Amendments Nos. 1 to 3, inclusive, are related and may be discussed together.
Finance Bill 2023: Report Stage
I move amendment No. 1:
In page 3, line 18, after “2023” to insert “and subsequent years”.
This is the first of our three amendments related to extending the temporary benefit-in-kind, BIK, arrangements beyond the end of this year. This would support drivers of company vehicles into 2024 and beyond, which is imperative. Many company fleets do not have the wherewithal to replace their cars with electric vehicles, EVs. Medium-sized companies, including wholesalers of confectionery or whatever, have a fleet of cars on the road with very skilled and safe drivers who do a lot of mileage. The benefit-in-kind scheme was of benefit to them. I know the Government wants to push everybody to move to EVs. With the downturn in the economy, coming out of the Covid pandemic and everything else, those small companies did not have the wherewithal to change their fleet to electric vehicles.
The Minister, as an accountant, will understand company law and how people make provision for write-downs, write-offs and changing their vehicles over a number of financial years. So, they would want to change. Amendment No. 1 states:
In page 3, line 18, after “2023” to insert “and subsequent years”
The phrase “and subsequent years” is very important because it goes forward and rolls over. If we just get it for bliain amháin in 2023, it will be no good for anyone. It is a help, but then the guillotine comes down on it.
Amendment No. 2 states:
In page 3, line 30, after “2023” to insert “and subsequent years”.
Amendment No. 3 states:
In page 4, line 15, after “2023” to insert “and subsequent years”
The Bill, as drafted, will only facilitate temporary change in the benefit-in-kind regime for petrol and diesel vehicles, which make up the majority of company cars for employees who have experienced higher income-tax liabilities since the start of 2023. The temporary measure, while welcome, only partly addresses the issue of relief for this year. The measure will see €10,000 applied to the open market value, OMV, of the cars in categories A to D, inclusive, to reduce the amount of benefit-in-kind payable. This is not applicable to cars in category E. In effect, this means that for the purposes of calculating BIK liability, employers may reduce the OMV by €10,000. This treatment will also apply to vans and electric vehicles. For electric vehicles the OMV deduction of €10,000 will be in addition to the existing relief of €35,000 that is currently available for EVs, meaning that total relief for 2023 will be €45,000. That is a big difference from the €10,000. There are certainly huge incentives there for people to go electric.
One of my good friends, who talks to me about this, travels to such noted places as Kilgarvan. He passes through it and calls to different confectionery stores, not to mention any names, because we would be accused of promoting certain businesses. He goes to places like that and all over An Mumhan, five or six counties in Munster. The Minister and I along with the dogs in the street know that the charging points are not yet in place for these people to charge their vehicles who cover such huge distances. We are clearly putting the cart before the horse here. While these people are energetic and good employees, they are not able to push the vehicle with an electric motor inside it up and down hills and roads where they have no place to charge it when they run out of power. If the vehicle is hybrid, they have some chance but they have no chance with their fully electric vehicle. Cad a dhéanfaimid feasta gan adhmad? Cad a dhéanfaimid feasta gan solas? If there are no lights, they have no chance to plug in and charge anywhere, so they are being plugged out and switched off. Some companies now have trackers; they might not even work when the battery is dead.
This is really the Green tail wagging the Fianna Fáil-Fine Gael dog here, shaking the dog and putting the dog into a spin. We need to go back and muzzle the dog here, trim the tail, stop the shaking of the dog and live in the realpolitik and real-----
You cannot be trimming tails anymore.
With veterinary supervision. I know it is not allowed. God knows what is not allowed now. There is a lot less allowed now than what is allowed and that is the problem. However, we want these drivers operating for small companies to be allowed to go out and do an honest day's work for an honest day's pay and supply the good shopkeepers in Kilgarvan and ar fud na tíre in every other town and village, and not have them ringing up and not having Mary, Agnes and Angela coming in for their confectionery and we do not have it because they cannot stop somewhere over Boherbue or up the hill when the battery went down and there was no place to recharge it. It is a bit of nonsense.
We are moving these amendments because we feel strongly about this. We want to support this category of employees who have given loyal and dedicated service to their companies, pay their taxes, provide for their families and then go out and support clubs and support many other community initiatives in communities with the hard-earned cash that they have left after paying their taxes. All they want is to continue to do that. We need to nudge them along slowly in the green dream and call off the dogs. Whether it be tails wagging the dogs or the dogs wagging the tails or dogs with no tail, but cut them off because it is a nightmare. You would wake up and think you were in a bad dream. I am not putting my head in the sand, but we have run away with ourselves here and I am shocked that Fianna Fáil and Fine Gael would allow the Green Ministers to have such a negative and devastating impact on our rural people.
I remind the House that Deputies Doherty, Michael Healy-Rae, Danny Healy-Rae, Michael Moynihan are offering and we have 90 minutes in total remaining. I call Deputy Doherty.
Is there a guillotine on this debate?
We have 90 minutes.
We are dealing here with amendments Nos. 1 to 3, together, which relate to benefit-in-kind. The Minister will recall that I raised these issues on Committee Stage, particularly the issue of the BIK changes that took effect in the 2019 Finance Bill, which I supported. I do not think there was any opposition to those amendments at the time because this is about encouraging people and companies to make the transition so that their employees will benefit from a reduced BIK if they make the transition. Unfortunately, we are dealing with the cost-of-living crisis and as a result of that, with so many pressures bearing down on individuals and families, last year I called for the extension of the BIK for a period. The Minister’s predecessor, Deputy Donohoe, refused point-blank to listen to the calls and pleas from this side of the House and, indeed, from some backbenchers in the Minister’s party and in government. I welcome the fact that with the change in Minister for Finance, he has taken a more open approach to this and has brought forward this amendment, which will bring in a reduced BIK for the assessment year of 2023.
As I have mentioned to the Minister, in respect of the cliff edge, certain employees - it is not the businesses - who pick up this tab could have seen their liability increase by more than €1,000. For some, that cliff edge now is just beyond them. It is no longer the start of January but it could be the start of January next year. In a way, these employees are at the mercy of the companies that employ them. Will the companies change their fleet of cars and will they move away from the old fossil fuel engine to environmentally cleaner cars? That is the issue.
One of the biggest concerns I have, which I raised with the Minister on Committee Stage, is that we are completely in the dark. We have no data to tell us who has or has not moved, how many employees would be subject to this change when this measure runs out at the end of the year, or how to track progress in ascertaining whether this tax is affecting behaviour, which is what we are trying to do with this tax. The alternatives exist in companies where they are able to purchase their fleet. They are changing their fleet anyway at a certain time and this measure is an incentive to do that.
The Minister said that he would engage further with Revenue to see whether that information can be obtained and that the details of these tax changes and their impact would be reviewed later in the year. Keeping this measure under review is the correct action. It may be a case that if this measure has not effected the change that we will need to extend it; it may be the case that perhaps a step is required. Instead of €10,000 being taken off the OMV, it may be €5,000, but that will still encourage people to make the change, but not with the significant step effect that is currently in place.
Amendments Nos. 1, 2 and 3 effectively provide that we are getting rid of the whole idea of trying to effect change in these companies through the tax measure. I do not believe that is the appropriate measure; it is appropriate for the Government to make the amendment it has up until the end of the year. Let us then collect the data from Revenue and see if it is possible to actually have a look at what is happening, assess that in the run-up to the 2024 budget, and to then make an informed decision as to whether the measure needs to be extended by step effect or, indeed, needs to just finish. That is very important.
As legislators, it is very difficult to be talking about tax changes where we want to effect change without being able to measure whether that is happening. The data should be available by the end of the summer, if that is possible.
On a point of information: it is perfectly normal and good animal husbandry to cut banbhs' tails and to cut the tails off of terriers. That has to be done for the betterment of the animals. I am sure the Ceann Comhairle will appreciate that bit of clarity.
With regard to the BIK measure, when the Government made the announcement a number of months ago, it created a great deal of upset among companies and the users of motor vehicles. The whole idea of what needs to happen in the future with regard to EVs is that it is very important that the whole ethos behind the benefit-in-kind scheme is kept in place, is sacrosanct, and that people will have the benefit of the scheme in the future, whether they are driving diesel, petrol, electric or hybrid cars. That is, what will be in the future is what was in the past.
I wish to highlight the issue of charging electric cars. Yesterday morning, I had a very important meeting with a very sound gentleman who informed me a great deal about the electric charging points and the installation of them in commercial businesses and as to what it would actually mean. In case anybody is in any doubt about this, if a person says tomorrow morning that he or she wants to install an electric charger, they must first have a very serious conversation with the ESB because the odds are that it might not actually be able to give the person what he or she requires. That is the first issue and is probably a point that has been completely missed by the Minister for the Environment, Climate and Communications.
The second issue is the cost. It will cost the person who owns that business €42,000 to install a fast-speed charger. That will take 40 minutes to charge one vehicle. Let us think about that for a minute. If a business has one charger at one location, and one vehicle comes up, it will take 40 minutes before another vehicle can be charged. The cost for the charging of that vehicle will be approximately €42. The person who owns the business and has gone to enormous expense to have the ESB upgrade his or her power supply so that he or she will be able to have this charger, which will have cost him or her €42,000, will get a minuscule amount from this, on which 50% or 60% tax will be paid on whatever couple of pence is made from this. This, again, is something which is of absolutely no importance to the Minister for the Environment, Climate and Communications because why would simple facts like that matter to anybody? That would be of no bother to him or to anybody else in government.
I just wanted to highlight these simple straightforward facts to the Minister, which reflect the realities of charging EVs. There is a cost of €42,000 to the person who is providing the service, where a car parking space is taken up in that facility for 40 minutes, a minuscule amount paid over in profit, I will call it, to the person, who will then pay 50% tax on it. People have not thought this through at all yet. I really mean that.
I have put on the record of the Dáil the fact that two motor cars, which had cost something like €160,000 between them, set off from Dublin heading to the great village of Sneem in County Kerry, and the two of them failed to make it in one trip without stopping and having to recharge, reboot and get going again.
I wanted to highlight those points to the Minister. This is not all that the Government cracks it up to be. It is like an awful lot of what we were talking about earlier on in respect of the solar panels where there are issues the Government had not thought about at all. I want to hear what the Minister will have to say by way of reply. I apologise as I have to leave for a committee meeting but I will hear what he says in my absence because I will get it later.
Are we also taking amendments Nos. 2, 3 and 4?
We are discussing amendments Nos. 1 to 3, inclusive.
First, in respect of the electric cars, and I have always said this, the general public are not fools and when the electric car is reliable, affordable and will be a realistic option, people will buy them. I have no doubt about that.
Diesel and petrol cars are reliable and will take people the distance. It is about getting people from A to B, especially those in rural Ireland. They have longer journeys to make and depend on a reliable car.
There is the question of if and when we will have infrastructure sufficient and adequate to provide the service people need. They need a fast way to charge cars and plenty of infrastructure to do so. That is not available at the moment and saying to people they will not be able to buy a diesel or petrol car after such a date - 2030 or whenever it is - is wrong. The Government should incentivise people by providing the infrastructure for electric cars. It must be able to reassure people they will have electricity at a certain time to run these electric cars because when the electricity goes out, everything goes out and the chargers will go out as well. The Minister has to take that into account and not be forced by the Greens into doing these things in a hurry, but to wait until people are sure the electric car is equal to the cars that are there at present and can bring people to Dublin from Castletownbere, Dingle or Valentia Island such that they will not be stopped two or three times along the way when coming up to see someone in hospital or for a serious appointment. An electric car is not an option for those people until radical changes are made. They might be fine for running around, bringing children to school, short journeys and city driving where the mileage is not big. They are probably an option for those people. That is fine. I have nothing against electric cars but we must also have electricity to ensure people are brought where they want to go.
I want to talk about the increases in diesel and petrol that the Government is bringing in on 1 June, 30 September and 31 October. I regret and resent them very much. Adding up what we are told the three increases will amount to, it is actually more than the reductions given at the time fuel went so dear, it forced the Government to reduce excise duty on it. I resent that it is being put up again, especially for the people who are out early in the morning in rural places and have no way of going to work without using a car. They are going on long journeys from rural places like Castlemaine, Gneevgullia, Scartaglin and Brosna. They cannot get into the centres of Tralee, Killarney, Listowel or wherever without a good, efficient car. People will always need cars in rural areas because public transport is not adequate to bring them everywhere they want to go. The Central Bank will not run a public transport system to cater for all the people in rural Kerry, not to mind the rest of the country.
Hauliers will be impacted by these raises. The cost of it is still exorbitant, along with carbon tax. Talking about carbon tax when a litre of petrol was €1.20 was bad enough, but putting on the increase as a percentage now is very unfair and wrong.
When we talk about climate change and stopping people burning a few sods of turf on the fire, it galls me and many people to see rockets heading for the moon, Jupiter or wherever it is. When they lift out of the ground, there is a flame a mile long out of them, and we are made feel guilty about burning a few sods of turf on the fire, like we have done for generations. I can count going back to Tadhg na Rae in Kilgarvan. He is seven generations back from me and he was cutting turf at that time to keep his house warm.
With all the impact we are supposed to have on the climate, at the same time there is no mention in the world of the environmental effect Putin is having on the atmosphere with the bombs he is shelling Ukraine with. Surely we must take everything in context when we are depriving our people of the opportunity to keep themselves warm and hurting them when they go to work by putting taxes on fuel to tax them out of it. It is very wrong and I feel very much for the people I represent in rural Kerry.
I understand the legislation relating to benefit-in-kind was brought in in 2019. It has affected companies, particularly companies in the Duhallow region that I represent. We recently visited a number of small indigenous companies who have people travelling and have bases in Dublin and everywhere else. They spoke of how the benefit-in-kind impacted on key people they have, particularly on sales but also in meetings and so forth.
It is fine to look at the public transport system into and out of Dublin but many companies travel the length and breadth of the country and they are being penalised. The companies we visited with MEP Billy Kelleher a number of weeks ago explained to me that it incentivised doing more mileage to go over a certain threshold to kick in. It was having a negative impact on what was the idea behind it.
I welcome the initiative and that the Minister has provided in the Bill that the change to benefit-in-kind will not kick in but we need to look at it in its entirety. With all the things we have to look at from a national point of view, particularly for rural communities, we have to make sure that every place is encouraged to grow industry and that there is industry all over the island. The benefit-in-kind change particularly negatively impacted rural communities.
Cutting-edge and leading companies provide top-class employment in our region, including the likes of Munster Joinery, Avonmore Electrical and others. They are at the cutting edge of the products they produce but they have to go to the market to make sure their product is sold and they have to engage with their customers daily and weekly. It was put clearly to me that the benefit in kind would impact them and the people they employed. It was put to me that a wealth of knowledge had been built up in recent years and, if it is not financially beneficial to employees, they can, in the current market, go elsewhere for employment. It is hugely important for indigenous companies to be able to retain the huge bank of knowledge they have.
In welcoming what has been done to date on benefit-in-kind, I ask the Minister to look at it going into the budget process for 2024, which is probably already starting. Will he make sure this is looked at in its totality, including the negative impact it will have? I believe what the Minister has done to the end of 2023 should be extended beyond this. It will not do what the Minister or the Government intends it to do. It will be a retrograde step because people will have to clock up more miles to get the benefit of it rather than looking at the option in some circumstances of taking public transport. It certainly was not fully thought out and given the effect of it that became clear at the end of last year and early this year it is welcome that changes have taken place.
I ask the Minister to take a more rounded view of benefit-in-kind. It is there to incentivise people and for companies to keep the best people possible who are out there selling their wares, selling their companies and selling what we are producing in abundance. I only speak for rural Ireland because I come from a rural constituency. Small indigenous companies produce top-of-the-range products and they should have no disincentive to being able to make sure they can employ the best people, keep the best people and keep the wealth of knowledge they have in their companies. Benefit-in-kind had a negative impact.
On the wider scheme in terms of going electric and electric cars, people's mindsets have changed. It has to be incentivised but there must also be an assurance that the facilities and services are in place the length and breadth of the country. I welcome the initiative to extend it to the end of 2023 and I appeal to the Minister to look at it in the negotiations and in the documentation he will be collating in the run-up to the budget to make sure it is extended beyond it.
Benefit-in-kind is quite complicated. The Bill facilitates a temporary change to the regime for petrol and diesel vehicles, which make up the majority of company cars for employees who have experienced higher income tax liability since the start of 2023. I welcome the amendments the Minister was forced into making. Cars doing 50,000 km a year and with an emissions rating of 120 g will now pay a benefit-in-kind rate of 12% and then 15%, while the value of the vehicle will be reduced to €10,000.
Finance means business. Business means viability. I have to ask a question. Is the Minister's Government car electric? Is the car of any Deputy in the House electric? Is Deputy Moynihan's car electric? Is Deputy Lawless's car electric? How many of the Cabinet's cars are electric? Deputy Matthews was here a while ago. His car is not electric. Fianna Fáil, Fine Gael and the Green Party speak about electric all the time. Why can they not lead the way themselves? Why does the whole Cabinet not get electric cars and ask the rural Deputies in the Cabinet to drive electric vehicles?
The benefit-in-kind for companies is not viable. In England at present four-year-old electric cars in a garage cannot be sold because people look at them and see there are only three years' shelf life left in the battery. They look at the warranty on an electric car to see it provides for 100,000 km or five years. Someone working in a company and looking at benefit-in-kind knows that most company vehicles do 50,000 km a year. I do it and most company vehicles do it. This means that two years after buying an electric vehicle it has done 100,000 km and the warranty is gone. Then the company will have to change the electrical vehicle after having paid an exorbitant price to buy the electric vehicle to try to do good in this country, which we all want to do. There will be zero benefit-in-kind but in two years' time the warranty will be gone.
There is also a shelf life in the battery. For an average car these cost up to €8,000 to replace. The seven years that a battery lasts is worked out on the basis of 25,000 km a year. If I had a diesel, petrol or hybrid car and I drove into a garage with 100,000 km on it after two years, the car would still be worth something because the engine will do another 400,000 km. However, an electric car would not and would be worthless.
The Government is producing all of these rules for people in this country and telling them to drive electric. I was on Live95 this morning speaking about the age of the average car in this country. The average car in this country dates from between 2011 and 2016. How are their owners supposed to afford an electric vehicle at the current inflation rate? Let us have common sense. It is not that common in the House but let us try a small bit of it. Look outside or drive around Dublin and we will see that most cars date from between 2011 and 2016. These people cannot afford to buy a new electric vehicle. In two years' time they would not be able to afford to hand out €8,000 for a new battery after losing the warranty. This is what the Government is now enforcing but the majority of the Cabinet do not have an electric vehicle so how can they comment on something they do not have themselves? If the Government is so proud of doing what it is doing why not change the Government vehicles to electric? With all the driving they do I am sure the drivers would be going around the country looking for charging points to try to get home. There is no common sense here.
I welcome the benefit-in-kind being shoved off until the end of 2023 but when the Government is drafting legislation and bringing Bills before the House it should know what it is talking about. I have been in the motor industry all my life because I am involved in vintage vehicles. I know about engines. I know about agriculture because I am from an agricultural background. I know about tractors. I know about trucks because I own one. Not one member of the Cabinet is self-employed. How can they make decisions for self-employed people when they are not self-employed people themselves? They think that at the turn of a switch because the Department says to change something and it costs €100,000 that it is only €100,000 for a company and it can change another regulation next year. That will cost another company, farmer or person at home €100,000. They think they can just change and change and the money just grows on trees. It is not realistic.
This is why the Rural Independent Group has always stood up and said that we should put in the alternatives and then we will all change together. The Government put in the change without alternatives. It is making a business case to businesses without a proper financial examination which would show the vehicles being bought will be worthless if they do 50,000 km every year. After 100,000 km over two years the car will be worthless. What person in their right mind would buy an electric vehicle if they are doing that mileage? They might well just go home and burn the money. If people in this country have a fossil fuel vehicle at present it is the only thing that is worth something, even if it is ten years old. An electric vehicle is worthless after four years.
When the Government brings in something with sense that will overcome this and make it viable for people to buy electric vehicles we will support it. They are ideal for small mileage and for people living and working in towns and villages and I recommend it to anyone who can buy one who is doing small mileage. However, anyone in business cannot afford it because it is not viable. They have no warranty. They will pay out for the battery and the vehicle will be worthless after two years with high mileage. Let us have a small bit of common sense here.
I will briefly respond to Deputy O'Donoghue's remark as he asked me a question. I do not have a Government car, but I have another car. I do not drive an EV at the moment but I drove a Prius happily for many years. The only reason I got rid of it was that it was destroyed with election posters and cable ties. There were scrapes and scratches on the back of it.
He does not have one.
I sold it because it was driven into the ground.
The question I asked was whether the Deputy has an electric car.
I drove a Prius before many people did.
The Deputy does not have one.
I do not have a Government car full stop.
Does the Deputy have an electric car?
I do not at the moment. I would be happy to drive one.
That is the only question I asked.
I am in the market for a new car. If an electric vehicle manufacturer wants to-----
I will sell the Deputy one. It is 2006.
Perhaps Deputy Danny Healy-Rae and I will do business after the debate.
It has only 780,000 km on it.
I am open to the idea. I test-drove a hybrid petrol-EV model recently. I drove a Prius for many years before many people did and I found it extremely useful. I live in a rural area in Kildare. The only reason I got rid of it was that it practically fell apart after one election campaign too many. It had a good boot for posters. I can recommend it on that basis.
Moving on to the substance of the amendments, I welcome the Minister's move to introduce a pause on some of the transitional amendments. It is wise of the Minister to do so. It also falls in line with the twin-track policy being pursued by the Government in many of these areas. It is often said that it is good policy not to have a cliff edge on any aspect, be that a fiscal measure, an environmental measure or anything that affects people's daily budgets. Constituents have contacted me about this measure and concerns were expressed about the BIK cliff edge that was potentially at play, especially the right to 52,000 km mileage. As one constituent, Mr. McAllorum said to me, it was almost as if he was being incentivised to drive further as in order to get the full benefit, recipients had to go further, higher, faster and longer. That was counter-intuitive as people were being encouraged and incentivised financially to drive more miles to get the benefit and that went against the spirit of the legislation if not the letter of it. I welcome that this has been recognised by the Minister and that this amendment looks to press the pause button on that. It is part of a twin track.
In responding to people such as Mr. McAllorum in my constituency and others like him I say to them that we hear what they are saying, we hear the difficulties on a practical or day-to-day basis, especially at a time when inflation, including fuel inflation and vehicle inflation on new and second-hand cars, is increasing and the cost of motoring is increasing because of the cost of fuel and the cost of living. Not only that, but in parallel, the Government is rolling out charging infrastructure, investing heavily in EV infrastructure, putting in charging points and parking spaces for electric vehicles and making it possible to drive an EV.
A friend of mine bought an electric vehicle last year for commercial purposes. He is a solicitor and is often on the road for court. When his accountant finished with it, he was basically being paid to take up the vehicle. There were so many grants and schemes afforded and granted to him along with the tax relief because he was using it for work purposes that the vehicle cost him very little in net funds. That is a real-life example of a commercial user who bought a fully electric vehicle last year. I have been in it. It is a fine vehicle as it happens. People are availing of this and making the move and that makes eminent sense. Real concerns were expressed by real people about the apparent cliff-edge nature of it. There was also a dichotomy potentially evident with some people travelling in urban areas, perhaps making trips around the city from meeting to meeting, be it in Dublin, Cork or Galway and other people who were putting in, perhaps not the same miles on the clock but the same hours in the vehicle. Some of them were benefiting from a BIK exemption and some were not. There appeared to be an unfairness in that. I welcome that the Minister has taken these points on board. It makes sense to press the pause button for one year only and in parallel to roll out the infrastructure and policy supports for electric vehicle infrastructure and the wider adoption of them and to stay core to that policy initiative, which, let us be honest, was introduced in 2008 in an earlier Finance Bill but never commenced. This is not new. It should not be new to anyone in this House. In fairness, I do not think that Members do, but anyone who does not realise that we have to get green, is perhaps a bit green, dare I say - green behind the ears perhaps. This is where we are going. This is where the world is going and we need to get on board. I welcome the pause being applied for all the reasons I have outlined.
The Deputy said that this is the way the world is going and people would like to keep up with the trend if that was humanly possible, but we are talking about electric vehicles and electric charging points. In rural Ireland they are difficult to come by. If you left Gortduff, Goleen, Ardgroom or Sheep's Head this morning and made your way to Dublin, you would like to think there would be as many charging points in the rural areas as you see around Dublin and its surrounds. That is not the case. I accept that will change in time but it looks like it is changing rapidly in and around our cities, although not in our rural areas, to encourage people to use electric vehicles. They can be expensive if they want to keep up with the grade of vehicle they already have. Community and sporting organisations in west Cork have contacted me to ask how much it would cost to put a charging point in their community grounds or sporting grounds. Some people feel there is a little benefit to be made for community, voluntary or sporting organisations that do so. It is a legitimate question. People who have fuel stations benefit slightly. Perhaps the Minister could clarify that. It is an area that we are a good few years away from making perfect, if it ever will be perfect.
The Minister must remember many years ago we were told that everyone should have diesel engines and by the time people caught up with that, things had moved on to electric so it is quite possible that when this is fully rolled out, people will be told that electric is the wrong way to go. However, we will listen to the experts and hope they know what they are talking about. The problem is that people have such astronomical electricity bills in their houses at present, it is frightening to add to that by plugging in a car.
We will be talking about our amendment which refers to how people in rural Ireland are travelling in petrol and diesel vehicles and states that most of them genuinely cannot purchase a new car. Very few second-hand electric cars are available so they are caught in a trap and that is where they will be for many years as they cannot afford to come out of that trap. They would like to and no matter how many grants the Government gave them, they would not be able to afford a new diesel or petrol car, never mind a new electric car. That needs to be addressed going forward.
If the Government is going to remove the VAT reduction from fuel and put on more carbon tax and National Oil Reserves Agency, NORA, tax and this tax and that tax, we are talking about 18 cent between now and six months from now. That is an astronomical jump for people who are trying to pay bills. It will lead to a huge additional cost in food delivery for hauliers and bus owners. Eighteen cent on the litre is a shocking amount of money for people to come up with. They simply cannot go electric at the moment because the infrastructure is not there. They cannot afford to purchase the vehicles. Many things prohibit people from using electric vehicles. Everyone likes to change and to keep up with the trend but at this time in their lives they cannot.
Public transport is a disaster in rural communities. There are many proposals and we are working. I am a volunteer member of West Cork Rural Transport. We are looking into doing a run from Ardgroom to Sheep's Head. I will welcome it when it happens. It is a great idea and it will run several times a day. However, we must consider areas such as Clonakilty to Dunmanway and several other areas in west Cork. Mizen Head only has one bus leaving it in the morning and it does not come back until late in the evening. We are years behind in public transport. The Government needs a clear understanding. I cannot see any electric buses in west Cork. There are very few electric cars. Public transport is at an all-time low. There are a lot of promises. I often said if someone in west Cork had a euro for every promise, that would be a wealthy person. We need a little more than promises. We need delivery of those services. We need more frequent buses. People say that they might not be used but they certainly would be used if they were available. There is no public transport route from Goleen to Durrus to Bantry on any morning of the week. Areas like that need a proper service. The people in those communities have the same right to public transport as the people in Bray or Dublin who get a service every two to three minutes.
We are light years behind in relation to public transport and electric vehicle charging points in rural areas. I am not against electric vehicle charging points and I ask the Minister to clarify how community groups and sporting groups can have them installed. How can they do this? Can it be fast-tracked? They will be grant-aided but maybe they could make a tiny profit from it as well because these will be plugged into their electricity supply. These are things that could help going forward. I would certainly support that but for now, we have to deal with what we have to deal with, which is the fact that the only way for people in the communities I represent to travel is by car but 99% of them cannot afford electric vehicles at this point in time. Many are running cars with older petrol and diesel engines. Often the cars are in immaculate condition because they are subject to the NCT. People are running older cars because they do not have the finances to do differently and anybody who says otherwise is in a different type of constituency from mine or else he or she can well afford to buy an electric vehicle.
I ask the Minister to clarify for the people of my constituency what his plans are in this regard. Where are the finances going to be put, going forward, in relation to both public transport and roads? The roads are in an appalling condition in west Cork. People are absolutely furious about that and are asking me, as a public representative, why we cannot deliver a proper road service, never mind worrying about electric vehicles and how they might survive on these roads.
I welcome the amendment the Minister has made to the benefit-in-kind measure. The Fianna Fáil parliamentary party as a group met with the Minister to explain that while we believe any initiatives to move towards cleaner vehicles, whether electric or hybrid, are welcome, in some cases people would be put very much out of pocket by this measure. I really appreciate that the Minister listened. We are all in agreement on the direction of travel in relation to electric cars and I welcome the fact that the Minister listened and made the amendment. Perhaps it can be revisited in the future but for my part, and on behalf of the parliamentary party that approached the Minister, a degree of gratitude is due.
In relation to some of the comments made by Independent Deputies, and by Deputy Michael Collins in particular, we are actually in agreement on a lot of the points made. I welcome the fact that Deputy Collins is calling for an increase in EV charging infrastructure and I agree that west Cork needs it. At the moment there are very few fast chargers in west Cork. These are the fastest type of charging facility for EVs, where one can get quite a good charge in ten to 20 minutes, in the time it takes to go for a cup of coffee and spend a few bob in the local garage. They are very effective and efficient and are the model for the future but I agree with Deputy Collins that we do not have enough of them, particularly in west Cork. There is one each in Skibbereen, Clonakilty and Bandon but when one goes further west, there needs to be a bigger roll-out. I also agree that EVs cost a lot and not everybody is able to afford a new electric vehicle. A sum of €30,000, €35,000 or €40,000 is a lot to spend on anything and there are lots of people out there who do not have that kind of money.
There are, however, many people out there who are in the market for a new car and there is no reason they should not consider buying an electric vehicle. I will talk about why in a minute but these new EVs, at €30,000 to €40,000 cost the same as a new diesel SUV or a hybrid vehicle. They are very similar in terms of price range so if someone is going to buy a new car, why not buy an EV? EVs do work.
One would only land here about once in a fortnight.
If Deputy Healy-Rae will let me explain, I will convert him. I will do my best and by the time I am finished speaking, Deputy Danny Healy-Rae will be in an EV, charged by offshore renewable energy from the Kerry coast and he will have zero emissions.
The Deputy must think I am a complete fool.
EV sales surpassed diesel vehicle sales this week and there is a reason for that. EVs are becoming a more viable alternative. A couple of years ago I would have agreed with Deputy Healy-Rae. The range was not there but the ranges are fantastic now. We are talking now about 400 km and up to 500 km. Even Deputy Healy-Rae and I would not do that much in a day.
I would do that to go home.
The Deputy would have to charge it before he goes home; he is absolutely right but the technology is improving vastly. EVs are fast. I am not sure if the Deputy has ever been in one but they are fast, smooth and comfortable. The Deputy is absolutely right that one is not going to pull a trailer-load of cattle in an EV. They are not ready for that yet-----
And one is not going to do 80,000 km.
We are going to have to allow for that transition. One will not be able to pull a trailer-load of cattle or silage but there is a place for EVs. Their range is improving massively.
We all agree we need offshore renewable energy. I have even heard comments from Deputy Healy-Rae in relation to that. When we have offshore renewable energy and we are charging EVs, that is clean transport. Furthermore, there is a case to be made that EVs are more suitable in rural areas. If the Deputy jumps into an EV now and drives at 120 km/h up the motorway, he will eat into the battery but when he is going around rural roads, like the road from Kenmare to Killarney, he will use way less battery power because he is travelling at between 80 km/h and 100 km/h. He will get far more range out of a charge.
There is a future for EVs and there is a reason they are outselling diesel vehicles. We talk down EVs in here quite often but they are the future and I very much welcome the Minister's move.
Is Deputy Healy-Rae convinced?
I look forward to Deputy O'Sullivan opening his EV dealership in west Cork. I might make a visit because I have not managed to make the investment just yet.
What about Tramore?
We can get them all right.
There is a quote from a guy called William Gibson that has lived in my head quite a lot recently. He said a long time ago that "the future is already here - it's just not evenly distributed". That is very much the case with a lot of what we are talking about at the moment. I see Deputy O'Donoghue nodding in agreement. There is a fundamental equity issue in terms of the cost of fuel and the cost of motoring for low-income families who cannot afford to make the transition to an electric car, although they might like to. One of the provisions that gave rise to the financial resolution we dealt with earlier was an effort by this Government to put the future within reach for more families by removing the VAT that had been levied up to now on solar panels. That is a step in the right direction and it will put the clean energy transition within reach of normal families. We can do things like solving energy poverty at the same time as addressing the climate challenge, which is very necessary.
While I am possibly speaking more broadly than the amendment we are considering, I want to look at the idea of the taxation of petrol and diesel. That conversation actually fits in with the discussion around the move to electric vehicles and around the use of kerosene for heating. In that context, there is an urgent need to invest in retrofitting and in heat pumps. Indeed, the latter is something I would have liked to see the VAT rate change extended to so that we could put more heat pumps, which are an expensive piece of kit, into people's homes. I would like to see the electrification of their heating systems come within the reach of more and more families. This Government should do whatever it can to make that happen for people because it is part of the just transition process.
Looking at the longer term and the issue of excise duty on diesel and petrol, the Commission on Taxation and Welfare spoke about this at length in what is an excellent document. My brother, for example, drives an EV.
We have them in Tramore. He is not paying that excise duty on petrol and diesel at the fuel pump. This is a real case of where the future is unevenly distributed. Those people who can make the jump to EVs have not suffered in the same way from the escalating fuel prices we have seen at the pump. As a State, we need to be cognisant of the future implications for the electrification of our transport system and, in particular, the future implications for our taxation revenue. People may think it is an insignificant amount but I doubt that it is. Certainly people at the pump know that it is not an insignificant amount. If we add up the combination of carbon tax, excise duty on fuel, vehicle registration tax, VRT, and motor tax, combined these contribute €5 billion annually in tax revenue to this State. That is about 8% of all the revenue we take in as a State. As we increasingly electrify our fleet, we are going to have to look at things. Norway is actually a few years ahead of us. We have for the first time seen electrically powered vehicles surpass diesel sales this year. Norway is a good distance down the road on this and found it had to unwind some of the preferential supports offered to electric vehicles. These include such things as VRT or motor tax treatment year on year. We will have to re-examine that for a couple of reasons. One reason is that it will create a significant hole in the public finances unless we move in that direction. Another reason is that excise duty fulfils a number of roles. One of the reasons for taxation is to fund the State but it is also to influence behaviours. Much as VAT does, excise duty drives a certain behavioural response. If we lose that behavioural response, we end up with congestion. A traffic jam of EVs looks absolutely the same as a traffic jam of petrol or diesel vehicles. To reference what Deputy O’Sullivan said, EVs are a good solution in rural areas where people probably have room to get solar panels on their rooftops and have driveways where they can plug in their cars. However, they do not solve congestion. They may be a solution for rural transport but where the Leas-Cheann Comhairle lives, in Galway, the traffic congestion that plagues that city-----
That is why they need to build the bypass.
-----as much as any of the cities will not be solved by electric cars. We have to look at that issue. We also have to consider whether we need to incentivise at this point what is a transfer to wealthier people. If you are wealthier, you can afford to invest in an EV. By investing in an EV, you have managed to put yourself onto a smart tariff to charge your car overnight and get electricity at a lower rate. You could have solar panels on the house. You are also getting the tax breaks in terms of VRT and the year-on-year motor tax, and you are not paying the excise duty at the pumps which has been such a feature of the spiralling cost of energy and inflation throughout the country. This is a broader discussion than what we are looking at in regard to this specific amendment.
In the longer term, we need to have an open and honest conversation about the future of taxation in Ireland particularly as it relates to our transport system. It was referred to at length in the Commission on Taxation and Welfare document. That document was not given enough attention when it was released. It was characterised in a way that I would not agree with. It is a serious piece of work and it does some long-term honest thinking about how we can regard the income of the State holistically and make decisions that will guide us and put us onto a firm financial footing into the future. Apart from that, and I tried to stick closely to the topic of the amendment, there are a number of measures in this Finance Bill that will be welcomed by communities throughout Ireland. I will be happy to endorse it when the time comes.
Debate adjourned.