Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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I will first make a general comment. It is important for the committee to be clear that there are two separate funding issues in this discussion. The first is water charges as a contribution to the operational costs of the utility and the impact the abolition of water charges would have on the Government's deficit and on meeting the fiscal targets. A separate issue is water charges as part of a business model designed to take the utility off balance sheet to facilitate it to borrow in its own right and not to negatively impact the Government's debt-to-GDP ratio. These are two separate matters that often get confused in the public debate.

My first questions are to the Department of housing. Ms Graham mentioned the figure of €239 million as being the overall cost of the abolition of water charges, but that is obviously the gross figure. Could she confirm to the committee the net figure when the conservation grant, the cost of the billing regime, etc., are taken out? That is the really important figure from the point of view of the deficit and fiscal targets. She referred to the figure of €50 million annually for non-public domestic water services. Will she clarify whether that is the current cost to the State of its subvention? If domestic water charges in the public system are to be abolished and there is to be equity, namely, if people not on the public domestic water system were not to pay anything, are there calculations of what the additional cost of that would be? The Minister, Deputy Coveney, cited a figure of €14 million in a Sunday Timesinterview at the start of the year as the estimated cost of an excess water charge, as recommended by the expert group. Is this a calculation from Ms Graham's Department or from Irish Water, or does it come from somewhere else?

I know this is not the meeting to discuss fines and compliance, but just so people are clear, can Ms Graham outline a timeline in the case of, for example, the infringement proceedings in the urban wastewater directive? This is an infringement proceeding that has been going on since 2012. Some people think fines arrive immediately. I ask the question so that people might have a sense of this.

Regarding fiscal impact, can the Department of Finance confirm the exact financial impact on the 2018 structural deficit target deadline if water charges were abolished? Could it also confirm to the committee that this could be offset by, for example, fewer tax cuts - for example, an amendment to legislation effecting the abolition or the phasing out of the USC? Could this cost be offset at the discretionary tax level?

Mr. McCarthy said it is unlikely Irish Water will be classified as off balance sheet in the medium term. What does he mean by this? The reason I ask is that in Irish Water's capital programme, its capital investment significantly increases from 2019 onwards from €500 million currently to €777 million and then up to about €900 million. Would this need to be off balance sheet to meet those borrowing targets, or would it allow the Government's debt reduction targets under the fiscal rules to be on balance sheet with that level of expenditure?

I have one final question about this. Clearly, if the bulk of Irish Water's capital investment programme is borrowed - this is so under the current plan - there is an extra financing cost for that. I have asked this a couple of times during Question Time. I would like to know the additional cost to Irish Water or to the taxpayer from the borrowing over the eight years of the plan of the €5.5 billion. Can we have the prediction for this?

I appreciate the economic impact of the abolition of water charges, and I know this is sometimes difficult for economists but there is also a social impact of funding something through usage charges rather than general taxation. Will the Department of Finance factor not just the straight economic impact but also the social impact into its assessments as to which is the best taxation model?