Olivia Mitchell (Dublin South, Fine Gael)

I wish to share time with Deputies Breen, Shatter and either Creighton or D'Arcy. I support the concept of local charges. I was one of the self-destructive politicians that defended water charges when they were introduced in the 1990s. It is reasonable if I have a holiday home and I am supplied with services that I should be asked to pay for them. I also understand there is a gaping hole in the national finances and that it must be filled somehow.

However, as the Taoiseach has stated many times, as well as the need to stabilise the nation's finances we must also try to sustain employment and return to economic growth. My objection to the Bill stems from the proposal not only to tax those who do not pay charges but to tax those who already pay charges. In other words, it is a stealth tax on businesses and as such it is completely contrary to Government objectives. I do not wish to see any business taxed but as the Fine Gael spokesperson for tourism matters I especially do not wish to see a further burden put on the sector. As I have stated numerous times it is already subject to a crisis that no one imagined was possible. It has already lost 50,000 jobs and the promised bounce from Irish people staying at home has not materialised. People are doing exactly that, they are staying at home. They are not staying in hotels, holiday homes, or bed and breakfast accommodation.

The lead Minister for this legislation should be in the House as should the Minister for Arts, Sport and Tourism, whose job it is to champion the industry. He has been silent, sleepwalking through a disaster which is haemorrhaging jobs and closing down the tourism infrastructure. That infrastructure was painstakingly built up over many years and was aided by a significant contribution from the taxpayer.

The Minister for Arts, Sport and Tourism is either incompetent or negligent to allow yet another tax to be applied to the industry, which is collapsing without a murmur. Now that I reflect on the matter, he is probably both. I expect he will defend this tax as he has already defended the airport departure tax, which was probably one of the most incomprehensibly stupid taxes of which I have ever heard and which has been completely counterproductive. The result of the tax, apart from everything else that has taken place in the industry, is plain for all to see.

Yesterday, I met some hoteliers from Cork and from the Ceann Comhairle's constituency of Kerry South. Deputy Clune accompanied me. They told a sorry tale of 35% occupancy for major hotels. Up to three-quarters of all hotels are operating on winter season overdrafts in the middle of the high season when revenues should be pouring in. Some 40% of all hotels have been unable to play last year's rates bill. The jobs of these businesses and all the local spin-off jobs supported by tourism will be gone before the end of the years unless the Government wakes up, does something about it and tries to salvage something from what remains of this tourism season. We are already in the middle of July.

Not content with what has taken place in the hotel industry, the Government now seems determined to wipe out the self-catering holiday sector. It has displayed a complete lack of joined-up thinking because the very homes they seek to tax were, in many cases, tax incentivised in recent years or received grants at the taxpayer's expense. Although he is not present, I plead with the Minister - he may be listening somewhere - to exempt registered and listed self-catering holiday cottages from the legislation. These businesses are located almost exclusively in rural Ireland in areas where they provide the only jobs, or if not the only jobs then the support and other spin-off jobs in areas dependent on tourism and farming. For many operators, it is their only business and their livelihood, or it may supplement farm income. Whichever is the case these businesses are vital to the social and economic fabric of rural Ireland.

The sector has reported a drop in business of at least 30% this summer. It is only holding at this level because those in the sector have slashed prices. In some cases, prices have been reduced by 50% and they simply cannot afford to pass on any more charges. They already pay local charges. One operator contacted me yesterday and outlined to me that he already pays €639 per property in a variety of local charges. In addition he pays €200 per property to Fáilte Ireland to register his property and to ensure standards are maintained. He may or may not get referrals from Fáilte Ireland. A further €200 has been requested from the same Minister for a BER, building energy rating, certificate. This does not include VAT, income tax and corporation tax which must be paid to the Exchequer, quite apart from local charges.

As in the case of many of his colleagues in the same business, the operator who approached me is on a knife edge for survival. It makes no sense to push such people over the edge with a tax that will, in the long run, reduce income to the Exchequer. This tax will be the final straw for many businesses that are only barely hanging on. The season has shrunk immeasurably. Some ten or 15 years ago the season was long but now people go abroad in the winter, the season lasts only 14 weeks. The income for those working in the industry has been halved.

I do not exaggerate and I cannot over-emphasise the heartbreaking calls and e-mails to my office in recent weeks from those in the industry, upon whom it is only now beginning to dawn that the promise of salvation and of an upturn in tourist numbers during the summer will not materialise. Many face ruination. It is not simply a question of these rental properties closing down. There is also the matter of the debt attached to these properties. In many cases, operators were scarcely able to pay the interest on these but now nothing will be paid.

The banks are currently exposed to the tourism industry to the extent of €11.5 billion. Under the NAMA proposals the taxpayer would take on that debt. What is the point in putting them out of business by imposing a further tax now? The Government has far more to lose than it has to gain by introducing the tax. I understand that only €2 million would be foregone if the Minister exempted the tax from Fáilte Ireland-registered and listed properties. They already pay €200 to Fáilte Ireland. The proposal is a great incentive for businesses currently registered with Fáilte Ireland to leave the register and enter the black market which would result in further income lost to the Exchequer. I call on the Minister of State, Deputy Brady, to explain to the Minister that this will wipe out an important part of the tourism industry. It is vital he understands the damage this charge will bring about.

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