We do indeed have a sad history, going back through that period in the 1990s and 2000s, in which this issue of water charges has been contentious. We have taken a step forward a number of times towards the introduction of some sort of charge and then have taken a step back and this is the latest in a long series where this issue has been deeply politically divisive and contested. I will go back to my own involvement during that period in particular and to the Green Party's time in government because sometimes in the public debate, one hears discussion to the effect that this was introduced by the troika or by someone from outside.
Alternatively, as Deputy Catherine Murphy has just stated, it was merely done because of the revenue-raising instincts of the Department of Finance to get tax and to get items off the balance sheet. There is a certain truth in that, as this would have been the instinct at the time during that crisis. In truth, however, the concept of some sort of charging system on water was brought forward by the Commission on Taxation back in 2008 or 2009 in advance of the crash. It was part of a wider strategic assessment that Ireland's tax system was too narrowly focused on a number of taxes, including VAT, income tax and at the time, on short-term stamp duty taxes. Members subsequently will have seen the difficulty when one's tax system is not broadly based. In addition, from a Green Party perspective within that tax commission, it was looking at a number of areas to ascertain whether it would be possible to tax in a way that helps to reduce the amount of expenditure or to reduce pollution or to use land more efficiently. Consequently, the concept of a site valuation tax was considered and the concept of a carbon tax was introduced, together with viewing water charges or water taxation in a similar way, that is, by using tax as a measure to try to deliver a signal that we must be efficient in the way in which we use natural resources. To my mind, that logic still applies or I would like to hear the arguments against it because while water may be the most difficult one because it rains so much, it is true that it is a scarce natural resource. As the Minister outlined in his speech, it is also true that Ireland has a significant problem of underinvestment in its water and wastewater treatment systems. That tax commission report was not carried out on the basis of some ideological privatisation-seeking crisis management effort by the Department of Finance to try to manage the fiscal crisis Ireland faced; it came from a strategic assessment from within the State as to how in general we should develop our taxation system that delivers other benefits, as well as revenue raising.
The former Minister for the Environment, Heritage and Local Government, Mr. John Gormley, and I included it in a revised programme for Government with Fianna Fáil. While we had contentious debates on many matters, it must be stated that, having been involved in it, to my recollection water charges were not one of them. The former Minister, Mr. Gormley, came forward with various proposals as to what might happen. There are many reports that it was going to be a €500 charge and it is true the Department of Finance and others probably would have been looking and thinking this was the sort of level of revenue they might have wished to get but that was not in the mind of the former Minister, Mr. Gormley. I believe he was first and central in recognising this proposal would be deeply contentious and that it would be necessary to address the issue about potential privatisation mentioned by Deputy Catherine Murphy. He had proposed doing so at the time by having a referendum in order to be certain this would not be a privatised commodity. During the last week of that Government, the Green Party had left office, there was a change in terms. The Pricewaterhouse Coopers consultancy report had been commissioned to look at how a utility-type model might be set up.
It was changed under the Fianna Fáil Administration in the last week of that Government and changed again when the new Government was formed. In my mind, that was the mistake that moved us towards an excessively commercial-oriented type of utility model. We have been paying for that, along with the sad saga that Deputy Murphy set out about how it was debated in the Dáil and subsequently introduced.
That commercial type of utility model implies that water is just like an electricity or telephone bill. I do not believe it is. There is a certain fundamental difference with water in that people have a right to water. We have a right to water because it is a basic commodity for a right to life. It is not a commercial commodity in the same way as electricity or telecommunication systems. It deserves that distinction. Even if a utility is not to be privatised and is to remain in public hands, it could be a standard utility like the ESB. I know from experience that the ESB is very much concerned with, keeps an eye on and is attentive to whatever the bond market thinks of its investment strategy because in large capital-oriented investment businesses, the cost of a company's borrowing has a key effect on a business model. In effect, a standard commercial utility is very much connected to the private bond markets in terms of what it can and cannot do. That is not how we should be running an Irish water company.
The question now is where do we go from here? The Green Party will be supportive of the proposal to establish a commission to look at the options, bring them back to the Oireachtas and form a committee. The commission will have a difficult task. To a certain extent, what it has to do is break the issue down to certain component parts in order that it is not simply a monolithic "Yes" or "No" decision. I do not think anyone has the wisdom to be able to parse out this argument or reach a resolution if it is left as a single "Yes" or "No" decision.
I will briefly discuss some of the issues that the commission must consider. I believe it should look at the ownership issue. It should look at the option put forward by several parties, including the Green Party, of a constitutional referendum in order that the public ownership of the public water supply is absolutely guaranteed. I would like to see if we could go further than that because our Constitution is remarkably weak when it comes to protecting environmental resources. A very good conference was organised by Green Foundation Ireland last year, which recognised that our constitutional law is not in tune with either European legislation or our own national legislation in providing that belt-and-braces protection and respect for our natural environment. I believe the introduction of a constitutional referendum to ensure the public ownership of water could be tied in to a recognition that we have a responsibility to maintain, manage and protect our natural resources and our water supply in particular. That could be done very quickly. It is not easy. We know referendums are always difficult. If this debate is not just about Irish Water, as Deputy Murphy rightly says, then let us address the other issues and bring certainty to them as a way of coming to an agreement on what to do with our water system.
Just as there should be a right to water in a constitutional sense, I believe it makes sense that there should be a basic free allowance if we introduce a charging system for water. The right to water ought to extend such that even if one was in deep financial difficulty, one would still receive a basic free allowance of water which one is not charged for and is one's by right. We ought to extend that concept of the right to water. That is why we have been arguing, as have others such as Mr. Jack O'Connor of SIPTU who have made similar points, that we could introduce a system in which we introduce charges only on the wasteful use of water and in which every citizen - man, woman and child - has the right to a basic allowance which is not charged.
If we can parse out and manage the ownership and basic right to water issues, there are then the issues of how to fund it. We should not look for a funding model that completely removes the role of general taxation. When it comes to how much money we need to spend in updating our water system and wastewater system, the reality is that the bulk of the money is still going to come from our general taxation system. There are those who argue that it should be the only source. First, they fail to acknowledge that we need to increase significantly investment in water. If we are to fund it all via general taxation, it means taking money from other investment requirements that we have. Second, if we do not have a charge of some sort on water, an incentive or a pricing mechanism, I believe that as a State, over time, we will not pursue conservation or the better management of a water supply system. That means that we will pay more in the end. It is a more expensive system if we go back to the old way.
It depends on how the question is put. If we can look at it in the framework of how we can really save money through using less water, managing it wisely, investing for the long term in order that we are not spending money on a treatment of pollution system that is not working, I believe the people will support some sort of additional charge. That raises a certain amount of revenue and helps us to invest. Critically, it helps us to save. That is the cornerstone of the issue of charging. I believe we should have a charging system to provide that incentive for conservation.
It also opens up other funding options to us through going to the EU, the European Investment Bank or other sources of funding to source long-term, low-interest rate borrowing for a system which is not reliant on the bond markets. We do not want to be going over to London or Frankfurt to international banks or private equity firms looking for bond market funding. We should be able to go in a public way to the EU or the European Investment Bank to look for European funding for critical infrastructure to help pay for what we need to do. We will not get that funding or have a leg to stand on if, at the same, we are saying that we do not buy in to the Water Framework Directive and that we are not implementing, like every other country, some sort of system which recognises that water is actually a precious natural resource. We must give some signal to make sure that water is not wasted.
That brings me to the next question of whether we should have metering. I have listened with respect to what Deputy Murphy said about Kildare previously having a leakage rate of only 25%. I had a similar experience in Dublin City Council during my time there. We had a very high leakage rate in the late 1990s and we made a strategic decision to address some of that. It is not perfect and there is still a large amount of leakage, but it was not as if we were doing nothing. Metering is not the be all and end all. Others argue that we could save regardless of metering. I have a number of different points on metering. There are those who say that identifying the leaks and so on and having a price signal with metering might allow people to save 10% to 15%. Even that amount could be critical in a city such as Dublin, which is on a knife edge in terms of having enough water supply.
There is a broader technological aspect to this. The way the world is going is towards managing water supplies and natural resources in a much more co-ordinated way in which the internet of things will lead to a whole range of sensory devices which look at how our natural systems work and how our resources are being used. That is the way the world is going. For us to move away from that and to say that we do not want to be part of the connected, clever management of natural resources using new sensory systems is, in my mind, a step away from where any progressive country is going. I believe we need metering. We need to know. If we are not monitoring, we are not managing. Metering is needed for that reason as well as being a way to help us to save water.
In terms of structure, we need some sort of utility for the central billing, management and planning of the overall system, for raising finance and so on. I believe there is a case, as I said to Irish Water - I know it is recognised in some of its internal structures - to devise a system which is based on more regional recognition that the river catchment systems are a natural regional structure. We should manage our water in connection with those natural geographic structures. The Minister will need a plan to manage flooding, climate change, transport, housing and other systems which are similarly regional in structure.
On an issue such as climate change and flooding, we must go from the mountain top down to the sea and look at land use connected to that with regard to carbon, minimising flood risks and so forth, as well as providing enterprise opportunities for our people. Given that this level of regional planning and regional investment decision-making is required, and I believe freedom should be given to each region to examine how best to manage its resources and regional plan, it makes sense to have a water utility that has separate regional structures beneath it which have real autonomy and strength. We will not achieve that if we return it to county councils, because that is the wrong level. The smaller councils do not have the necessary resources and it does not address the reality that the counties are connected within a wider river catchment system.
I do not know how the Minister's proposal will work, but I hope it does. I hope this Parliament will not fall on this issue a year hence and perhaps prove all the cynics right when they say that it could not organise a new politics or do consensus or collaboration. I am not sure how it would vote ultimately if various calls were put to it that would break down all the issues in a slightly different way from a "Yes" or "No" vote. This is a citizens' democracy and this Parliament is a good representation of the Irish people. The majority of Irish people, in my experience, if one talks to them about this issue in a detailed way, recognise that we must have some type of charging system other than general taxation, as long as it is fair and based on conservation, not just on raising revenue. If we can get a commission to come forward with a mechanism to approach it, there might be a majority in the House similar to the majority of Irish people who are willing to pay. Nobody likes it. It is another bill arriving, God help us, and that is tough. We must also look after those who cannot pay.
Many Deputies say there is an absolute cast-iron majority against any type of charge for water, but I am not so sure that is true. I look forward to a commission that might be able to approach the argument in a way that considers it through a range of questions, not just one "Yes" or "No" question based on slogans rather than on sense.
