Oireachtas Joint and Select Committees
Thursday, 7 November 2013
Joint Oireachtas Committee on Environment, Culture and the Gaeltacht
Association of Municipal Authorities of Ireland
10:35 am
Councillor Tommy Moylan:
I thank the committee for the opportunity to address it. Another proposed amendment relates to section 29 of the Bill. We propose that on page 36, between lines 3 and 4, the following should be inserted: "That each municipal district may, in respect of that district, vary the commercial rate and local property tax within that district from the amount applicable to the county council or the city and county council concerned.".
This amendment would allow each municipal district council to have the power to vary the commercial or local property tax within the municipal district area in order to carry out specific projects agreed by the members of the municipal area as part of its budget. When Putting People First was published in October 2012, section 6.7.8, relating to financial arrangements, had a proposal for a:
provision for members at district level to levy an amount in the district (or a town within the district) additional to the general commercial rate level (possibly by means of an arrangement similar to the “town charges” system for former town commissioners and subject to any appropriate requirements), with a “supplement” to the general rate being adopted as part of the budget process, collected at central county level, and the additional amount for a district being allocated accordingly;That provision has not been transferred to the Bill, despite the fact it would give more autonomy to local municipal districts. If they had specific projects that they wanted to carry out, they would have the power to levy an additional rate if deemed appropriate and perhaps with the agreement of the business people within the area. For example, this could relate to a town enhancement scheme. A full county agreement would not be required and agreement could be reached on a district level and applied accordingly.
In section 29 and also on page 36, our next amendment would be to insert the following between lines 3 and 4: "Each municipal district may, in respect of that district, set an additional commercial rate for premises occupied by large commercial entities which exceed such thresholds such as turnover or other economic activity and as may be prescribed." Each municipal district should be able to levy additional rates on certain types of businesses, particularly larger businesses such as multiples, which can afford to pay extra levies. The income that is generated should be ring-fenced within specific areas and used for projects to enhance town centres affected by out of town developments. We believe the Minister has opened the door to this possibility by introducing the base year adjustment as part of the Bill.
Everybody knows the "Tesco tax" that has been adopted in Northern Ireland and we believe in the base year adjustment. In all this local government reform, everything has been changed except the current rating system applying in this country. Small and medium local businesses are finding the current economic climate extremely difficult. The same rating system is applied to the independent retailer as to the large multiples. It is now time for the rating system to be examined in this country and a provision like this would give a badly needed shot in the arm to small local and independent businesses that could benefit from a measure like this and relieve pressure. I appeal to members to take that on board.
I appreciate that many of these proposed amendments relate to the financial measures. The next one would to delete lines 4 to 6 of section 29(2) on page 36 and substitute: "The base year adjustment shall be determined in accordance with subsection (3) and (4) by a rating authority with agreement of the members of a municipal district area where the base year adjustment will apply in respect of each year of the adjustment period for each of the specified areas of the rating authority." This relates to the harmonisation of the rating system across town and county councils. Generally, across the country town councils' annual rateable valuations would be lower than the county rate and there is a provision in the Bill for these to be harmonised over a period by way of a base year adjustment. The provisions would have this done in a three to ten-year period but we argue the members of the municipal districts should decide the period. In my county of Tipperary, there is variance in commercial rates and the annual rateable valuation between some town councils and the county of between 2% and 11%. My own area of Nenagh is 2% behind so we could achieve relatively short-term harmonisation but in south Tipperary, including Carrick-on-Suir, they are 11% behind the county rate and so might require a little more time to harmonise the rate. This should not just be a blanket harmonisation period across a county and each district could decide what best suits.
The next proposed amendment would delete line 22 on page 37. This relates to the proposed introduction and standardisation of 50% refundable rates on vacant commercial buildings on a national basis. The amendment would leave section 14 of the Local Government Act 1946 as it stands. If the 50% refund is to be introduced, it should happen on a phased basis of up to ten years, similar to the base year adjustment. This provision in the Bill took everybody by surprise, as the Minister intends to standardise 50% refundable rates on vacant buildings across the country. Currently, 100% of refundable rates are applicable on vacant buildings, barring the cities of Cork, Limerick and Dublin, but the Minister is intending to standardise the practice that only 50% of refundable rates would be refundable on vacant commercial buildings. This is an anti-business measure and in the current economic climate it is hard enough for rate payers who may have a vacant building because a business has been closed. They would be penalised by having to pay 50% of rates on a vacant building. This could lead to many buildings being devalued for rateable purposes and a change of planning being brought about for a building in order to avoid the clause. That could make it more difficult for new businesses taking over such properties. If the provision remains - we are seeking its deletion - it should come about on a ten-year phased basis like the base year adjustment.
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