Approximately 26 minutes remain to Deputy Ciarán Lynch.
Local Government (Charges) Bill 2009 [Seanad]: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time."
As I mentioned just before the debate was adjourned, I wish to share time with Deputies Joanna Tuffy and Martin Ferris. How much time remains in my slot?
Six minutes.
Previously, I was discussing the manner in which the Bill has been managed to date and the need for clarity. I seek clarity in this Second Stage debate regarding the real intention behind the measure that has been introduced by the Department of the Environment, Heritage and Local Government. However, I also seek specific clarity on a particular matter. During the last Question Time in which questions were directed to the Minister, Deputy John Gormley, I asked him what was the position in respect of development levies held on account at present by local authorities. At the end of 2007, a total of €1.5 billion was held on account.
This sum entered the public domain on foot of a report by the Comptroller and Auditor General that showed that €1.5 billion was held on account by local authorities nationwide. I asked what was the position in respect of this money because at the outset of this year, a circular from the Department was issued stating that all existing moneys held on account by local authorities was now to be ring-fenced and only spent when measured against income for 2009. Therefore, a local authority can only spend €1 million or €2 million in development levies, if it is in receipt of a similar income this year. This is the elephant in the room. This Bill provides for a €200 charge on second dwellings that has the potential to raise perhaps €40 million. Moreover, that is before one considers potential difficulties in respect of administering this scheme or in collecting moneys in County Donegal and Border regions in which the owners of such properties may live in Northern Ireland. The question will arise as to how one can get the money from them or whether it is legally possible to so do.
However, even if two thirds of the aforementioned funds have been spent since the start of 2008, it would mean that €500 million remains held on account nationally. I refer to moneys to which developers, builders and home owners contributed under the development levy to have specific critical infrastructural and recreational works carried out in their communities. Will such work be done or not? If such work is not to be carried out, I question the legality of people handing over a tax for specific works to be done in their communities while, simultaneously, the Minister issued a directive to the local authorities to the effect that this money cannot be spent. Will developers ask the Department to give them their money back? This money was collected for a specific reason and will not be spent for the foreseeable future.
The Minister's circular letter, FIN 03/2009, issued in February 2009, indicates no timeline in this regard. Consequently, the development levy moneys that local authorities have on account will remain frozen for the foreseeable future. At the conclusion of the Second Stage debate, the Minister should provide some further clarification in this regard. His response in the House that day, when I believe the Leas-Cheann Comhairle was in the Chair, appears to contradict the evidence given to the Joint Committee on the Environment, Heritage and Local Government the previous day by the County and City Managers' Association. Its representatives were categorically clear that development levies that are held on account at present or up until 31 December 2008 can only be spent against moneys accrued in 2009. That is a substantial sum of money. It puts the sum of money we are talking about this afternoon in the ha'penny place. It is something on which local authorities must be given a clear answer. This is particularly true for people who are living in developments that were built in recent years when development levies were accrued and who are awaiting completion of vital infrastructural and recreation projects.
In the course of the debate on Committee, Report and Final Stages, the Labour Party will table amendments. One relates to an amendment tabled during the debate in the Seanad. I read with concern the Minister's response to the Labour Party amendment on that day in which he said there was no legal standing for the amendment to recognise separated couples in a specific context. My legal advice is that the Minister is operating illegally. During the debate on Committee and Report Stages I hope the Minister receives legal advice rather than talking on the hoof, as appears to have been the case in the Seanad. He might then come to the legal position of the Labour Party amendment, which is correct, so that he accepts there are different categories of separation in law.
The Labour Party will table amendments on the second home charge in respect of properties with an architectural or heritage value that are in a transitional stage, where the property owner may wish to hand it over to a national heritage trust, the Office of Public Works or another national agency and where the owner may be exposed to this charge over the transfer period. Unlike a development levy, which is paid over a period of time and index-linked, the cumulative cost of not paying the charge over a four year period runs into a significant sum. It increase from €200 to €4,000 over four years as a penalty. This is critical.
There was much confusion when this Bill was introduced. "Liveline" acted as a referee between callers and the Department to clarify what was happening. There was a massive U-turn on mobile homes and this reflects the cloudy thinking of the Minister on this issue. This is a consistent theme with the Green Party. We saw this on the Nuclear Test Ban Bill, part of a UN protocol to which Ireland is a signatory. The bizarre situation was that the legislation provided that someone caught detonating a nuclear device in the State would be fined €5,000. I do not know who would be around afterwards to issue the fine or collect it after a nuclear bomb exploded. This was poorly drafted legislation.
Another example is the motor vehicle registration tax. There is a difference between a good idea and good governance. The vehicle registration tax makes sense but should have been introduced on 1 January of any given year. The Minister introduced it in the middle of the calendar year. The dogs in the street know that the state of the motor industry is determined by cars being bought at the start of the year. The second hand car market is also dependent on turnover at this time. Since moving to the yearly registration system of 07, 08 and 09, this has become a critical factor in the industry. The registration immediately indicates the year of the car's manufacture. Introducing a new tax regime in the middle of the year created a situation in which cars were not sold in the period, particularly in the case of diesel cars, because people were witnessing a significant drop in taxation. It was June or July when this measure was introduced and car sales started to drop. Other factors have had serious implications for the motor vehicle trade but this was the entry point at which the motor vehicle trade was in danger because of bad sequencing and timing by the Minister and his Department.
Whether this is a tax or a charge and whether it is indirect or direct, all payments by citizens to local or national government should be paid in equity and fairness. There are concerns about how equitable or fair this measure will be. There are fears that because this legislation is being rushed, Opposition spokespersons are not begin given enough time to examine what the Government hopes to achieve, given the number of U-turns the Minister and his Department have made to date.
When this was announced in the budget it was called a charge. There was no mention of a tax. In legislation it is now being referred to as a tax and the Minister refers to it as a charge at times and a tax at other times. It is in between, neither one nor the other.
It is hard to know how if fits in with future plans for taxation and local government funding. The Minister made the point that this is the first time there is an independent source of local government funding in a long time but it is not part of a local government review. It is not clear that this is what the measure is about. The problem with the charge and the legislation is that it is not part of an overall plan on how to tax or charge people fairly to pay for public services. A flat charge that people pay irrespective of income or wealth is a blunt instrument. It is an ad hoc measure that goes back to the budget before Christmas, when certain measures were introduced and then there was a U-turn. There was a U-turn in respect of mobile homes after the legislation was published. There is unfairness in this. It will hit people irrespective of how valuable their property is, their income or circumstances.
Will nursing home residents be charged this sum? How long will they be charged for? The charges may build up if they are not aware they are liable for it. Local authorities will not know if this is a property to be charged. Those in nursing homes who will be hit for the charge will also be charged under the fair deal legislation for up to 15% of the value of their houses. This will include those on modest incomes, on the State pension and who bought council houses from the local authority. The value of the house may be €150,000 and it may be the one thing the person intended to leave to the family after passing away. It is unfair to hit those people.
There are many anomalies in the Bill. It is not unlike bin charges as they were originally introduced, where there was a flat charge everywhere. In that case, many local authorities had a waiver system for those for whom the charge would cause hardship. There is a similarity because the charges attach to the property. If selling the property, one had to clear arrears and bin charges. I presume that is still the case. There is no waiver or consideration that someone might have a property subject to a charge but not have a major income. The nursing home resident is one example, another is a person with a second property but who becomes unemployed. That is why this Bill needs more thought and should have been part of an overall plan.
There is no return in services. This is allegedly a new income stream for local authorities but no extra services will be provided by them in return. It is to plug a gap in funding from the national Exchequer as the Government is cutting funding to local authorities. Whether it will make up the difference is questionable because it will create an inequality in terms of what local authorities receive through the charge. I understand that some local authorities will receive more under the charge than others and I hope the Minister speaks more on this aspect.
Material prepared for us by the Library indicates that Kildare, which is the constituency of the Minister of State, Deputy Áine Brady, will raise a low level of revenue through the charge. However, I know that Kildare is not unlike the area in which I live; it is part of the commuter belt and has huge needs. Issues have already been raised by Deputies from Kildare about the lack of funding as the local authority in north Kildare comes out unfairly with regard to local government funding. Huge demands are made on the services because of the huge numbers of families living in the commuter belt.
The implementation of this tax is another example of the Government's policy of ad hocery and crisis management — it is not part of an overall plan — and it is an example of divide and rule whereby the Government picks on a sector of the population which it has decided is doing great. Many of those hit will be people on middle incomes. Other examples of this are the public sector pension levy and the proposals to introduce third level fees.
It is easy for someone to state that he or she does not have a second property — I do not — and to shrug his or her shoulders. I know some people who built holiday homes and who privately rented out accommodation benefited from the various tax reliefs introduced by the Government over the years and there is a certain amount of equity in the fact that they might be hit for a tax now as they legally avoided tax under the various tax structures put in place by the Government on holiday homes and the development of property in incentivised areas. However, many who will be hit by this tax did not benefit in that way. We need to consider how to tax, levy and charge people in a way that is fair and has the common good in mind. The outcome should be to ensure that what we do in terms of our taxation and spending policies are for the common good. None of that is behind this legislation.
Fine Gael differs from the Labour Party on the point of third level fees. Is third level education for the common good? I believe it is and that it does not matter whether it is my children or someone else's who receive third level education. It benefits all of us and our economy so why pick on students and tax them? We all benefit from third level education and we should pay for it through a fair taxation system not pick out sectors of the community, make them pay for it and treat it like it is a consumer good, which I believe Deputy Brian Hayes of Fine Gael did in his article in The Irish Times today.
Why did the Government appoint a group of unelected individuals to come up with cuts? Why does the Government not have an overall vision of how it will tax and use the money collected to bring about a better society? There is no vision in this; it is all part of a very negative approach of which an bord snip nua is one example.
I also want to discuss cutbacks because although this is an alleged new income source for local authorities they have been told to substantially reduce their expenditure. This means they are letting go temporary staff and not recruiting to fill vacancies that arise. They are not employing the people they used to for summer works such as cutting grass in local cemeteries. In a cemetery in my constituency the grass is up to shoulder height because South Dublin County Council cannot employ students to carry out this work during the summer, which it normally did. There is a rota of where to cut the grass in the various cemeteries and as a result families turn up to leave flowers for their relatives and have to wade through uncut grass. We also have other issues, such as uncollected litter at beaches.
Services are being reduced but the money saved must be weighed up against the money lost to the economy if the image of Ireland as a good clean country is damaged by not collecting litter. Will there really be savings? Most of the temporary workers let go by local authorities were on low incomes. They are now on the dole and are being paid to sit at home to do nothing. Local authorities had plenty of work for them to do. The wages they were being paid were not that much higher than what they receive on social welfare but they wanted to work. Last month, the shortsightedness of this type of cutback was borne out by the fact that county and city managers told the Joint Oireachtas Committee on the Environment, Heritage and Local Government that they made a submission to FÁS to ask to be allowed to provide employment through FÁS schemes because they have much work to be done but do not have the workforce to do it.
The Government's policy is shortsighted. We need a plan for the economy that takes into account the broader picture and looks at society as a whole to consider how best to impose taxes and spend public moneys.
As others stated, this Bill is to be welcomed for addressing areas which were neglected for far too long. Any of us involved in local government who have party colleagues who are local councillors know there has been considerable resentment over the fact that holiday homes were not making a contribution to the cost of providing water, roads, sewerage facilities and other amenities in their respective areas. This was particularly the case in counties such as mine where there is a considerable number of such buildings which place a very high demand on those services. That is not to say that people object to people having holiday homes as individuals or to let commercially. However, it is only fair that they make a contribution and I welcome the provisions of the Bill.
I have submitted an amendment to section 3(3)(a) which deletes the reference to the €200 rate set by the Minister and transfers that right to local authorities which is best placed to decide. For this reason, I will oppose the Fine Gael amendment which proposes to give the power of collection to the Revenue Commissioners rather than to local authorities. This would add to the bureaucracy involved and local authorities would be more efficient at collecting such a charge and would immediately have the money at their disposal to fund local services. That cannot be stressed enough, particularly in the present circumstances when local authorities are striving for funds to meet the demands placed upon them and provide such services for holiday homes. It is also to be welcomed that the Minister amended the original draft to provide that the revenue collected from holiday homes will be retained by local authorities and in that way go towards the provision of essential services, particularly as there are so many financial constraints at present.
I also welcome the fact that caravans will be exempt from the charge. The proposals with regard to caravans and mobile homes have been brought to the attention of all Members in recent weeks. Most people who own caravans are in the low income bracket of society and it is not right to put further constraints upon them.
The issue of commercially-let holiday homes has been raised and no doubt many Deputies received representation from the owners of such properties to ask to be exempted. There is a point to be made on the importance of holiday homes to the local economy and the fact they bring much-needed spending, particularly during the summer months; we can testify to that in rural Kerry, Cork and Clare. They bring significant benefit to the local economy and are much appreciated. Long may that continue. However, there is little ground for exempting them from the charge, given that residents of the counties concerned must pay local for local services and the fact the premises in question draw heavily on those services. Therefore, while I recognise the case being made, fairness requires that the charge should stand.
I also support the amendment to exclude from liability what are referred to as "granny flats", premises built adjoining existing family homes in order to accommodate a parent or close family relation. These are a common feature around the country and play a vital role in care for the elderly by families. In light of the fact this represents considerable savings for the State, which might otherwise have direct responsibility for looking after such people, it is only fair such premises should be excluded from the charge, as proposed by the amendment in the name of Deputy Hogan. It is a good amendment and should be supported. I hope it is taken on board. The same applies to the amendment to exempt people who are currently in residential care and not living in their home, but who would be liable for the charge as the legislation stands. I support the proposal to exclude them from the charge.
Much of the Bill is welcome. I applaud the fact that those who drew it up and those who have brought it to the House have listened carefully to the proposals for amendments and to those who voiced their opinions in the media or through their representatives.
I wish to share my time with Deputy John Browne.
Is that agreed? Agreed.
In October 2008, as part of its budget, the Government announced it would introduce a €200 charge on non-principal residences. The legislation necessary to give effect to this was published by the Minister for the Environment, Heritage and Local Government, Deputy John Gormley, on 24 June 2009. The bill brought forward, the Local Government (Charges) Bill 2009, will give effect to last October's budget decision.
The €200 charge proposed in the Bill will apply to the owners of residential rental property, holiday homes and vacant properties, unless the vacant property is newly constructed but unsold. It is estimated that the new charge will provide some €40 million in revenue to county and city councils each year and that the charges will be collected and retained by local authorities. This is a good step. However, the actual yield will only be known once collection of the charges by the local authorities begins. The Bill represents the first important revenue stream for local authorities since the abolition of domestic rates over 30 years ago and it will provide access to much needed funds.
We all recognise that councils carry out very important work in the area of water schemes, road improvements, infrastructure and tourism, etc. However, some of that work has been jeopardised this year due to the drastic decline in development levies and other cuts. This new measure is significant in that it recognises that local authorities require a stable revenue stream that is independent of central government funding. These moneys will not only reduce local authorities' dependence on central funding, but will provide a stable income stream, as this is not a transaction based tax. In other words, the charge will not be affected by economic conditions in the way that stamp duty or capital gains tax were.
The County and City Managers Association, CCMA, recently proposed the introduction of a local property tax as a mean of raising funds locally. The new property tax will be collected each year on a day known as the "liability date". The Minister for the Environment, Heritage and Local Government will choose the liability date for 2009. Failure to pay the charge within the relevant period will result in a late payment fee of €20 for each month or part of a month that the charge remains unpaid. A grace period of one month will be allowed before the late payment fees start to take effect. Any unpaid charges will be a charge against the property. This means that if the property is sold, those charges will remain against the property for a period of 12 years. Non-compliance with the charge will be considered an offence.
The person liable for the charge is defined as the "owner", that is the person to whom rent on the building concerned is payable, or would be payable if it was rented. The owner of the residential property shall be liable for the charge on the specific liability date and he or she shall pay it to the local authority in whose area the property is situated. The Minister may also increase the charge of €200 in line with inflation.
Not all residential properties are categorised in the Bill under the title "non principal residences". Those houses that will not be subject to the €200 charge are those that are newly constructed but unsold, those of particular heritage value, those let by certain public authorities, those that are the subject of a shared ownership arrangement with a housing authority and those that are owned by voluntary housing bodies or those that are the subject of a contractual arrangement with a housing authority. As someone who was involved in the social housing area as a councillor, I welcome this on behalf of all the voluntary bodies throughout the country who do so much work in the area of voluntary housing and meeting housing needs.
The Bill provides for a number of exemptions from payment of the charge, such as the temporary ownership of a second home used for a short period while moving house. In this case, a person may have the €200 charge refunded, but must dispose of the original property within six months of the liability date. I welcome the amendment that specifically provides that those in nursing homes will not be subject to a €200 charge on their home. Granny flats will also be exempt, where the owners or parents live in the second house on the land within a specified distance of the main house. A person going through a judicial divorce or separation resulting in one of the spouses buying a second house will also be exempt, provided this is to be used as the main residence of the other spouse. Owners of principal private residences who occupy their property as their principal private residence, but who let out rooms within it will also be exempt from the charge.
I wish to comment on a number of other areas concerning local government. We all understand the importance of the functions of local government. I served on a local authority for a number of years, as I am sure did many Members before the ending of the dual mandate. Local authorities face significant issues, such as the provision of housing, the provision and maintenance of roads, the maintenance of the environment and water and sewerage infrastructure. These are vital issues at this time. The county development plans are also of significant importance in each local authority area. Local councils work hard with planners to try and get the best deal for everybody within those plans.
Planning and enforcement are another issue. I compliment planners in the main, particularly those who in recent years fought and worked hard against the pressures for huge developments in our towns, villages and the countryside. They often got stick from us for that resistance, but I compliment them on the job they did. They held the reins as well as they could. We now concede we have an over-supply of houses and housing schemes in some areas. Developers went a bit mad in the Celtic tiger years, but those years are now over.
I must pay tribute to the planning officer in my area, Mr. Michael Lynch in the South Tipperary County Council. I pay tribute to planners who worked hard, despite criticism and who held the line. However, I now ask planners and county managers — I have asked the county manager in my county and his director of services to do this — to make the planning process more accessible, particularly for rural dwellers as there are many issues in that regard. A more accessible planning process would also act as a boost to the construction industry. Better incentives would encourage people with business ideas and plans.
I am aware of such people in my constituency who have found there is too much red tape and that planning approval takes far too long to obtain. Third parties are entitled to object, raise issues and appeal to An Bord Pleanála. I am aware of planning issues continuing for the past six years with regard to a hotel in my own town. This was a landmark building that ceased operating as a hotel and became derelict. Now a brave developer and his associates want to turn it into a badly needed car park, with 460-odd car-parking spaces and some retail units. This would be a lovely development for a centre of town site at a time when many towns, including my town of Clonmel, are dying and cannot survive because businesses are moving out from them to new clusters on the outskirts of towns. However, planning in this case has been an issue. An Taisce and the Department of the Environment, Heritage and Local Government both took appeals to An Bord Pleanála. This process has gone on for years but, thankfully, in recent weeks the board made a decision and gave the green light. I am concerned about An Taisce's role. While it has an important role and is interested in conservation and other issues, some of its judgments, certainly in my constituency, must be questioned.
Delay will cause the loss of many projects because the process is too expensive, time-consuming and exhaustive. In many cases developers are forced to walk away. These issues arise in my own town of Clonmel with regard to major developments. An Taisce should be more up-front and have greater accessibility. Developers need to get the message immediately that a development is too large or has too much of an impact on the roads and not find this out following a series of meetings. One of the cases to which I refer comes under the remit of three local authorities, Clonmel Borough Council, South Tipperary County Council and Waterford County Council. It is a nightmare to organise and facilitate meetings, to get the people one needs at these meetings and to get the process on the road. It is costing too much, particularly for developers, is too cumbersome and is frustrating people with initiative.
I welcome the development of the new motorway. The travel time to Dublin has been significantly decreased, which is great for travellers from Cork and other areas on the route to Dublin. While I understand compulsory purchase orders are a tool that must be used, the non-payment to farmers, householders and ordinary families is an issue. While the road has been opened and the developer has been relieved of his duties, many landowners and families have been left unpaid, which is unfair. The contractor and those who worked on the road have been paid, rightly so, and the tolls are being paid by motorists travelling on the Cork section of the road, so it is not acceptable that the families who expected to be paid under CPOs have been left in a position of uncertainty.
I have an issue with transient traders. I refuse to call them Travellers. Although I have heard their various representative bodies call them Travellers, they are not Travellers but transient traders who have come in marauding gangs onto huge tracts of land on the motorway. I do not know why this land was needed and, when it was not used, it should have been given back or sold back to the landowners. We have a major problem moving these traders from place to place. They do not pay rates, I doubt they pay income tax, despite driving the finest of vehicles, and they are very intimidating.
I visited a site on Monday where a new road was built to give access to lands which had severed by the new motorway. The road was blocked and I had to ask them to move to let me through. They questioned me as to what my business was on that public road. The gardaí and the council officials do their best, to be fair, but the Roads Act 1993 will have to be strengthened. I do not know if all aspects of the current Act are being employed by the county council. We are too slow to implement the legislation because these people need to experience the full rigours of the law. They create hell for everybody living in the vicinity, they intimidate people and they are carrying out business.
The businesspeople in all of our towns and villages pay their rates and insurance, and pay their staff, and they must deal with NERA and the many other agencies dealing with health and safety, food safety and so on which ensure standards are maintained. I would sometimes question whether the standards are too high and they make it extremely expensive for businesspeople to trade. The current debate on rates is based on wrong premises as it is based on a valuation from 2005 or 2006 whereas the valuation from, say, 2000 would be more realistic. People simply cannot afford to pay the current level of rates. Different statements have been made by the different parties in recent months with regard to freezing or lowering rates but we must seriously consider this issue because many business are unable, though not unwilling, to pay. While there were minimal increases in rates this year, there are increases year on year.
It is not easy for the ratepayers, for whom I feel sorry as they are the ones in the centre of our villages and towns carrying out business in the long term. Most are indigenous, family businesses which must pay all the time even though the business is being sucked out to the new developments on the outskirts of the towns. While I welcome that a new Marks & Spencer has opened in Clonmel, this type of development is sucking the business from the main streets and leaving semi-derelict areas in the main streets. Some property developers were too greedy and bought many properties and charged too high a rent. We have to force down the cost of business and this Bill should address this area, particularly with regard to rates, by allowing for other streams of income for local authorities.
The issue of cuts by local authorities has become a big issue recently, including in my constituency where the county manager informed a council meeting on Monday last that he must achieve €5 million in cuts before the end of the year, which is draconian. We should not need to have an bord snip nua — it is a terrible name — because we should have been minding the stable before the horse bolted, or before the tiger disappeared. My issue during the first round of cuts last year was that the first staff let go by the local authority were the ground, outdoor and temporary staff, who were the people providing the services on the ground. The local authority is top-heavy, with a plethora of managers, including the county manager, the director of services and many engineers, but it is the staff working in services on the ground and in amenities who are let go.
This policy will cost more in the long run. If we have a bad winter and maintenance is not done, the roads will be significantly undermined, particularly given the effect of climate change. We have seen the result of heavy rain in Mayo and Donegal, which has caused much damage to roads. It is more foot soldiers that we need; we have all chiefs and very few Indians, if the House will pardon the pun. This is happening throughout the country. When I first joined the county council, there was a county manager, county engineer, county secretary and a range of engineers, and there is now a plethora of directors' services and their staff, most of whom got their bonuses last December in the middle of this crisis.
I pay tribute to the staff of the local authorities, who work very hard and are often criticised. The outdoor staff must deal with all kinds of situations, including some very unsavoury ones such as when the traders leave. We pay for our bins and pay our litter fines but these people leave a mess behind them. Who must look after this? It is the ordinary council workers. There are not enough of them and while they do a vital job and provide a good service, the dignity of the job is not being respected. They need to be supported and not made to accept cuts and three-day weeks and four-day weeks. Will we have the offices staffed but no staff on the ground to look after the necessary work?
Health and safety is an issue in this regard. There is no hedge cutting in south Tipperary and exiting from junctions and culs-de-sac is a danger. Health and safety has gone over the top in some areas but there are glaring anomalies and places where it is being compromised not just because of lack of resources, but also because of the management of those resources, which I seriously question. We will have to get the County and City Managers' Association back before the committees of the Houses to try to get a change of emphasis. I feel very strongly about this issue. They are making it too difficult for people to trade and stifling initiative. There is the issue of parking charges and development charges that have been introduced in recent years. I supported them because many community facilities have received a good deal of money.
I compliment those who operated the scheme within the council as well for the encouragement they gave various communities. The local communities are the real enablers and nothing would be done in the community by Government or local authorities without them. These people endure sleepless nights and establish committees limited by guarantee to organise planning and they have the vision to put in place the infrastructure.
The community development levy for recreation schemes has been an asset, which is the reason I support it. However, we now must re-examine the matter. We need clarity because there are rumours that vast sums remain in local authorities' deposit accounts. It is suggested these are from the levies paid on road, infrastructure and sewerage and water charges. The matter should be sorted out and the rumour is not appropriate but I am unsure whether it is true. It is suggested one council has a certain amount and another has yet another amount. However it is unclear if the money has been collected. If the money is available it should be spent and there is no point in leaving it holed up in a deposit account; it should be spent on the services needed. I wish the Minister well with the Bill and I commend it to the House.
I wish to share time with Deputies Breen, Shatter and either Creighton or D'Arcy. I support the concept of local charges. I was one of the self-destructive politicians that defended water charges when they were introduced in the 1990s. It is reasonable if I have a holiday home and I am supplied with services that I should be asked to pay for them. I also understand there is a gaping hole in the national finances and that it must be filled somehow.
However, as the Taoiseach has stated many times, as well as the need to stabilise the nation's finances we must also try to sustain employment and return to economic growth. My objection to the Bill stems from the proposal not only to tax those who do not pay charges but to tax those who already pay charges. In other words, it is a stealth tax on businesses and as such it is completely contrary to Government objectives. I do not wish to see any business taxed but as the Fine Gael spokesperson for tourism matters I especially do not wish to see a further burden put on the sector. As I have stated numerous times it is already subject to a crisis that no one imagined was possible. It has already lost 50,000 jobs and the promised bounce from Irish people staying at home has not materialised. People are doing exactly that, they are staying at home. They are not staying in hotels, holiday homes, or bed and breakfast accommodation.
The lead Minister for this legislation should be in the House as should the Minister for Arts, Sport and Tourism, whose job it is to champion the industry. He has been silent, sleepwalking through a disaster which is haemorrhaging jobs and closing down the tourism infrastructure. That infrastructure was painstakingly built up over many years and was aided by a significant contribution from the taxpayer.
The Minister for Arts, Sport and Tourism is either incompetent or negligent to allow yet another tax to be applied to the industry, which is collapsing without a murmur. Now that I reflect on the matter, he is probably both. I expect he will defend this tax as he has already defended the airport departure tax, which was probably one of the most incomprehensibly stupid taxes of which I have ever heard and which has been completely counterproductive. The result of the tax, apart from everything else that has taken place in the industry, is plain for all to see.
Yesterday, I met some hoteliers from Cork and from the Ceann Comhairle's constituency of Kerry South. Deputy Clune accompanied me. They told a sorry tale of 35% occupancy for major hotels. Up to three-quarters of all hotels are operating on winter season overdrafts in the middle of the high season when revenues should be pouring in. Some 40% of all hotels have been unable to play last year's rates bill. The jobs of these businesses and all the local spin-off jobs supported by tourism will be gone before the end of the years unless the Government wakes up, does something about it and tries to salvage something from what remains of this tourism season. We are already in the middle of July.
Not content with what has taken place in the hotel industry, the Government now seems determined to wipe out the self-catering holiday sector. It has displayed a complete lack of joined-up thinking because the very homes they seek to tax were, in many cases, tax incentivised in recent years or received grants at the taxpayer's expense. Although he is not present, I plead with the Minister — he may be listening somewhere — to exempt registered and listed self-catering holiday cottages from the legislation. These businesses are located almost exclusively in rural Ireland in areas where they provide the only jobs, or if not the only jobs then the support and other spin-off jobs in areas dependent on tourism and farming. For many operators, it is their only business and their livelihood, or it may supplement farm income. Whichever is the case these businesses are vital to the social and economic fabric of rural Ireland.
The sector has reported a drop in business of at least 30% this summer. It is only holding at this level because those in the sector have slashed prices. In some cases, prices have been reduced by 50% and they simply cannot afford to pass on any more charges. They already pay local charges. One operator contacted me yesterday and outlined to me that he already pays €639 per property in a variety of local charges. In addition he pays €200 per property to Fáilte Ireland to register his property and to ensure standards are maintained. He may or may not get referrals from Fáilte Ireland. A further €200 has been requested from the same Minister for a BER, building energy rating, certificate. This does not include VAT, income tax and corporation tax which must be paid to the Exchequer, quite apart from local charges.
As in the case of many of his colleagues in the same business, the operator who approached me is on a knife edge for survival. It makes no sense to push such people over the edge with a tax that will, in the long run, reduce income to the Exchequer. This tax will be the final straw for many businesses that are only barely hanging on. The season has shrunk immeasurably. Some ten or 15 years ago the season was long but now people go abroad in the winter, the season lasts only 14 weeks. The income for those working in the industry has been halved.
I do not exaggerate and I cannot over-emphasise the heartbreaking calls and e-mails to my office in recent weeks from those in the industry, upon whom it is only now beginning to dawn that the promise of salvation and of an upturn in tourist numbers during the summer will not materialise. Many face ruination. It is not simply a question of these rental properties closing down. There is also the matter of the debt attached to these properties. In many cases, operators were scarcely able to pay the interest on these but now nothing will be paid.
The banks are currently exposed to the tourism industry to the extent of €11.5 billion. Under the NAMA proposals the taxpayer would take on that debt. What is the point in putting them out of business by imposing a further tax now? The Government has far more to lose than it has to gain by introducing the tax. I understand that only €2 million would be foregone if the Minister exempted the tax from Fáilte Ireland-registered and listed properties. They already pay €200 to Fáilte Ireland. The proposal is a great incentive for businesses currently registered with Fáilte Ireland to leave the register and enter the black market which would result in further income lost to the Exchequer. I call on the Minister of State, Deputy Brady, to explain to the Minister that this will wipe out an important part of the tourism industry. It is vital he understands the damage this charge will bring about.
I welcome the opportunity to comment on the Bill. Funding for local authorities has not been addressed but a debate on that matter should take place at some stage. Many local authorities throughout the country are contemplating some very unpalatable decisions as they struggle and try to keep essential services in place, because funding from Government has been cut dramatically and, in some cases, it has dried up completely. In the constituency of Clare, the local government fund allocation from central Government was cut by €1.1 million in 2008 and there was also a direction from the Minister to cut payroll and administration costs by 3%. There are knock-on effects for each of the town councils in Kilrush, Kilkee, Ennis and Shannon who now have to cut their cloth to suit the measure of their income reduction and no matter how it is dressed up, this will have an effect on the delivery of services. I would argue that County Clare has done very badly and it is fifth from the bottom with respect to moneys received from central Government in 2008.
The moneys collected from the imposition of this €200 income charge was expected by many local authorities to be an additional income stream for them but I question whether this is the case. Will this be reflected in a further reduction in the funding from central Government? This aspect needs to be clarified.
Many local authorities are now struggling. The 2009 roads programme in Clare has been reduced by 5%. Deputy Michael McGrath referred in his contribution to the level of charges in south Tipperary. I was beginning to wonder for a while if he was a member of the Opposition and if he had made any representations to the Minister for the Environment, Heritage and Local Government. Potholes are returning in many rural roads and hedges are not being cut back on the secondary and local roads. The majority of accidents take place on secondary roads, many of which are very narrow and the overgrown hedges reduce visibility even further.
The lack of funding is also restricting the council's good work in helping older people to adapt their homes in order to address their changing needs and no new applications are being accepted for the housing aid for the elderly scheme this year. I welcome the decision by the Minister to exempt mobile homes from the €200 tax. Like every sector in this country, the tourism sector is in crisis as Deputy Mitchell outlined very well in her contribution. Hoteliers in the mid-west region are only achieving 30% to 35% occupancy in the middle of July which is their high season. Many Irish people are expected to holiday at home this year and we should not be imposing any form of tax that could jeopardise the tourism business. My county has quite a number of caravans and mobile homes, particularly in the resorts of Kilkee, Lahinch and Spanish Point. Those resorts depend on the summer influx to keep them going. I spoke to one man recently who told me that he is already up to his ears with bills and this levy was the final straw for him.
Deputy Mitchell raised a very important point about self-catering holiday cottages. This will affect my county as a €200 tax will be administered for this accommodation. Will the tax be paid by the owner or by the person renting the cottage? If it is to be paid by the owner, has the Minister considered the administrative difficulties particularly in the current crisis? These will have an adverse effect. One owner of holiday cottages told me he has no bookings for July.
I urge the Minister to consider the tourism sector. The travel tax did considerable damage to our airports and this tax will do the same to holiday cottages in our resorts.
My colleagues have voiced many valid criticisms of this Bill which I believe has been prepared with undue haste. It is being guillotined in circumstances which are highly inappropriate and which is laying the foundation for attacks on which I expect the Government to further build in the next budget. This Bill is simply providing a structure that will result in a major property tax imposition throughout the length and breadth of this country. The Government is introducing this by way of stealth to ensure the structure is in place when we get to the budget next November or December.
The Bill is riddled with anomalies that result from its poor drafting and failure to address the different circumstances that can arise and for which special provision should be made. A classic example of an anomaly in the Bill which has the potential for very odd consequences is set out in the definition section of the Bill. The Bill defines the word "buildings"as:
(i) part of a building,
(ii) a structure or erection of any kind and of any materials, or any part of that structure or erection,
I am not quite sure why it is that we have the definition of a building, an essential definition with regard to residential property in later sections of the Bill, which includes a reference to an erection of any kind or part of an erection. I have been checking this out in the Oxford Compact Dictionary which defines the word “structure” in a variety of ways:
noun 1 the arrangement of and relations between the parts of something complex. 2 a building or other object constructed from several parts. 3 the quality of being well organised.
Essentially what is intended here is a building or other object constructed from several parts.
The definition of "erection" is a building or other upright structure. It seems to me one either refers to a structure or an erection and the only difference between the two in the Oxford Compact Dictionary is that an erection is also described with regard to a certain physiological impact on the male species of certain events. I do not know what the Minister is at and I think it is deplorable he is not in the House to listen to the debate on this Bill. It is quite extraordinary, in a Bill which is seeking to impose a €200 charge, that apparently there is a need to make reference to an erection or part of an erection. What mindset produced that type of drafting? What is the reason for it? Is there some stealth impact intended by this tax, with a short amendment to this Bill at a later stage if not this evening, or some further amending piece of legislation? Is there some sort of activity that the Minister has in mind on which he wishes to impose a €200 charge? I do not know.
This is a serious Bill but in a serious Bill it is an example of bad drafting. I know this type of phraseology has been used in conveyancing circumstances — and the Ceann Comhairle, as a former solicitor, will be aware of this — to deal with certain building issues that can arise but why in the name of God are we referring here to structures or erections? I simply do not understand it. This could only be a Bill that is rushed out by a Minister who has completely lost all sense of proportion that it would be so poorly and badly drafted and contain a reference of a nature that I think would surprise many people outside this House.
If there is this sort of difficulty with this Bill, there are other hidden flaws in the Bill that need to be addressed. Clearly the erection reference should be deleted. I think the Minister should explain how such an nonsensical provision could be included in a Bill sponsored by his Department and supported by the Government. The very fact that it includes this definition should ring the alarm bells to indicate there are other flaws in this legislation, that it should not be guillotined through this House and that there are other more serious issues that need to be addressed and amendments included to cover, for example, the issue of granny flats, about which there has been so much discussion so far.
This Bill makes it obvious that local authorities throughout the country are starved of money. For too long they were completely dependent on development levies. There is a peculiar anomaly that many local authorities are running overdrafts of millions of euro and paying significant interest to the banks yet have development funds worth millions of euro. This is a crazy scenario which has been allowed to happen and it should be addressed. I am pleased the Minister has seen sense and has exempted mobile homes. My area of north Wexford has perhaps more mobile homes than most and the area will be well known to the Minister. The benefit of the mobile home is that people will come and spend money in the local towns. The weather is not good and they are not going to the beaches. They are in the towns and are spending some money, and that is a major benefit.
The Minister must remove the Bord Fáilte registered properties. We must not beat about the bush or talk about it for much longer. They should be taken out and allow the matter be dealt with finally. Everyone in this Chamber is at one on that issue. If we do not take them out we will further impact on our tourist sector, which is already in enough difficulty.
I want to raise two other aspects. The current unemployment level has the capacity to do serious damage. We can charge people who want to holiday in Ireland this rate of €200 by not removing the people with Bord Fáilte registered properties or we can decide not to charge them. If we charge it, the people will not go into towns and spend money in the shops where VAT is collected and people are employed. Those people are essential. If we charge this rate we will have another 150,000 unemployed before the end of this year.
Another important point is that this money will not be easily collected. There will not be an easy method of collecting it. I can envisage every tax avoidance measure being put in place to ensure people do not pay this €200 charge, including properties being put into the names of husbands and wives and only one property owned. That is something we must deal with also. I would like to discuss many other aspects but unfortunately time does not allow me to do that.
I wish to share my time with Deputy John McGuinness.
Agreed.
I am grateful for the opportunity to contribute to this debate. Many of us in this House have served in local government from time to time and we realise the importance local government plays in everybody's lives. It is important that we have a debate on these charges, and a wider debate on the funding of local government would be welcome also.
Our local authorities have core functions to do with planning, roads, sewerage infrastructure, environment, community and enterprise. Throughout those core functions they have many revenue raising streams which the public have to contribute to on an almost daily basis but the most controversial one which causes people concern is commercial rates. Any of us who have been involved in a budget estimates process in a local authority will be aware that the rate struck by a local authority is the balancing figure. We have come to a position here where the small and medium businesses, and the larger businesses, are being levied with onerous commercial rates by local authorities. We must undertake a fundamental review of that because we have a serious competitiveness issue in addition to increasing joblessness and businesses closing down. The local authorities pursue the collection of outstanding rates, which they are mandated to do through legislation, in an aggressive fashion.
The chairman of the Revenue Commissioners recently outlined a policy, which is welcome, in which they are open to negotiation in terms of tax collection from companies and businesses that owe taxes. They are open to collecting payments over a scheduled period. On the question of commercial rates, business people tell us there is an issue that we must address it at some point.
On planning, local authorities have gathered a great deal of money through the local authority development funds. Recently, those funds were practically frozen. The balance on those development funds is taken into the overall Government cash balance calculation at the end of the year. That is regrettable. Certainly, in my constituency basic community facilities such as playgrounds which were approved for areas such as Bruff and Kilfinnan, are now held up. In my local authority, for example, there is approximately €25 million sitting in the bank that cannot be spent. That is why we need a full debate on this issue.
The lack of sewerage infrastructure is holding up development across my constituency. We allowed a ridiculous situation arise in recent years where consultants' documents, engineers' documents and so on flowed between local authorities and the Department of the Environment, Heritage and Local Government. The process would go from one stage to the next stage, come back for another report and 12 years later there is still no sewerage scheme in place. I have one such situation in my home village of Patrickswell. Development is held up. Planning permission is conditional on sewerage upgrades and it is stymying everything. The Department of the Environment, Heritage and Local Government must seriously examine that issue.
The €200 charge is a mechanism for raising revenue. I appreciate that we must raise taxes to run the country and provide the services but on the €200 charge a number of issues have been brought to my attention, particularly in terms of my constituency. We are unique in Rathkeale in that we have a large Traveller community which is not comparable to Traveller communities in other areas of the country. They are business people, effectively, but they live in large demountable houses or mobile homes on their own properties beside a house, which they own. The house is boarded up and used to store the tools of their trade, including furniture and whatever they need to lay tarmacadam on roads. It begs the question whether the €200 will be levied on the storage, which is a dwelling, or on the mobile home or the demountable.
A situation arises also where people, because of their social circumstances, are living in a house but they have a mobile home or a demountable, which is not mobile, on the property or premises which is used by other members of the family because the house, for whatever reason, has not been extended or does not have enough room. We must clarify the position on that.
There has been a great deal of debate about the an bord snip nua report and the review of all the State agencies. We need to examine all our local authorities. A debate is ongoing in Limerick as to whether we should have a boundary extension from the Limerick City Council administrative area into the county. We have all those issues; we have duplication; we have local authority managers and directors of services. All of that has grown out of Better Local Government. All of that must go under the microscope.
On the €200 charge, there are some items I would like to see clarified but I appreciate we have to raise taxes to provide the public services.
There has never been a time in the history of the State when people were more geared towards reform of one kind or another and addressing all the outstanding issues we might have tolerated in a time of plenty. In a time when there is far less there should be this type of reform and people would accept it, provided we set out our stall and explain to them where we are going, how much it will cost to get there and the timeframe. That leadership is now more necessary than ever.
A more extensive Bill dealing with reform of local government would have been a welcome development. The report of an bord snip nua became available today. Perhaps it is time to look at outstanding matters and at where reform is necessary. Having listened to Members who have experience of local authorities, it is obvious that the demand for reform of the local government system is more relevant and more necessary than ever. The Better Local Government package, which is in place, is not working.
I understand that Fine Gael accepts the Bill in principle. This change needs to be made. I accept the argument about self-catering holiday homes. The Bill will be passed and the charge will be applied. It is essential that we establish how the amount will be increased and ensure that it will not be substantially increased automatically year by year. It will be applied to every home and will affect those people who own their homes.
We need to examine the entire rates system. In a previous debate, I referred to the valuation system. Businesses are paying rates on valuations established at the high end of the market. They are unable to pay the rate. New businesses which are paying on that higher valuation will run into serious difficulty in the course of this year. While we debate competitiveness in the economy, we cannot overlook the fact that some competitive difficulties come from our local government system. We need to examine the cost of making a planning application. What fees and charges are applied after the application is made, how do businesses develop thereafter and how are rates applied? There is a need to radically overhaul local government because local government charges affect our competitiveness, and this is a way of doing it.
I encourage new local authority members to examine local government charges in a new light, bearing in mind the current economic circumstances. If wages and other costs are tumbling there is no reason rates cannot be looked at in the same way. Why should they not come down? They are just another cost. They bridge the gap between what is needed in local authorities but they are applied to the smaller and smaller number of people who are in business. As councils examine their costs, we should force the debate forward by ensuring they examine how their rates are struck.
The Minister said the election of a mayor of Dublin would capture the imaginations of people. The election of mayors throughout the country captured people's imaginations but it is not understood that when they are elected they have very little power within their local authorities. If power is to be moved from central government we should give substantial power to each local authority and ensure the mayor is allowed to function independently and to drive a local economic, social and political agenda. That thinking can be applied to the mayor of Dublin and to any elected mayor. Instead of that, we are tying down mayors with bureaucratic red tape which prevents them from acting in the interests of the people and from driving the local economy. That can be easily changed. I have heard many ideas expressed during this debate which could be considered by the Minister in the context of local government reform. Regardless of what side of the House they came from, these ideas should be considered in the context of a Bill which would truly reform local authorities and give them the ability to raise funds locally, to adjust their funding or to deal with local issues.
As local authorities see their funds reduced and their ability to raise funds affected by the economic situation, the first to be hit is the person at the front line delivering services. Roads are not swept and services are not delivered to local communities. That needs to be examined. A balance must be struck between the delivery of services and giving value for money. The only way to strike that balance is to put the complete onus on the local authority to raise its own funding. Some funding must come from central government but local authorities must be given the authority and power to make real decisions at local level. Otherwise this House will become a local authority or a general council of county councils discussing local issues. A large number of Members contributed to this debate and the issues they raised were local authority issues.
We should not be afraid to reform local government. If that is not going to happen soon, we must find a way in the short term to give real powers to the mayors and chairmen of county councils so they can reflect the views of their electors. At present, members of local authorities and strategic policy committees simply sign off on the reports of managers or engineers. People are fed up with that process. They want to see real democracy and they look to this Government to deliver real change and to give local democracy real meaning.
In these changed times, we should not be afraid to bring forward legislation, even if it must come under the heading of emergency legislation, to enforce the views of the Members of both sides of this House. We are all demanding the same thing, which is change in local government.
I fought hard against the ending of the dual mandate, which was a bad step for local democracy. Most members of local councils now say that since the Oireachtas Members were removed from the authorities they have less power and less information. When we were members of local authorities there was direct communication between central and local government and we kept our local government colleagues informed. That communication must be strengthened so that local authority members are empowered to make real decisions for themselves. It should not be a simple matter of how the county manager sees things or what he thinks needs to be done.
The same business people are called upon repeatedly to raise money. I understand there are more than 1,000 local authority houses empty in Dublin. A similar number of houses are empty and boarded up throughout the country. These houses could have been allocated when the previous tenants vacated them. They are well kept houses in the housing stock of local authorities but when tenants left they were simply boarded up. Some have been vandalised and will cost a fortune to repair. We are standing over this failure and continually giving local authorities money to refurbish houses. The figure of 1,000 empty houses in Dublin is not inaccurate. Similar numbers of houses are empty throughout the country. Some action must be taken in that regard. The more money lost by not collecting rent the more must be imposed in rates, an imposition on the business people of the country. That is an unfair method of taxation.
We will create new taxes in the coming budget and we must examine the report of an bord snip nua. The board must do a full report, including a report on local authorities. If necessary, Mr. Colm McCarthy should be asked to investigate local authorities and the HSE and begin to give taxpayers real value for money. I urge the Minister for Finance to publish the report of an bord snip so that we can have a full debate on the report in the House, as we lead into the budgetary process.
Is Deputy Burke sharing his time with Deputy Connaughton?
The Deputy has indicated that he will not avail of the time.
Earlier this afternoon, the Minister's colleague stated, "A properly resourced local government sector is vital to local democracy". When we take into consideration this, and the Bill's capacity to raise funds for proper local democracy, we are left with hastily produced legislation. The greatest fault of those who have contributed to it is the uncertainty and lack of real decision making. All that can be said about the Bill is that it seems to be the first short step towards the reintroduction of domestic property rates.
Deputy McGuinness discussed the need for local government reform. Has he forgotten that a Fianna Fáil Government was responsible for the abolition of rates or that his and another party were responsible for what was termed better local government? Throughout the country, our local government is in crisis due to a shortage of money. Regarding the Bill's potential to collect money, there is no clarity on the way in which money will be collected and given to local authorities. There are four suggestions regarding payment methods, how it will be identified and who is to declare a liability of payment to local authorities. In contrast with the Bill's provisions, the Department failed to legislate for a register of landlords. It missed its opportunity to identify landlords. That vague step was never implemented properly. Now, more legislation is coming down the same line.
Almost every local authority and every contributor to this debate has indicated serious cutbacks in local government funding. Galway County Council was notified only a few weeks ago of a cutback amounting to €10 million in its allocation. How can a local authority continue to deliver services when such cutbacks are being implemented? The Bill will do nothing to shore up the shortage.
What is the cost of implementing the collection of the funds? There is no indication of the cost. We have been given an estimate of what it might yield in light of the 700,000 residents who might be liable for the tax. The Bill comes at a time when local authorities have needed to shed employment due to cutbacks. People on short-term contracts have lost out and many talented people have lost their jobs. The collection will incur serious costs, yet nothing has been allocated to retrieve them.
I will not indulge in previously mentioned definitions, but that of a vacant property is vague. No one knows what is a vacancy. How long must a house be vacant before it can be classified as being liable for the charge? This is an important matter. Our spokesman, Deputy Hogan, has clearly indicated the greatest concern for many people, namely, granny flats vacated by elderly people who are temporarily in nursing homes. The Minister must clarify these points as matters of urgency.
The Deputy's time has expired.
I hope the Minister will clarify the many concerns expressed by Deputies.
I thank Deputies for their thoughtful contributions on the Bill. Its purpose is to give effect to the Government's budgetary decision to introduce an annual charge on non-principal private residences. The Bill sets the charge at a level of €200 and it will be payable, in the main, by owners of rental, holiday and vacant properties. The proceeds from the charge will provide a new source of income to city and county councils and the budgetary estimate of the annual revenue stream was €40 million. Experience of the operation of the charge will be the best guide to the actual revenue generated.
To revert to Deputy Burke, we are confident that, since we have incentivised local authorities to collect the charge, they will do so efficiently and effectively. In my conversations with local authority managers, who are enthusiastic about the provision, they——
As a first step.
——assured me this is a good way to raise revenue.
The Bill is important because it gives effect to a new locally based income source for local authorities, the first in many decades. While the amount of income is modest in the context of local authority overall revenue expenditures, it will nevertheless broaden authorities' revenue sources and reduce their dependence on finance from central government. Over the years, there have been many calls for a new locally based source of local government funding to be introduced and I believe the introduction of the new charge through this Bill is positive. It has been broadly welcomed by the Opposition.
It has been stated that the ideal taxation measure is equitable, simple and flexible. The Local Government (Charges) Bill scores well under the criteria of simplicity and flexibility. It is simple and cost effective to administer and understanding and complying with it will be simple. It will generate revenue on a continuing basis and will not be subject to the volatility we have come to associate with transaction-based property taxes. In this sense, it has the flexibility to cope with varying economic conditions while maintaining a stable yield. It must be acknowledged that the Bill does not include a valuation-based component, something that would make the system more complex and difficult to administer and comply with, as mentioned by a previous speaker. As against this, the amount of the charge is relatively modest at €200 and should not cause those liable to pay it any great difficulty. For these reasons, I hope Deputies from all sides of the House can support the passage of the Bill.
I will refer to some of the points raised. As they primarily relate to issues that will arise on Committee Stage, I am reluctant to address them on this Stage. However, my amendment will put beyond doubt the availability of an exemption from the charge for granny flats and persons vacating their homes due to incapacitation arising from mental or physical ill health. People in those circumstances are different from the general run of owners of non-principal private residences.
I wish to comment on the points made by Deputy McGuinness. He has since left the Chamber, but I share his interest in local government reform. For too long, that area has been stagnating. If we are to examine seriously the issue of the dual mandate, which the Deputy raised, we must examine electoral reform. We all know that Deputies compete with up-and-coming councillors. We send out the same sorts of letter assuring people that the drains have been cleaned and the potholes have been fixed. One must wonder whether this is a role for national legislators. Electoral reform at a national level goes hand in hand with local government reform. We must have a serious debate on reform of the Dáil, the Seanad and local government.
I want to go further and consider broadening the revenue base. I will be able to do so more thoroughly once the Commission on Taxation has reported. We will be able to determine in greater detail how we can raise money at local authority level. Bearing in mind that there is a Sinn Féin amendment in this area tabled for Committee Stage, I want to consider empowering the local authorities to set the levels and examine the scope of charges. This is what real local government is about. I agree with Deputy McGuinness in this regard.
I thank the Deputies opposite and those on the Government side. Second Stage has given rise to some interesting debate, which I want to continue on Committee Stage.
Question put and agreed to.