Financial Resolution No. 2: Excise (Mineral Oil).

Tánaiste and Minister for Enterprise, Trade and Employment (Deputy Mary Coughlan)

I move:

(1) THAT the Finance Act 1999 (No. 2 of 1999) be amended with effect as on and from 10 December 2009—

(a) for the purposes of the tax charged by virtue of section 95 of that Act, by substituting the following for Schedule 2 to that Act (as amended by section 15(a) of the Finance Act 2009 (No. 12 of 2009)):

"SCHEDULE 2 - Rates of Mineral Oil Tax
Description of Mineral Oil	Rate of Tax
Light Oil:
Petrol	€543.17 per 1,000 litres
Aviation gasoline	€543.17 per 1,000 litres

Heavy Oil:
Used as a propellant	€449.18 per 1,000 litres
Used for air navigation	€449.18 per 1,000 litres
Used for private pleasure navigation	€449.18 per 1,000 litres
Kerosene used other than as a propellant	€00.00
Fuel oil	€14.78 per 1,000 litres
Other heavy oil	€47.36 per 1,000 litres

Liquefied Petroleum Gas:
Used as a propellant	€63.59 per 1,000 litres
Other liquefied petroleum gas	€00.00

Coal:
For business use	€4.18 per tonne
For other use	€8.36 per tonne

",

(b) by inserting the following after Schedule 2:

"SCHEDULE 2A - Carbon Charge
Description of Mineral Oil	Rate
Light Oil:
Petrol	€34.38 per 1,000 litres
Aviation gasoline	€34.38 per 1,000 litres
Heavy Oil:
Used as a propellant	€39.98 per 1,000 litres
Used for air navigation	€39.98 per 1,000 litres
Used for private pleasure navigation	€39.98 per 1,000 litres

",

(c) in section 96 —

(i) by inserting the following after subsection (1):

"(1A) Where a rate is specified in Schedule 2A for any description of mineral oil, that rate, referred to in this Chapter as the "carbon charge", is included in the rate of tax specified in Schedule 2 for that description of mineral oil.”,

(ii) by inserting the following after subsection (4):

"(5) The Commissioners may, subject to such conditions for securing the mineral oil tax as they may prescribe or otherwise impose, permit payment of the carbon charge to be deferred to a day not later than the 15th day of the month succeeding the month in which the mineral oil tax is payable.",

(d) in section 100, by inserting the following after subsection (1):

"(IA) (a) Without prejudice to any other relief that may apply and subject to subsection (b), a relief from the carbon charge shall apply to biofuel.

(b) Where biofuel has been mixed or blended with any other mineral oil, the relief under paragraph (a) shall only apply where the biofuel content of the mixture or blend exceeds 10% of the total volume of the mixture or blend.".

(2) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

This resolution provides, with effect from midnight tonight, for a carbon charge to be included in the rates of mineral oil tax on petrol and auto-diesel. This additional charge, when VAT is included, amounts to just over 4 cent on a litre of petrol and just over 4 and a half cent on a litre of diesel.

The carbon charge is also applied to the rate for aviation gasoline, which is aligned to the petrol rate, and the rates for heavy oil used for recreational flying and boating, which are aligned to the auto-diesel rate. These carbon charges are equivalent to €15 per tonne of CO2 emitted. The resolution also provides for a relief from the carbon charges for bio-fuels, and for bio-fuel in auto-fuel blends, where the bio-fuel content of the blend accounts for more than 10% of the total volume.

This is an important first step in delivering on the commitment to a carbon tax in the programme for Government. The Minister for Finance will bring forward proposals in the finance Bill to apply carbon charges on the same basis to the non-auto mineral oils with effect from 1 May 2010. The Minister also proposes to introduce a new carbon tax on natural gas from that date, and a carbon tax on coal and commercial peat later in the year.

These carbon charges will also be on the basis of €15 per tonne of CO2, and they will be calculated in accordance with the CO2 emissions factors for the various energy products, so that they are in proportion to the quantity of CO2 released when those energy products are combusted. These emissions factors are provided by the Environmental Protection Agency.

As carbon dioxide emissions from certain industrial sectors are already regulated under the EU emissions trading scheme, a relief from the carbon tax charge is proposed for energy products used in installations that are covered by a greenhouse gas emissions permit. The yield from carbon tax for all energy products is expected to be approximately €250 million in 2010, and €330 million in a full year. The impact on the CPI is estimated at around 0.25% in 2010 and approximately 0.35% in a full year.

Deputy Enda Kenny

For quite some time Fine Gael has set out its view on support for a carbon tax. The beauty of contrast is that this party produced its budget perspective last Friday, which included use of revenue from a carbon tax to provide incentives and opportunities for employers to create employment and to hold on to existing jobs by the reduction of PRSI at the 20% and 50% levels.

Fine Gael's budget perspective set out to put a fair price on dirty fuels to support domestic renewable energy sources and jobs. Deputy Coveney put forward Fine Gael's proposal for an economic recovery authority dealing with an €18 billion jobs stimulus, part of which would be made up of revenue from carbon tax. There would be a two year exemption on solid fuels, that is, coal and turf, because they are used by elderly people and on agricultural diesel for farmers. It is remiss of the Government not to understand there has been a 28% drop in farmers' incomes this year. It has been an absolute disaster and it follows an 11% drop in incomes last year. The exemption from carbon tax on agricultural diesel is an important matter in an industry that has literally been washed away in some parts of the country this year. It also included use of a windfall tax on power generators.

The Fine Gael proposal was to use revenue from the carbon tax in a revenue-neutral sense to protect jobs, create new jobs and make it easier for employers to take on employees. The budget, about which I will speak tomorrow, does not deal with that to any great extent.

I support the principle of retrofit for houses. One should examine the time and cost structure of the way it is done with Sustainable Energy Ireland. Applications forms are filled in, processed, analysed and eventually payment is made. The problem is people will not want to borrow €25,000 or €30,000 in order to do that insulation work. Unless people are burning three or four tanks of heating oil per year, it will not be worth their while to do this. In other countries, this work is done by companies at no charge to the occupant of the house. The value for the company doing the work is in keeping the saving in the energy costs as a consequence. The Minister will be aware this is a very successful scheme in a number of countries. We should consider that.

We support the principle of a carbon tax and have said so for a long time but we do not support the way in which the Government is going about it. I do not support the fact solid fuel has not been exempted. The Minister, Deputy Gormley, can shake his head if he wishes.

Deputy John Gormley

That is a cop out.

Deputy Bernard Allen

The Minister is a good man to talk about a cop out.

Deputy Enda Kenny

That is fine until he goes to his——

Deputy Enda Kenny

The Minister can count the frogs and the hen harriers.

Deputy Terence Flanagan

There are no farmers in his constituency.

Deputy Enda Kenny

The Minister should go to the pensioners——

An Ceann Comhairle

Could we refrain from speaking across the floor? The Deputy is moving away from the issue.

Deputy Enda Kenny

——-and to the blind pensioners who will be hit by the carbon tax on solid fuels. All they have is the bag of turf, the bale of briquettes or the bag of coal which, I might add, is being hawked about on every street corner with a higher sulphur content than the Minister would like. It is coming into the country by various means and receipts show it is being sold as horse feed and so on because of the scams going on. The Minister is not doing anything about that.

An Ceann Comhairle

The Deputy should keep to the resolution.

Deputy Enda Kenny

I support the principle of a carbon tax but not the way it is being done. The Minister did not even have the courtesy to speak to Opposition members about the way he intended to implement it. I support the principle of a carbon tax but not the way it is intended to implement it.

Deputy Michael Creed

It will be easier to count snails than Green Party members after the next election.

Deputy Liz McManus

The Labour Party supports a carbon tax. We have argued for it and presented the case in various policy documents. We have been clear and unequivocal. Therefore, it is most regrettable that what was presented in this budget is a carbon tax which will not protect the poor and tackle climate change and the big polluters. It is a disgraceful carbon tax. In particular, it is a disgrace when one considers that Green Party Ministers are in government to pursue an agenda which is crucially important for the existence of this planet and the people living on it. What we have been presented with is shameful and we cannot support it.

Deputy John Gormley

The Deputy would never support it.

Deputy Liz McManus

I would have a little modesty if I was the Minister, especially when one looks at the scam he has perpetrated with his 5% reduction in ministerial pay. A cleaner in his Department will face a 5% reduction——

An Ceann Comhairle

I ask Deputy McManus not to move away from the resolution.

Deputy Liz McManus

I was interrupted by a Minister who has no shame——

An Ceann Comhairle

I will ask him to desist from dong so.

Deputy Liz McManus

——when it comes to representing the principles of his party. I will represent the principles of his party.

Deputy Michael D. Higgins

The Deputy is quite right.

Deputy Liz McManus

I would like to have the chance to do so now.

Carbon tax must be dedicated to dealing with the issues relating to fuel poverty, climate change and tackling the big polluters. Regrettably, this carbon tax does none of those things.

Fuel poverty is a really important issue which must be tackled. All we got in the Budget Statement was that there will be some kind of vouched system some time in the future to protect the poor. I do not believe that nor do I believe an awful lot this Government says. We must have measures which are quantifiable and deal with the core issue of the cost of fuel for people living in low grade, substandard and poorly insulated housing, who are on very low incomes and who cannot afford the bald increases set out in the budget.

We need a retrofit scheme that is imaginative and is of a scale that matches the challenge. There are 1.2 million houses in this country that need retrofitting. We could employ 30,000 construction workers in an area in which they are skilled and using resources with which we are familiar, including internal or external insulation or whatever. That is not being done. We are getting more of the same.

We are getting a little top up essentially on the existing schemes which are operated through Sustainable Energy Ireland. Good luck to anybody who can avail of them. However, this is not the retrofit scheme we need. I believe I heard the Minister for Finance indicate that it will take until 2025 before all houses are done. He should get real. One of the few things we can do to tackle climate change which would be really effective would be to bring energy efficiency to the highest level possible. That means retrofitting buildings until we can retrofit no more and then hope further technology emerges quickly so we can retrofit more. It could have been done.

The road map was set out in research done by Joseph Curtin who showed exactly how it could be done. The Labour Party adopted that particular plan because it was so good, and I make no bones about it. It was a "pay as you save" scheme through one's utility bill. It could have unlocked private money in bank accounts. People are afraid to spend money but they would spend it if they were assisted in making their homes energy efficient.

What we got instead was a fig leaf for the Green Party when we are running out of time. This Minister will not produce the heads of a Bill on climate change as he sets out for Copenhagen.

Deputy John Gormley

I can come up with them. They will be better than the Deputy's.

Deputy Michael D. Higgins

Here we go again.

Deputy Liz McManus

This is not a game or a competition.

Deputy Simon Coveney

The Minister should not be too smug.

Deputy Liz McManus

We have all-party support for a Bill that has already had an outline published.

Deputy Bernard Allen

The Minister is running out of time.

Deputy John Gormley

That is not even the heads of a Bill.

Deputy Liz McManus

The Minister has blown it anyway. He is going to Copenhagen without having done anything to ensure the message goes out from Ireland that we will have a decent carbon tax, climate change legislation and we are playing our part in meeting the greatest challenge of our generation.

My last point relates to the big polluters. Even Friends of the Earth Ireland, who are friends with the Green Party, have said we must deal with the big polluters.

Deputy Joe Costello

The Minister is spinning already.

Deputy Liz McManus

Friends of the Earth state:

It is lamentable that the Government plans to exempt big polluters from the carbon tax. They will tell you it is because these companies face a carbon price through the European ETS.

Deputy John Gormley

Exactly.

Deputy Liz McManus

It continues:

In fact, we all know they got almost all their pollution permits for free. That did not stop them raising prices to customers to reflect the market value of the permits. Until they have to buy the permits at auction, they should pay the carbon tax like everyone else.

Deputy Michael D. Higgins

Hear, hear.

Deputy Liz McManus

To do so would mean the Government has to take on the big, rich and powerful. The trademark of this budget, through every line, is that the rich will get off the hook. It is the cleaner in the Minister for the Environment, Heritage and Local Government's Department who is paying the price while the Minister is getting off almost scot free.

Deputy Thomas P. Broughan

Hear, hear. It is shocking.

Deputy Arthur Morgan

If a carbon tax Bill came before this House, my party would support it completely. Unfortunately, this is not a carbon tax but rather a revenue-raising measure. It has nothing whatever to do with saving the planet. This measure will hit low-income families disproportionately and in many cases, pensioners will have a choice between heat and food. If this were a real carbon tax, incentives would have been put in place to try to persuade people to use alternative measures.

For example, this will be a significant financial imposition on rural dwellers as they have no public transport. Every time they get into their cars to travel to the city or work, they will pay additional money to this revenue-raising measure which has nothing to do with carbon. It is a Green Party cop-out. If there is a fig leaf, it is pretty withered and would hide very little behind it at this stage.

It is most unfortunate that the Greens are using this opportunity in Government to fool the public by presenting this as a carbon tax. It is just a tax and I will be opposing it.

Minister for Communications, Energy and Natural Resources (Deputy Eamon Ryan)

Carbon tax has been considered for a long time. We have an advantage in that regard as there has been much economic analysis and study on it. The best analysis was done by the ESRI, which had a fairly clear and simple message as to how to go about this. It indicated that the price should be matched to the European emission trading system, ETS, price. The European system has been set up and without us changing Europe, it is difficult for us to change that system. We have matched it to the ETS price as it is approximately €15 in that system.

The ESRI also indicated that the money should be spent in four areas, as it would be advantageous to the economy if the money was recycled in a number of areas. The first is energy efficiency measures. I remember five years ago, before Joseph Curtin came up with his very good ideas, coming before the Oireachtas committee and saying what exactly we had to do. I am very glad we have been able, in Government, to implement the plans we have had for five years.

Deputy Liz McManus

That is pathetic.

Deputy Eamon Ryan

It is not pathetic. I will give an example of the scale of ambition compared to other countries. President Obama has spent approximately $400 million as a stimulus for retrofitting.

Deputy John Perry

This is Ireland.

Deputy Liz McManus

That is America.

Deputy Eamon Ryan

We are spending €130 million next year. We are not as big as the United States but that is a fair percentage in comparison. We will not stop there. We are going to 100,000 houses per year and we will meet the public sector buildings targets, which equate to a third of an improvement in energy efficiency in the next ten years. That will require massive retrofitting.

Deputy Liz McManus

The target is 2025.

Deputy Enda Kenny

Who will lend the money?

Deputy Eamon Ryan

The €130 million — which the ESRI has indicated we should put back into the economy — is real.

Deputy Enda Kenny

The banks will not give people the money.

Deputy Eamon Ryan

Half of that is for social housing to keep the poorer people in our country warm and healthy.

Deputy Enda Kenny

May I ask the Minister a question?

Deputy Eamon Ryan

The second indication from the ESRI on a carbon tax——

Deputy Enda Kenny

May I ask the Minister something?

Deputy Eamon Ryan

——is that revenue should be used——

Deputy Enda Kenny

If the average cost——

Deputy Eamon Ryan

I want to finish my point. The revenue should be used to reduce labour taxes——

Deputy Enda Kenny

——is €15,000 or €20,000, people will not get it from the banks in the first place.

Deputy Eamon Ryan

——so that we end up taxing the bad and not the good.

Deputy Enda Kenny

The Minister will not listen.

Deputy Eamon Ryan

The revenue we are raising from a carbon tax would allow the Minister for Finance to reduce PRSI for people coming off the dole. It is exactly as the ESRI recommended. The ESRI also recommended that VAT should be reduced and we have again done that with some of the carbon revenue raised.

Deputy Kieran O’Donnell

That will not happen until 1 January.

Deputy Enda Kenny

May I ask another question?

Deputy Eamon Ryan

Finally, with regard to protecting those on lower income, the Minister for Finance has given a commitment to introduce the initiative on solid fuels and other heating oils, the fuel allowance will be increased on a vouched basis to cover the cost so those in fuel poverty will not be affected.

Deputy Aengus Ó Snodaigh

That should have been done in the first instance.

Deputy Eamon Ryan

In any rational analysis of the best economic advice we have had for ten years in advance of this, we can check if we have done what economists believe we should. We have invested in energy efficiency that is leading the world.

Deputy Liz McManus

It will be by 2025.

Deputy Eamon Ryan

We have invested in reductions in labour taxes, which it was argued we should, and we have reduced VAT with some of the revenues, as it was indicated we should. We will protect those in fuel poverty.

Deputy Enda Kenny

May I ask the Minister a question?

Deputy Eamon Ryan

Does the Deputy have a question?

Deputy Enda Kenny

Yes.

Deputy Eamon Ryan

If the representatives going to Copenhagen are serious about climate change——

Deputy Enda Kenny

Yes, they are.

Deputy Eamon Ryan

——they cannot stand here today and say "No" to putting a price on carbon.

Deputy Simon Coveney

We will not stay here to be lectured by the Minister.

Deputy Enda Kenny

They are not doing so.

Deputy John Gormley

They are.

Deputy Eamon Ryan

That is a dishonest approach that shows the party does not have an environmental objective in its message.

Deputy Simon Coveney

I will not take a lecture from the Minister.

Deputy Eamon Ryan

It shows the party is treating this as a political issue rather than as a policy.

An Ceann Comhairle

Deputy Kenny.

Deputy Enda Kenny

The Minister seems to know all the answers. If a constituent, Mr. John Gormley, lives in a semi-detached house and gets an estimate of what it will cost to retrofit the house at €25,000, he will not get it from the bank and he will not want to borrow the money. What he will get under the SEI will not cover it.

Deputy John Gormley

Is this a point of order? What is this?

Deputy Enda Kenny

Explain that.

Deputy Simon Coveney

He is responding to the Minister.

Deputy Bernard Allen

The Minister will be voting on this issue.

Deputy Eamon Ryan

We are in the process of developing our insulation schemes.

Deputy Enda Kenny

The Government is going the wrong way about doing it.

Deputy Eamon Ryan

As I have signalled quite often——

Deputy Terence Flanagan

How will they work?

Deputy Eamon Ryan

There will be an obligation on our utility companies to do that work.

Deputy Simon Coveney

How?

Deputy Bernard Allen

That is hot air.

Deputy Eamon Ryan

We will introduce a save-as-you-pay scheme. The up-front cost will be carried by the utility company and the work will be paid off as the person saves.

Deputy Bernard Allen

What does the Minister mean by "as the person saves"?

Deputy Eamon Ryan

This is the best investment anyone can make. We went into 30,000 houses this year where people are noticing the benefit. We will double that next year and the year after. It is that ambition that is driving us to introduce this carbon tax in order to gain revenue that will help cut emissions and tackle climate change. Voting against it is a shameful vote in that regard and colours the position of the Opposition as it goes to Copenhagen.

Deputy Bernard Allen

That is a load of hot air.

Deputy Michael Ring

It does not.

Deputy John Gormley

It does.

Deputy Terence Flanagan

There is a reasonable question.

Deputy Enda Kenny

I resent that nonsense.

An Ceann Comhairle

The Deputy has already contributed. I will try to allow him speak again later.

Deputy Enda Kenny

The Minister said to the Shell people in Ballinaboy that it should not go ahead.

Deputy Eamon Ryan

Every analysis on the price of carbon——

Deputy Enda Kenny

You were down there——

An Ceann Comhairle

I ask the Minister and the Deputy to address their remarks through the Chair.

Deputy Enda Kenny

I will. If this Minister decides——

An Ceann Comhairle

Otherwise we will have serious disorder in the House.

Deputy Simon Coveney

The Minister has a responsibility to get this right——

Deputy Enda Kenny

——to come in here and call the rest of us hypocrites——

Deputy Simon Coveney

——and not be guided by ideologies.

Deputy Eamon Ryan

The Deputy is not a spokesperson——

Deputy Enda Kenny

The Minister stood at the gates of the terminal at Ballinaboy and said——

An Ceann Comhairle

Deputy Kenny.

Deputy Enda Kenny

——it should not go ahead. It had to go ahead.

An Ceann Comhairle

We must speak to the resolution and not something extraneous to it.

Deputy Enda Kenny

I will not take that nonsense from the Minister, Deputy Ryan.

Deputy Bernard Allen

It is a lot of hot air.

An Ceann Comhairle

I call Deputy Sherlock.

Deputy John Gormley

It is the truth.

Deputy Enda Kenny

I will not put up with it.

Deputy Pat Rabbitte

Does Fianna Fáil go along with any of this?

Deputy Mary Coughlan

We are going along with the rules of the House.

Deputy Seán Sherlock

It is a bit surreal to see——

Deputy Bernard Allen

They are more Fianna Fáil than Fianna Fáil themselves.

An Ceann Comhairle

I remind Deputies that our time is limited for this debate.

Deputy Seán Sherlock

——Fianna Fáil so silent on this matter.

Deputy Michael Ring

I have never heard Deputy O'Dea so quiet.

Deputy Willie O’Dea

I am nearly asleep.

Deputy Enda Kenny

We have heard the Minister for Communications, Energy and Natural Resources down the west on many occasions.

Deputy Eamon Ryan

If the Deputy believes in tackling climate change, he should vote "Yes" for this tax.

Deputy Enda Kenny

Yes, I believe in climate change.

Deputy Michael Ring

The Green Party is banging on about climate change. The US is destroying the world.

Deputy John Gormley

The Deputy should keep saying that.

An Ceann Comhairle

I ask Members to have some respect for the House.

Deputy Michael Ring

All the Green Party wants to do is tax us. Its members want to tax rural Ireland and put us off the road. We will have to pay more and they have all the public servants to pay up. We know that is what the tax is for.

Deputy Enda Kenny

Gardaí on bikes. The Tánaiste will not cycle behind her State car.

Deputy Seán Sherlock

I refer to the effect the carbon tax will have on a public sector employee earning €30,000 a year whose income will be reduced by €1,500.

An Ceann Comhairle

The Deputy must speak to the resolution. This is part of the problem and this is why we have disorder.

Deputy Seán Sherlock

The effect of the carbon tax on vulnerable, low paid people will be more pronounced as a result of the cuts that have been effected. We want the Government to do something in real terms for them. The budget is predicated on reducing the incomes of the low paid. The introduction of the carbon tax without mitigating its effect on those on low incomes is inequitable. I would like the Minister to address this.

Deputy Eamon Ryan

We have committed to this.

Deputy Seán Sherlock

This has to be addressed in concrete terms, not in nebulous or airy-fairy terms.

Deputy Bernard J. Durkan

Hear, hear.

Deputy Seán Sherlock

This is about real people whose incomes are minuscule and the Minister is further marginalising them and cutting them off through imposition of these taxes. The Green Party Ministers do not realise it because they are on another planet. They do not inhabit the real world. There are people in the real world outside these walls who have been put to the pin of their collar by Ministers who are off saving the planet.

Deputy Eamon Ryan

By insulating their walls and keeping them warm.

Deputy Seán Sherlock

They should have a reality check. We do not oppose the carbon tax but we do not want people on low incomes to be screwed to the wall.

Deputy Michael Ring

Everybody wants a carbon tax but the problem is——

Dáil Éireann díospóireacht - Wednesday, 9 Dec 2009

Dáil Éireann díospóireacht -
Wednesday, 9 Dec 2009