Phil Hogan (Carlow-Kilkenny, Fine Gael)

Furthermore, it leaves the possibility that a car purchased in the State prior to 1 July 2008 could be exported and then imported again after that date and thus be subject to the lower taxation rate. This is an anomaly.

The Minister recently stated in a parliamentary reply:

In addition, it is essential that there is certainty and accuracy in terms of CO2 ratings. Under both the new motor tax and VRT systems, the CO2 rating will be based on the car's certificate of conformity, under EU type approval law.

In the light of this clear statement, it seems the door is open to car purchasers who have a valid CO2 certificate, prior to 1 July, to reclaim the difference in VRT between the higher cc based rate and the CO2 rate and, furthermore, to have the car's annual tax rescheduled at the CO2 rate.

There is another anomaly. Given the contribution motor transport makes to CO2 emissions, if the Minister is concerned about meeting our emissions reduction targets, why did he not ask the Minister for Finance, in the context of the Finance Bill, to reform the benefit-in-kind scheme? The more one drives, the greater one's contribution to CO2 emissions. However, anybody who requires a car for their business is encouraged to drive as many miles as possible to meet the threshold for drawing down the maximum benefit-in-kind. This is against everything we seek to achieve. A modest change to this regime would have made a major contribution. An opportunity has been missed.

I am amazed to read in one of the newspapers today about the latest conversion of the Society of the Irish Motor Industry, SIMI. It welcomed the budget announcement but has been getting it in the neck since from motor dealers as a consequence of the uncertainty that was created. The VRT changes should have been introduced on 1 January. If people are going to purchase a new car, they tend to do so in the early months of the year when the new year registration is still novel. There will probably be a spike in sales in the first several weeks after the provisions are introduced in July. After that, however, people will wait until 2009.

Motor dealers are encountering great confusion among consumers. In addition, there is no clarity from the Revenue Commissioners in regard to labelling. The Revenue Commissioners seem entirely confused as to how they will implement this regime. Like motor dealers, they have no information to give to consumers. The Society of the Irish Motor Industry would be better off trying to get answers to these questions for the benefit of consumers than belatedly seeking amendments to the scheme. I welcome SIMI's conversion to the reality of the situation, which has been related to it by dealers. The utopia it expected to arise on 1 July has been replaced by the realisation that a mistake has been made. The proposals have created genuine confusion and problems for customers and dealers. The SIMI now seeks an amendment to allow people who purchase a car before 1 July to be taxed at the new rate. We must give people the benefit for decisions they make now.

The Minister claims his CO2 based car tax system is a green tax that will reward people for buying clean cars. However, this applies only if one is well off and can afford a new car, as only those who purchase new cars can take advantage of this new system. Purchasing a new car is a major decision, which one does not make every year unless one has a company car. Consumers change their cars every three years, on average. It is a significant decision to spend a large amount of disposable income net of tax on what is essentially a luxury item but which is essential for many people given the lack of reliable public transport. The Minister has not given the benefit to those who make the purchase before 1 July, regardless of whether it is a second-hand or new car. Not everyone purchases a brand new car. As soon as one drives a new car out of the garage it has already decreased in value by some €2,500.

We must co-operate as best we can to facilitate a regime where motorists are rewarded for purchasing cars that serve to facilitate our overall objective of reducing CO2 emissions, regardless of whether they are new or second-hand or when they are purchased. There will be a significant reduction in the contribution from motor tax to the local government fund next year if people take the right action in terms of adjusting their purchases along the lines of the VRT and motor tax bands. The Minister will then have an even more difficult time with the Minister for Finance when it comes to the Estimates for 2009. We will deal with that when we come to it. This is the type of approach that must be taken if we are serious about tackling the issue.

I am sure the Minister will engage in consultation with the haulage sector. Putting freight on rail is the way to go and would make an enormous contribution in reducing greenhouse gas emissions. We have not yet heard from the Minister or the Minister for Transport how the haulage sector will be required to make its contribution to reducing emissions. I understand an announcement on sustainable transport will be made in the near future, possibly next week. Perhaps this matter can be addressed at that stage.

The Minister has resisted the calls for retrospection by claiming that it is not possible, under this legislation, to implement a regime that would allow people to benefit retrospectively from lower emissions. I suggest that there is a way around that. On 21 August 2001, one of the Minister's predecessors, Deputy Noel Dempsey, made it law that the CO2 output of a car per kilometre, as well as information on the car's fuel consumption, has to be displayed at any new car's point of sale. Therefore, information on CO2 output per kilometre for any car that is on the road since August 2001 should be known and could easily be transferred into the new CO2 car tax system. If the Minister is serious about helping those who make sound environmental decisions, he will consider using the information that is available to him.

I do not think the current proposals will help us to meet our objective of decreasing emissions from the motor transport sector. The Government's climate change strategy predicts that the rebalancing of VRT and car tax in favour of greener cars will save an average of 50,000 tonnes of CO2 a year, which is just a drop in the ocean when we are trying to save 8 million tonnes. To put it in context, CO2 emissions from the transport sector have increased by 682,000 tonnes in the past year. We could go much further with this measure, which will save just 50,000 tonnes, while meeting the objectives of the transport sector to a greater extent than we are doing at present.

I hope that the Minister will consider some of the suggestions we have made and rectify some of the anomalies we have highlighted. If he makes a meaningful effort to give financial benefits to people who are genuinely interested in doing their bit for the environment, he will get the co-operation of Deputies on this side of the House. That is the kernel of my approach. The Government's objective, as outlined in the programme for Government, of achieving a 3% reduction in carbon emissions will look like a pipe dream if we do not fast-track certain measures. We need to ensure that people feel the benefit of their environmentally friendly behaviour in their pockets. The window of opportunity that exists to avail of the goodwill of people who want to make the right decisions, in the interests of reducing our CO2 emissions, might not last for a considerable period of time. Deputies regularly receive letters from people who are concerned about the anomalies they encounter when trying to act in an environmentally considerate manner. Such problems defeat the purpose of the changes which were made to VRT and motor tax.

It seems that these measures are being introduced simply to increase motor tax receipts. Taxpayers will not feel the benefits of the sound environmental decisions they make between now and 1 July. I have decided to oppose this legislation for those reasons. On Committee Stage, I will propose ways of improving the Bill. Perhaps the Minister will reflect on our suggestions, which reflect the genuine concerns of consumers, in advance of that debate. People are entitled to get the benefit of the sound environmental decisions they make when purchasing cars.

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