John Deasy (Waterford, Fine Gael) | Oireachtas source

It is clear that the revaluation process being undertaken by the Valuation Office in the city and county of Waterford will send a considerable number of businesses to the wall. The revaluation is leading to increases of over 300% in some cases and will affect the retail sector in particular, with some of the larger industrial users getting discounts of up to 40% for some reason. The average increase for retailers seems to be between 50% and 100%. One of my local newspapers reported the town clerk of my home town as saying not a week goes by without another business closing down.

Many businesses have been forced to close and the surviving businesses - what is left of the rates base - are struggling. It seems their reward for staying afloat in this environment is a doubling or tripling of their commercial rates.

The Dungarvan Chamber of Commerce stated recently that if businesses fail as a result of excessive rates demands, as they surely will, the relentless logic of the new system will merely redistribute the same rates burden over an ever-diminishing cohort of ratepayers. In many respects, the Government had the answer before it asked the question. For example, a local authority needs €1 million in rates, the Valuation Office undertakes its technical exercise and an analysis of rental values, and the certificates are then issued. The problem is that the taxation system fails to take into account ability to pay, and therefore it is badly flawed. It does not take into account the fact that the overall rates burden is itself unsustainable due to erosion of the rates base. This is a constant case of diminishing returns. We talk endlessly in this Chamber about the creation of jobs, and correctly so. However, if the various arms of government such as the Departments of Finance, Public Expenditure and Reform, Jobs, Enterprise and Innovation and Environment, Community and Local Government, as well as the Office of the Taoiseach, do not consider and mitigate the impact that a doubling or tripling of commercial rates would have on a business, one begins to ask whether the Government is aware of the economic reality for these businesses.

Ministers must not say continually that the Valuation Office is statutorily independent and that it is outside their responsibility. They cannot run away from the issue; nor should they keep talking about jobs and small businesses while ignoring the impact this will have.

These new revaluations are being done under the Valuation Act 2001, which will be revamped by the Valuation (Amendment) (No. 2) Bill 2012, which is currently before the House. The most significant change in the new Bill is the provision on assessment or self-assessment. When this new Bill is signed into law, ratepayers will be able to self-assess or value their own properties. When the new legislation is enacted, will every ratepayer, including those who are being assessed under existing legislation, be allowed to reassess his or her property under the self-assessment regime? If they succeed in agreeing a lower commercial rate payable, will they be eligible for a retrospective rebate from the State? In effect, within a year or so, businesses in different parts of the country will be valued for commercial rates under two different systems. I ask how these two systems will be integrated as one.

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