John Gormley (Dublin South East, Green Party)

Rates on goods and other vehicles will also increase by 4% with no increase for electric vehicles. Trade plate licences will also increase by 4%.

The new rates will apply to motor tax discs and trade licences taken out for periods beginning on or after 1 January 2009. The increases maintain the strong incentive in the motor tax system, which this Government introduced last year, to switch to lower emission cars when purchasing new vehicles. While increasing any tax is not popular it should be noted that motor tax increases since 2000, including the increase now before the House, are below the inflation rate over the intervening eight year period. It is anticipated the proposed increases in motor tax rates will raise €40 million extra for local government next year.

On the experience of three months' cars sales since the new VRT and motor tax systems came into effect we are already beginning to see a strong trend towards the purchase of new cars with lower emissions.

See this speech in context