Seán Connick (Wexford, Fianna Fail)

This time when I changed, I went green. I am delighted with my choice as diesel engines have become very fuel efficient. To anyone considering changing their car, I recommend they choose the diesel option.

As well as penalising the environmentally conscious motorist, we are also creating problems for the motor industry. It will be difficult to sell new lower emission cars between now and 1 July 2008. The second-hand car market will suffer adverse effects for the next five years because it will be more advantageous for customers to purchase second-hand cars in England, import them to Ireland and then register them.

While I recognise the intentions behind the Minister's proposals and commend him on taking this initiative, I hope he will consider the impact this anomaly will have on both environmentally responsible motorists and on the motor industry. The most efficient way to overcome this anomaly would be to allow cars to be road taxed at the new environmental rates on renewal, provided these rates are lower than the current rates and that the CO2 data was recorded by the State at the time of registration.

A recent study undertaken on behalf of the Society of the Irish Motor Industry has shown the cost of making this change would come to €26.8 million. However, the study also showed that a decline of 1.5% in new car sales this year as a result of this anomaly could cost the Exchequer €27.8 million in lost VRT and VAT. These figures show the cost of implementing this proposal to rectify the loophole in the new regulations would be less than the potential lost revenue to the State than if allowed to stand. I urge the Minister to make this small amendment and allow all lower emission cars, irrespective of when they were first registered, to come under the new VRT regime.

The disabled drivers and disabled passengers scheme allows for the repayment of VRT and VAT on the purchase of a vehicle and the repayment of VAT on the adapting of a motor vehicle for use by a disabled driver or disabled passenger. It aims to offset some of the considerable costs involved in providing suitable transport for people with disabilities. The vehicles must have an engine size less than 2,000cc for a disabled driver and less than 4,000cc for a disabled passenger. The costs of VRT and VAT relating to purchasing and adapting the vehicle will be repaid up to a maximum of €9,525 for a disabled driver and €15,875 for a disabled passenger.

Unfortunately, these maximum repayment rates were set over 20 years ago and have not been increased since. The increase in the cost of motoring in that time means these rates no longer reflect the costs involved in purchasing a car and adapting it for use by a disabled driver or disabled passenger. The maximum engine size of 2,000cc for a disabled driver and 4,000cc for a disabled passenger places strong limitations on the ability of people with disabilities to choose a vehicle suitable to their needs.

I strongly urge the Tánaiste and Minister for Finance to make considerable changes to the disabled drivers and disabled passengers scheme before the next budget. He should increase the maximum repayments rates for the first time in over 20 years, index link them in future, remove the maximum engine size of a vehicle that can be considered under this scheme and revise the medical criteria for applicants.

I commend the Minister for the Environment, Heritage and Local Government, Deputy Gormley, on introducing a new environmentally-based system of motor taxation. His proposals will have a profound impact on the motoring public in the years ahead. However, he must consider a small change to his proposals to end the anomaly which appears in his scheme.

I welcome the Bill.

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