Oireachtas Joint and Select Committees

Wednesday, 6 November 2019

Select Committee on Finance, Public Expenditure and Reform, and Taoiseach

Finance Bill 2019: Committee Stage (Resumed)

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein) | Oireachtas source

This relates to the increase in carbon taxes. As I stated about the increase in excise duty on tobacco products, taxation can have the effect of increasing revenue or changing behaviour. In some cases it can do both. However, this carbon tax needs to be about changing behaviour because of the climate emergency. The reality is that this increase will have little, if any, effect on behavioural change because in many cases there are no alternatives in rural communities. We have a tax that will just make those households and individuals poorer.

It is important to note from the ESRI's June report on carbon tax that the authors state categorically that carbon tax is "regressive, with poorer households spending a greater proportion of their income on the tax than more affluent households". The report also states an increase in carbon tax would disproportionately affect rural households and "particularly rural households in the lowest income quartile". The poorest households in rural communities would be the heaviest hit. Most worryingly, the report indicates that single households with children are most affected by this policy. It indicates that whereas the tax would be borne by everybody, the cost is greatest for poorest households. It indicates that people living in older dwellings and low skilled workers have larger costs. The Minister's Department has acknowledged to Deputy Cullinane that it is a regressive tax which will make families poorer. That is not what we need at a time when we require a buy-in among the wider public to avail of the opportunities to tackle the climate agenda. There should be significant investment in areas such as renewable energy and public transport to make opportunities available to the communities affected, particularly with reference to the just transition. Deputy Naughten addressed many of these concerns yesterday and today, particularly as they relate to the midlands which will be hit heavily. The Government's climate policy can be reduced to attacks that will, in effect, make households poorer. As we know from the ESRI study, the households that will be hit hardest are the poorest households in rural communities and households with single parents.

This is the wrong approach. We support many taxes such as excise duty on tobacco products and the sugar-sweetened drinks tax as there is an available alternative. Increasing the price of diesel, petrol or home heating oil when alternatives are not available for these households to move away from such energy consumption is counterproductive. It will not achieve the necessary buy-in into the other opportunities available to the State in tackling the climate emergency. There are benefits at a global level, but there are also opportunities for all communities here if we deal with the matter properly. This regressive tax should not be put in place.

I ask about the commitment in the Oireachtas committee report that had a majority view that carbon taxes would be introduced. The commitment was that a report would be produced on the impact on poverty levels. When was the report published and where can we access it?

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