Arthur Morgan (Louth, Sinn Fein)

The Bill represents yet another attempt by the Government to raise revenue through inequitable taxes. This is strange given that this right-wing Government and its leading ideologues pride themselves on low levels of taxation. While the Government imposes low levels of taxation, this applies only to the very wealthy and speculators while crippling ordinary working people and the lower paid through stealth taxes. The Revenue Commissioners 2002 survey showed 18% of the top 400 earners in the State pay an effective tax rate of less than 15% while benefiting from a raft of property based tax shelters created by the Government and retained and extended in the Finance Bill before the Houses of the Oireachtas. There is clearly no hope that the Government will introduce reforms to create an equitable tax system which would bring about a fair distribution of wealth.

Sinn Féin has repeatedly criticised the Government's habit of addressing revenue shortfalls through stealth taxes rather than through the general taxation system. The Government is not concerned at the impact measures such as this unwarranted increase in motor tax will have on the less well-off. All policies and, in particular, tax policies should be poverty proofed to asses their impact. The proportion of our population living on less than 50% of the average income has increased since 1997, when the previous Government took office. The national anti-poverty strategy outlines that nearly 25% of children in the State are living in poverty, representing some 300,000 children. This increase cannot be justified by the fact the money is being used for the funding of local government. We need immediate reform of local government funding to ensure it is properly funded and does not have to rely on arbitrary grants from the Government such as the revenue raised through this measure.

Sinn Féin strongly supports public transport and believes that proper funding for the sector must be a Government priority. This Administration needs to begin the process of enabling people to move away from the excessive use of private vehicles. We support measures designed to reduce private car usage, which is both damaging to the environment and causes huge traffic problems, especially in the Dublin area. However, we are realistic enough to see that because the State has a severe deficiency of public transport, especially in rural areas where people are unable to make a behavioural change to public transport. We have not reached a stage where the alternative of public transport is available widely enough to allow motorists to use it in place of private transport. This problem is especially acute in rural areas.

This is where we have a problem with the proposed increase. Motorists, especially young motorists, are crippled by insurance, tax and increasingly by tolls on the State's roads. The Government needs as a matter of urgency to increase the funding for public transport. The Minister of State said that all money raised from this measure will be put into improvements to non-national roads. However public transport in rural areas is in far greater need of investment. Rather than introducing this increased taxation on all motorists, the Minister of State should introduce measures linked to usage, such as carbon tax, which would encourage people to move towards public transport. Such a move is urgently needed to reduce CO2 emissions, which have grown well beyond the limits permitted by the Kyoto Protocol.

The State is facing a choice between paying enormous fines and spending huge amounts of revenue on emissions trading. We should take our responsibilities seriously and should not resort solely to emissions trading. The Exchequer will benefit from any actions which result in a reduction in emissions.

What is the Government doing to put in place proper public transport in rural Ireland? Rural citizens suffer disproportionately as a result of measures such as this motor tax increase as they have no choice but to use private transport. Why is the Government not increasing investment in rail? How will it respond to calls for the opening up of the western rail corridor?

The Minister, Deputy Cullen's, mishandling of the State's obligations under the Kyoto agreement is reprehensible. The recently announced decision that our biggest industries will not be required to cut levels of carbon dioxide emissions is deeply disappointing, especially to those who are concerned about the effects of global warming and the future of the planet. It has been known for years that if we are to address the problem of global warming and reduce emissions output all states and governments will need to make difficult decisions. The Minister does not have the courage to stand up to vested interests in order to tackle global warming. He has capitulated to pressure from large industries and his Progressive Democrats Cabinet colleagues. Ordinary citizens and consumers will end up paying when carbon tax is introduced in 2005. If the tax is introduced on transport without any corresponding increased investment in the public transport sector it will achieve nothing.

Some roads have received up to 85% funding from the European Union. Rather than benefiting from this, however, Irish motorists are expected to pay exorbitant tolls, which have themselves increased. This is grossly unfair. The motorist continues to be a soft target in the funding drive of the Department of the Environment, Heritage and Local Government. The poor condition of roads is also a problem. We are told that the local government fund is being distributed to local authorities, which is acceptable, but it is not adequately dealing with the condition of the roads.

The Bill provides for a 5% increase in motor tax, but inflation is running at less than 2%. How can anybody stand over such a vast increase? The Government is being short-sighted on the issue of excise duty on petrol and fuel generally. In Border areas a vast number of people come from the North to buy their fuel because of lower prices. The Government is missing an opportunity by not keeping revenue low on fuel prices, because in these areas alone millions of euro are generated in this way. It is unfortunate that the Government has not seen fit to capitalise on this. Not only does the price differential provide jobs in Border areas, it also brings revenue into villages along the Border which for many years have been starved of that type of trading.

All types of people in rural Ireland, particularly older people, find that a car is essential. They cannot get to the shops or the post office. Very often their local post office has been closed and they must go elsewhere for their pensions. They cannot get to Mass or avail of services without a car. These are the people who can least afford to pay these taxes. The 5% hike in motor tax will severely hit them. The Government has made a major mistake. I ask that the Minister reconsider the Bill.

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