Mr. Damien Geoghegan:

On behalf of the association, I would like to make the point that local authorities and local government are underfunded, considering the number of services we are required to deliver at local level.

The notion that we have to sit down every year, a couple of months before we are presented with our budget figures, and set the local property tax rates for our areas is totally unacceptable. No business would operate in such a manner but we are expected to do so. It is the view of the association that local property tax raised in a particular area would be retained in that area. There is obviously a cost to that. Where is the incentive for a larger urban local authority to maintain its local property tax, or even increase it, considering that a large chunk of it is automatically taken away for central government funds? There is no incentive either to maintain the rate at the baseline figure or increase it every year. Local authorities should be allowed to retain their local property tax revenue in the area in which it is raised. That would certainly require the elimination of the equalisation deduction from the authorities where it would apply, and there would be a cost of approximately €100 million in this regard because one would have to ensure those benefiting from the equalisation fund would continue to do so.

The notion of returning one's local property tax to the baseline figure every year is unacceptable. One is making a request of local authority members every year, if they are brave enough and if they have decided to increase the local property tax by any figure or percentage, and the following year they are asked to do the same again. The increase does not remain in place. It allows those of a particular persuasion to go in every year and make the proposition that the value can be reduced by 15% when, in fact, that is not the case. If a local authority member increases the local property tax, for whatever reason, that increase should stay in place; it is as simple as that. That is exactly how one would operate with rates, for example. If one increases the rates one year, the increase stays in place.

With regard to rates, we acknowledge collection has improved but there is certainly room for further improvement. Owing to a delay in the rates valuation office making a rates valuation, one business could have rates imposed on it while the business next door might not. We acknowledge that the former Minister, Deputy Simon Coveney, made allowances in this regard. He has allowed local authorities to impose temporary rates on a business until the rates valuation office sets the rate for it. We certainly welcome that.

Finance at municipal level is a major bugbear of all local authority members right now. It is probably the one weakness in the system. It is a very obvious weakness. It has led to a number of calls on proposals to reintroduce town councils, precisely because, at budget time at municipal level, a major change took place. In the past, a town council was presented with a major budget document at budget time but it is now presented with a one-page document. The latter is not very clear with regard to expenditure and income. There needs to be a major analysis of how municipal districts are financed.