Many people in Monaghan must get up at 4.30 a.m or 5 a.m. to get into their cars to avoid the rush in Dublin, which is leading to increased CO2 emissions and other problems.
I wish the Bill well but I hope some of the issues I and others have raised will be addressed.
On behalf of the Minister, Deputy Gormley, I thank all Deputies who contributed to this debate and I appreciate the indications of support for the Bill. The Minister in his introductory remarks made clear that the sole reason for increasing motor tax rates was to fund local government. He also pointed out that motor tax increases since the year 2000, including the current increases, are below the inflation rate over the intervening eight-year period. The extra cost for 94% of the car fleet, that is, those under two litres, will be between 13 cent and 46 cent a week.
Deputies are aware that all motor tax receipts go into the local government fund and they know the significant role it plays in financing local government. Increasing any tax is of course not popular, and in making this decision the primary consideration was the need to provide adequate funding for local government while not over-burdening people at a time of economic difficulty.
I welcome the emphasis in the debate on the importance of tackling climate change. The introduction of emissions-based car taxation has already been shown to work effectively in the early days in reducing car emissions. However, this is only one aspect of a much broader climate change strategy which involves a large number of measures across the economy. We saw yesterday the announcement of new incentives to encourage the use of electric cars and the Government will also be publishing shortly a new strategy on sustainable transport.
A number of speakers regretted that the new CO2 system did not retrospectively apply to the whole fleet, or alternatively, that it did not apply back to 2004. While I understand the reasons behind these views it would have been difficult to introduce a tax retrospectively in a way which did not seriously undermine local government funds.
Deputy Ciarán Lynch asked whether the new system for revenue raising is an environmental incentive. He made the point that the success of the scheme will put pressure on revenue receipts. He is correct in this regard but from the earliest days the Minister made it clear that the new system has a dual focus and it must be kept under review to ensure it meets these aims.
Equally, it will be important to examine other sources of local government finance and this is why the Government introduced the new proposal to levy non-principal private residences which was referred to by a number of speakers. This novel levy is designed to broaden the income source for local government. The details of how this levy will operate are being considered within the Department and an opportunity to debate the proposal will arise when the necessary legislation comes before the House. In the meantime, the views expressed in the House will be taken into account in designing the scheme. It is intended the moneys raised will be returned in total to local authorities.
Deputy Crawford mentioned recycling of water and collecting rainwater from roofs. This is a matter for individuals and is a laudable approach to the water problems which exist nationally and internationally. He also raised the matter of the Dublin to Derry dual carriageway which is a matter for the Department of Transport and will be referred to it. Deputy Crawford also mentioned meat and bone meal. We have a proposal regarding ESB lines crossing County Meath and some of the objections to it are fuelled by Deputy Crawford's party.
What about the withering Greens?
I express my gratitude to all contributors to the debate. I appreciate the point made by Deputy Pat The Cope Gallagher regarding holiday homes and I will refer his point on 16% VRT on new cars coming into the country.
I welcome this important Bill and I thank the Minister of State and my colleague Deputy Phil Hogan for allowing me to take it and for their help and co-operation. There is a public hunger for serious action to be taken on climate change and this Bill has climate change proofing built in.