Willie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

I am a little confused because I thought the remit of this committee was to consider a mechanism for water charging. A lot of the presentation I have heard seems to be a justification for the existence of Irish Water, which we are not discussing at all.

The expert committee appeared to recommend that there should be absolute equity between people who are getting their water supply through group water schemes and those who get it from the public mains. Has Mr. McCarthy calculated how much of a subsidy would be necessary for the group water supply schemes to bring that about?

In reply to Deputy Ó Broin, I think Mr. McCarthy said the loss of €125 million to the Exchequer from abolishing water charges included the abolition of the water conservation grant. What rate of compliance is that based on? Is it 90%, 95% or the 50% to 55% rate of compliance we have had? In arriving at that figure, is Mr. McCarthy counting in the cost of repaying the borrowings that Irish Water incurs, which I understand is very high?

On page 6 of Mr. McCarthy's presentation he seems to suggest that ring fencing would be more necessary if the model was entirely reliant on State support than if it was reliant on charges plus some State support. What is the logic of that? Is Mr. McCarthy suggesting that if it was not totally reliant on State support and if there were charges, then it would be more certain because the charges could be increased to meet the requirements in any particular year? If Mr. McCarthy is talking about this in the context of capped charges, it does not make any sense to me.

What is Irish Water's capacity to borrow now? Can it borrow and, if so, at what sort of rates? We are told that Ervia has prepared a report on future funding models. I am fascinated by the prospect of seeing what will be in that report. Is it completed and available? If so, can we have a copy of it?

Mr. McCarthy indicated that he did not agree that direct taxation was the correct way to fund a model such as Irish Water. He cited electricity and gas companies but with all due respect, that is a matter of policy. He said that policy was not his remit. When governments are looking at various things they must take into account matters other than the purely economic implications.

I would like Mr. McCarthy to elaborate on one point he made. He mentioned that one of the principles of taxation was that if it cost too much to raise, it was not a particularly efficient form of taxation. Is what has been happening here not a textbook example of that? There are billing systems, interest payments on borrowings and water conservation grants but they are hardly worth the candle. We are still not absolutely clear what the net cost to the Exchequer would be if we were to abolish water charges.