James Bannon (Longford-Westmeath, Fine Gael)

This Bill is a legislative measure to give credence to the futile flutterings of the Minister for the Environment, Heritage and Local Government in regard to the provision of a new motor tax system based on CO2 emissions for new and pre-owned imported cars registered on or after 1 July 2008. A motor tax to reduce CO2 emissions may achieve an increase in revenue to the Exchequer but will have little or nothing to do with engine efficiency or the environment.

If the Green Party wants to appear green, that is, environmentally friendly, it will not accomplish it with this Bill. Engine efficiency is about using the smallest amount of fuel over a set distance. The motor tax, however, is a flat rate that takes no account of the amount of fuel used or the emissions produced over a particular distance. It will do little to help our environment. Pretending that the size of the engine is the sole factor in greenhouse gas emissions is to use the other meaning of the word "green", which is "naive". It would be far more logical to tax fuel on the basis that the more efficient one's car, the less fuel one uses, leading to the desired environmental impact.

Registering or owning a car does not cause emissions; driving it does. If the Minister is serious about reducing CO2 emissions to meet our Kyoto targets and protect our environment, he should consider scrapping VRT and motor tax and replacing them with an additional tax on petrol and diesel. Ten years of bad planning, urban sprawl and public transport chaos in this city and in many rural towns will not be undone by the measures in this Bill. Taxpayers will continue to pay more than €60 million in carbon credits. The Government should be ashamed that we are in the position of having to purchase these credits. Another limitation of the Bill is the provision that the tax will be payable at the time of acquisition or of first putting into service of a passenger car. As registration is a once-off tax, this may not be the most effective means of controlling CO2 emissions as future usage will not be taken into account.

We cannot simply point an accusing finger at consumers. A survey conducted by National Irish Banks reveals that consumers are getting ready to embrace the move towards energy efficiency, such as the use of diesel engine vehicles. According to the survey, 72% said that following the introduction of the new regulations, they would, or would be likely to, buy a diesel rather than a petrol car to decrease their CO2 emissions. This is indicative of the level of commitment among citizens to meeting our Kyoto targets.

Despite this, who will carry the can for the Government's panic move to avoid EU sanction? Yet again, taxpayers are being asked to make up the shortfall. The proposed increase in motor tax is nothing more than a stealth tax to the tune of €83 million. The Minister's assertion that there will be no increase is a false promise. There will undoubtedly be an increase. We should not put all the blame on the withering Greens, however, but should give equal billing to their colleague, the Tánaiste and Minister for Finance, Deputy Cowen, who sold the Minister for the Environment, Heritage and Local Government down the river in his Estimates for 2008.

In one of the most negative assessments of our economy since 1999, the European Commission reports that Ireland's fiscal position is expected to register a noticeable deterioration in 2007-08. The Commission's economists describe the Government's projections of a decrease in real economic growth from 4.8% in 2007 to an annual average of 3.5% until 2010 as "plausible". In other words, like we in opposition, they are taking the Minister's economic forecast with a grain of salt.

Another attempt by the Minister to impose a penalty on fuel consumption was to give a sudden and ill-conceived blow to passenger transport services by removing the excise duty on fuel used by this sector. Such a plan would sound the death knell for private coach operators and deliver an appalling blow to rural communities that do not have access to regular public transport services. In an outrageous plan, €29 million of tax relief was taken from public and private bus operators to comply with an EU directive, but those affected were kept in the dark until the last moment by the Minister. The bus operator in question only accidentally discovered that the rebate was to be removed. So much for transparency and openness. How green is green? What way is this to conduct the running of the Department of the Environment, Heritage and Local Government?

Instead of trying to take away people's livelihoods and adding to the already dismal rural transport situation, it would serve the Government better to tackle CO2 emissions by providing an efficient and joined up public transport system to discourage car dependency. Given that we do not even have a viable transport infrastructure in our capital city, it is not surprising that transport continues to be the dominant growth sector, with emissions 682,000 higher in 2006 than in 2005. This represents a 5.2% increase on 2005 levels and a 165% increase since 1990. The EU has informally pointed to the rapidly rising emissions from our transport sector as the cause of our very high carbon footprint relative to our population and geographical size.

If the Minister were committed to the environment he would advocate alternative, cleaner modes of public transport. The bottom line is that the Government has failed to facilitate people in switching from private cars to public transport. There is no public transport system worth talking about in this State and that is firmly the fault of the Government. There is nothing in the programme for Government about reintroducing rail freight as a method of tackling CO2 emissions, despite the fact that fuel consumption by road freight increased by 255%, or 9% per annum, from 1990 to 2006. Such statistics go a long way to making a joke of the Minister's promise to cut national emissions by 3% per year in the lifetime of the Government. He had better get a move on because he does not have much time.

Not only is the way the Minister is administering the new CO2-based car tax regime weak on environmental impact, it will also potentially destabilise the second-hand car market. Potential buyers will quickly realise that if they travel north of the Border or to Britain to purchase a second-hand car and then re-register it here, they will be eligible for the new CO2 tax system and thus save a significant amount of money in tax as compared with the purchaser of a similar vehicle in the State.

Once again the Government has failed to follow through on an issue and to show evidence of joined up thinking. In supposedly solving one problem, the Minister for the Environment, Heritage and Local Government is creating several others. Moreover, he is not even solving the problem at hand, which is Ireland's CO2 emissions.

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