John Gormley (Dublin South East, Green Party)

I thank all Deputies who contributed to this debate and, in particular, I welcome the broad support for the move to an emissions based approach to motor tax. I have listened carefully to the points raise by Deputies and I will address them as far as possible in these remarks. In my contribution on Second Stage last Wednesday, I made it clear that the sole reason for increasing motor tax rates in respect of the existing fleet was to fund local government. I made no bones about that. The increases in motor tax rates, at 9.5% for the majority of the fleet, are well below the rate of inflation since the last increase in rates in 2004. The increases for 95% of the car fleet are between 27 cent and 98 cent per week.

All motor tax receipts go into the local government fund. The fund plays a significant role in financing local government and there is a need to maintain it. Motor tax receipts represent some 60% of the local government fund, which is ring-fenced exclusively for local government; it cannot be used for any other purpose. The increase in motor tax rates is about local government. It is about ensuring that local government is well resourced and is in a position adequately to perform its functions and to provide quality public services across its wide range of activities. Deputies cannot have it both ways. Failure to raise funding through increased motor tax rates would have resulted in significantly reduced allocations to local authorities for 2008 for general purpose funding and for regional and local roads.

Total funding for the local government fund for 2008 is estimated at €1.6 billion, which represents approximately 30% of local authority current funding requirements. The motor tax increases have enabled me to provide for substantial increases in the record levels of funding provided to local authorities in 2007 for general purpose funding and for regional and local roads. In 2008, I have allocated €999 million in general purpose grants to local authorities while €565 million is being provided from the local government fund towards the development and maintenance of the regional and local road network. I am determined that local government will prosper and to ensure that local government remains meaningful and effective in supporting social and economic development across the country. It is for this reason that I have increased motor tax rates.

Deputies have referred to the importance of addressing climate change. Climate change is profound in its implications for the planet and its inhabitants and represents a significant challenge to society. It cuts to the core of modern living and commercial activity. While, in global terms, Ireland's emissions may be relatively small, it is essential that we address the challenge of adapting to a low carbon society. With our EU colleagues, we were to the forefront in bringing the Kyoto Protocol into force. Our efforts to secure global agreement on deep cuts in emissions must be backed up by a commensurate level of ambition at home. The programme for Government and the carbon budget which I delivered last December make it clear that we are up for that challenge.

The move to an emissions based approach to motor tax, which I announced in my carbon budget, gives effect to the commitment in the programme for Government to introduce measures to rebalance motor tax in favour of cars with lower CO2 emissions. It complements the new CO2 based VRT system which is provided for in the Finance Bill. I listened carefully to the points raised by Deputies regarding the introduction of the new motor tax system. They raised issues relating to the starting date for the new system and the possible implications of second-hand imports for the existing fleet. I have examined many of the issues raised and, while some of the proposals put forward would result in certain anomalies, I am giving further consideration to them. I believe there is some scope to bring forward amendments on Committee Stage to address some of the concerns expressed by the Deputies.

I have always said I will listen to good ideas from the Opposition. I thank Deputy Stanton and Deputy Crawford for their constructive remarks. Deputy Stanton was correct in identifying some of the problems that lead to greater car dependency. Clearly, there is a problem with speeding on the roads. I have visited rural areas often and while I consider the cities dangerous enough for cyclists, the rural roads are lethal for them and pedestrians. People drive like rally drivers on many of them. This must be addressed. Deputy Stanton also correctly identified the problem of the weight of schoolbags which is preventing many children from walking and cycling to school. Indeed, I notice many children no longer carry bags on their backs but, as if they are travelling abroad, use wheeled cases for their books. I agree it is preventing children from walking or cycling to school but we must, in the first instance, make it safer for children to cycle to school. The Minister for Transport, Deputy Noel Dempsey, is giving a great deal of consideration to that in the context of his new sustainable transport plan.

Deputy Lynch queried the likely impact of the new motor tax regime on carbon emissions. The national climate change strategy includes the quantified effects of a range of measures in the various sectors. A combined annual saving of 50,000 tonnes is attributed to the rebalancing of motor tax and vehicle registration tax and the introduction of an enhanced vehicle label. This saving is based on indicative calculations contained in a study prepared by Sustainable Energy Ireland and referenced in a report on greenhouse gas emissions projections prepared for my Department in 2006.

As it would not have been possible for the study to assess the impacts of the actual motor tax and VRT changes announced in budget 2008, it is necessary to update the estimate of the saving from these changes. Factors which will be taken into account include the significant increase in car ownership in recent years, the average annual mileage of vehicles in Ireland, the rate of fleet renewal and the projected impact of the tax changes on purchasing patterns. I have indicated that I will present updated figures where appropriate for relevant measures in the context of my annual report to the Oireachtas on the implementation of the national climate change strategy. I envisage that this report will be ready by the end of April.

I thank Deputies for their thoughtful and considered views and I look forward to further consideration of the issues on Committee Stage.

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