Phil Hogan (Carlow-Kilkenny, Fine Gael)

The Bill before the House, the Local Government (Charges) Bill, is probably the most confused legislation brought before the House by the Minister for the Environment, Heritage and Local Government since he took office. With no disrespect to the Minister of State, I am disappointed the Minister is not here to explain how he could have put such proposals to the Cabinet some months ago and have made such major mistakes with regard to the application of the charge that he must now amend these mistakes in the Dáil and Seanad. The Minister accused me, the Fine Gael spokesman on the environment, of being mischievous in raising issues relating to the elderly, but now we have amendments before the House in order to put into effect the concerns expressed by Fine Gael.

The disrespect shown by the Government to the people of Ireland by rushing this important and far-reaching legislation, which creates a precedent with regard to property tax, through the Oireachtas is unacceptable. The decision to rush through a new property tax with only one day's debate is unprecedented in any parliamentary democracy. It seems always to hold true that every time legislation is rushed, mistakes are made. The Minister has made many mistakes in this legislation already and perhaps before the day is out, we will, in the short time available, have teased through some aspects of the Bill and have found other exemptions are required.

Glaring faults were immediately obvious in the Minister's proposals and this Bill is no different. The fact that such a Bill, with little or no thought put into it, can be approved by the Cabinet is very worrying. Fianna Fáil Cabinet Members clearly made no observations or submissions to the Minister on the legislation. The Cabinet has approved the Minister's attempt to put a property tax on the elderly who reside in nursing homes and on those who built granny flats to care for their elderly parents. It even allowed for a tax on mobile homes until it was forced into an immediate U-turn after the Minister got an earful from the Joe Duffy radio show.

The Minister will claim that it was never his intention to levy these taxes on the elderly and carers, yet that is what his legislation set out to do when it was published. How nobody in Government saw the blatant anti-elderly bias in the published version of the Bill is astonishing. One would almost believe that forces at work at the highest level of Government set out to make old people's lives more miserable. Of course, this is untrue.

The truth of the matter is that these ill-thought out provisions are the result of an incompetent Government. These mistakes are the results of its own actions. The Government is complacent and mistakes are made. One would wonder what mistakes will be made on serious legislation such as the implementation of the National Asset Management Agency if mistakes like these are made on such a short Bill.

Besides the attack on the elderly, there are other significant problems with this Bill. The inclusion of Bord Fáilte approved self-catering holiday homes is another example of the Government failing to see the bigger picture. Self-catering holidays are the backbone of the Irish tourism industry. These homes are not simply homes, but businesses. Bord Fáilte registered and listed homes already pay charges in the form of registration fees and other annual business charges to local authorities. The Fine Gael Party leader encouraged people to holiday at home in Ireland this year to keep money in the Irish economy. It is a bizarre display of inconsistency that the Green Party Minister for the Environment, Heritage and Local Government, who would be against excessive air travel, is now imposing an additional tax on the indigenous tourism industry. Self-catering homes will have little option but to pass on the cost to their customers, difficult and all as it is to get customers in the current climate.

The Bill is an attempt to address the many problems of local government finance. As such, Fine Gael accepts the principle of putting a charge on second homes, in order to assist local government financing. However, we are opposed to some of the details of the Bill. Many local authorities throughout the country are in significant financial difficulty due to the collapse of the building industry, business rates and development levies. The local authority in my area, Kilkenny County Council, had a €7 million income from development levies in 2008. It budgeted for €3 million in 2009 but the most recent target is €1 million. This is the extent of the difficulties with which local government is faced for the remainder of the year in carrying out much of the planned capital works that require development levy contributions to make them happen.

The Minister for the Environment, Heritage and Local Government's tinkering with the car tax system last year contributed to the almost complete collapse of that industry and the resulting loss of tax for the local authorities. Galway County Council is reportedly losing a €1 million a week. This week, Sligo County Council stated it had no prospect of balancing its budget this year, and I have no doubt the same problems arise in many other local authority areas. Notwithstanding the economic difficulties the country is facing, after two years in office, the policy pursued by the Minister, Deputy Gormley, has contributed to many of the problems that are faced in the financing of local government at present. What will result is a drastically reduced level of service and the elimination of any meaningful impact on the capital programme, particularly for water and waste water services which are urgently needed in the context of meeting our deadlines for the water framework directive in 2015.

What has been the Minister's response to this financial crisis in local government? It is a tax on second homes that was put together without thought and then rushed into the Dáil today. In this time of emergency and crisis, it is not half-hearted measures that will get us through but wholesale reform of local government. The Minister has talked about local government in the context of the Green Paper and he promised we would have a White Paper by the end of 2008. He was not able to take the hard decisions and set out his programme before the local government elections in June of this year. He has talked big but his only real proposal for reform is to have a directly elected mayor of Dublin, on which we do not know the powers or the extent of the remit of the position. He is expecting us to buy and pig in a poke in regard to accepting this proposal without knowing what level of impact and power will apply vis-À-vis the management system in the four local authorities in Dublin and, more importantly, what meaningful impact this position will have on the welfare and well-being of the citizens of Dublin next year.

Any new tax measures for Dublin have been put off until the Commission on Taxation report is published. While I welcome the expected publication of that report in the coming weeks, this new tax to help pay for the failing "business as usual" model is a waste of taxpayers' money. It has been 15 months since the Government published the Green Paper and, although we want to see action on local government reform, we want a comprehensive White Paper published sooner rather than later because we are already seven months behind schedule.

What local government in Ireland, not just Dublin, needs is dramatic reform. Fine Gael has painstakingly set out its local government reform programme whereby we want to bring all of the various agencies in a locality together under the accountable remit of local government. Too many agencies are operating at arm's length from the State in local areas without any proper mandate at local government level. These are the kind of agencies that could make a meaningful impact in creating employment in many of our urban and rural areas if they were at the coalface of interaction, where they should be.

The Minister of State, Deputy Finneran, who was a member of a local authority, will appreciate that over the years there has been a massive centralisation of power in the hands of the Executive and central Government at the expense of local government. I do not agree with this and believe we need a programme of devolution that will give a meaningful role to the local councils. The only way this can be done is to devolve functions and responsibilities, and co-ordinate all of the agencies that are operating from various Departments through the local government system.

This new tax is supposed to raise €40 million but it has no hope of raising that sum in 2009. To begin with, we do not know the extent of the information that is available at local government level and we are relying on the Private Residential Tenancies Board, the Revenue Commissioners and the ESB. The Revenue Commissioners is probably the body best equipped to know what is the registration of each property and it has the necessary powers and remit to be able to get that information. It could then transfer funds to the local government system. I do not accept the local government system will be up and running as quickly as the Minister anticipates in order to collect this amount of money in the current year. Instead of compensating for the €30 million reduction in the funding of the local government that was recently announced, we will make a bad situation worse in terms of the funding deficit at the end of the year. I put forward an amendment which suggests that the Revenue Commissioners should collect this tax in the first instance and until such time as the local government system is able to cope administratively with new taxation.

Fine Gael has published the details of its local government programme and the Minister should take them on board in order to ensure there is a vision for local government. We are often accused by Government of not coming forward with constructive suggestions as to how we could deal with many of the problems in different areas, although we on the Opposition side do this regularly. The document I have given to the Minister for his perusal is another example but the only response is that we are told to await the outcome of another report. It is time for action because the country cannot afford inaction. It is widely expected there will be difficulties in the next budget and that there will be a need for reform in all areas, so why not start now by ensuring we have a meaningful local government structure? We should not delay in issuing the White Paper for local government, including in regard to financing, on which difficult decisions will have to be made.

In the meantime, there are programmes which require serious expenditure, such as the water services programme, on which the Minister has set out his stall and boasted of the extra money he has received in order to make the biggest single investment in water services in the history of the State. Now, however, because of the reduction in development levies at local authority level, we will not be able to start many of the anticipated projects this year. How will we achieve our objectives in regard to meeting the water services framework directive as drawn up by the European Commission by 2015 if there is no serious attempt to make the necessary investments in water and waste water services? If we do not do this, we will have to pay fines to the Commission which, as everybody would agree, is a waste of time.

In principle, I have no difficulty with charging a modest fee for second homes. We believe a service charge is required for provision of second homes in local authority areas. However, as one can see from the research, this will mean different things in terms of funding for different parts of the country. It will be welcome for some areas, particularly Dublin and the west coast, but the midlands will suffer disproportionately due to inactivity on the second home and holiday home front.

It is not appropriate that the self catering businesses which are approved by Fáilte Ireland, many of the them in the Minister of State's, area near the River Shannon, should be included as part of the process of levying the €200. With the best intentions and all the assurances in the world that this €200 charge will remain €200, we all know that once a charge is introduced, it does not always work out that way. At a time when we have many demands on programmes and demands by the Exchequer and the Minister for Finance for additional resources, the €200 could very quickly become €400 or even €500.

The principle has been accepted but the exemptions are important to ensure we do not penalise people who, through no fault of their own, have made investments and are paying tax in other ways and paying contributions through the local government system, including elderly people who live in the same area as their families. How the Minister could not see that this should be included in the exemptions is beyond me. I encountered another case today involving a 90 year old lady who has two family members living in apartments at the rear and the side of her house. Since the property is in her name the house and the two apartments at the side and rear will be liable for the €200 charge. These are unforeseen circumstances with which the Minister of State should be able to deal. The two family members are helping out to ensure the elderly parent can stay in the general vicinity of the family home rather than institutionalised care. These are the anomalies we must address in the legislation and I trust the Minister of State is open enough to deal with the matter as quickly as possible.

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