John Gormley (Dublin South East, Green Party)

I welcome the opportunity of contributing to this debate on the budget as leader of the Green Party and as Minister for the Environment, Heritage and Local Government. As leader of the Green Party I want to take this opportunity to set out my party's position on budget 2010. There is no doubt that this budget is very tough but the Green Party worked hard with our partners in Government to ensure it was fair. I believe that taken in the round people will find that it is fair under the circumstances.

Nobody comes into public life to cut the pay of public sector workers. Nobody comes into public life to reduce welfare payments. However, given the scale of the public pay and welfare spending, there was no other option. This is about our future prosperity and independence. My colleagues in the Green Party are in politics to tell people the truth. We believe that is far more important than chasing short-term popularity. The truth is that there is no easy option to fix our current crisis.

In this budget we have succeeded in protecting pensioners and education services, including reversing cuts from last year as well as providing a stimulus for jobs in the green economy. I have stated on many occasions in the House that we must take on board the harsh lessons of the 1980s, for which the people paid so dearly. It is incumbent on us to learn from what occurred at that time. We must take swift, harsh measures to ensure this recession does not continue for the next decade or more.

I am proud that the tax increases introduced in recent budgets have been extremely progressive in effect. A single person earning €25,000 now pays €500 more in tax and levies than in 2008. However, the additional taxes and levies imposed on those earning €250,000 amount to almost €17,000 or 33 times the contribution of a person on €25,000. I am encouraged by that.

The budget increases the minimum effective rate of tax paid by the rich to 30%, in addition to PRSI, the health levy and the income levy. This will be the minimum paid by high earners, regardless of any reliefs claimed. We have dealt with some of the tax shelters and we must continue our work in this regard. The budget also tackles the issue of tax exiles or, as Deputy Quinn referred to them, tax fugitives. I agree with that description. We will introduce measures which will impose on all Irish nationals and domiciled individuals whose worldwide income exceeds €1 million and whose Irish-located capital is greater than €5 million a requirement to pay, regardless of where they are tax resident, an Irish domicile levy of €200,000 per annum.

The introduction of the carbon levy is a very important step forward for this country in the context of tackling climate change. In the week before Government leaders from across the globe gather in Copenhagen, Ireland is sending out a clear message that it can and will play its part in the battle against climate change. Placing a price on carbon will encourage people to make the switch, be it to lower emission vehicles or improving the energy efficiency of their homes, in order to avoid additional costs. By placing a price on carbon we will also be raising revenue. The latter will be channelled into making our economy and society more energy efficient. Furthermore, by placing a price on carbon we will be encouraging a more competitive economy, reducing our reliance on imported fuels and retaining more money in that economy.

Next year the Government will invest €130 million in insulation for more than 100,000 homes across the country. Some €76 million of this will be ring-fenced for low income families. Fuel allowances for those on social welfare will be increased next autumn by 11% in order to ensure that the levy does not impact upon them. This money will also enable the Government to cut other taxes and promote the economy. Without this extra money we would not be able to provide a PRSI exemption for employers who take people off of the dole queues or to reduce the VAT rate. That is completely in line with recommendations from independent expert groups such as the ESRI and Comhar, the Sustainable Development Council.

This budget is also about offering hope. Over 15,000 jobs have already been created in the green economy since the Green Party entered Government. The budget shows that the stimulus is in the green economy. We will provide the jobs of the future as we fight climate change. In that context, there will be 3,000 jobs per annum for two years in water metering, 5,000 jobs will be sustained and created in the water services investment programme and 6,000 jobs will be sustained and created in home insulation.

I will now comment on some specific aspects of my Department's Estimate. I will concentrate on the principal sectors within the Department's very broad remit. The provision of €508 million for investment in water services infrastructure in 2010 maintains the high level of financial support for this sector. There is no reduction in capital spending here and this reflects the priority the Government attaches to preserving and protecting our water resources as a key element of our environment. Meeting EU standards for drinking water and wastewater treatment is a critical objective and we must continue to invest in new infrastructure that will ensure ongoing support for the economy.

My Department is putting in place a range of measures to ensure that this money will be spent to best effect. Local authorities recently completed comprehensive assessments to determine the key water services projects that should be pursued in their areas during the next three years in order to meet prioritised environmental and economic objectives. These assessments will inform the next water services investment programme - for the period 2010-2012 - which I will be publishing early next year.

The new programme will outline the projects to progress to construction over the next three years and those that will advance through the planning process. While medium to longer term planning on major schemes will continue, there will be a new emphasis on contracts which deliver on infrastructure that is needed during the next two years. In addition, water conservation works will be fully integrated into the new programme to address, where practicable, network leakages in preference to expanding infrastructure provision.

In line with the requirements of the water framework directive, river basin management plans will be completed in the first quarter of 2010. This important work will provide for the first time a complete picture of all of the 4,000 water bodies in the State - their water quality status, the pressures they face and the measures necessary to secure an improvement in quality in accordance with the requirements of the directive. These new management plans will form a key input to the development of the national water services programme and will also identify measures required in other sectors to improve water quality.

There is no doubt that investment in water infrastructure will remain a high priority. The question arises, however, as to how we both assess the real demand for water services and how we fund those services. The Minister for Finance referred to this yesterday. I wish to inform the House that I will be bringing forward proposals, as a matter of priority, for the installation of water meters in households. This will give effect to the commitment in the renewed programme for Government to introduce charging for domestic water use in a way that is fair, significantly reduces waste and is easily applied. Households will be allocated a free basic allowance, with charging only for water use in excess of this allowance.

Metered charges are a common feature in nearly all developed countries and help to provide water users with an understanding of the economic value of what is becoming an increasingly expensive resource. While average water consumption per person in Ireland is difficult to estimate accurately in the absence of metering, our average consumption levels are believed to be higher than in countries where water services are metered. Metering of domestic water use will serve to promote more efficient use of water and will allow consumers the opportunity to reduce usage levels and thereby their costs.

The recently reported results on the levels of unaccounted for water across all local authorities highlights the critical need for enhanced management of our water services. The metering of domestic connections will contribute to greater water conservation by facilitating enhanced network management by local authorities. It will also enable improved leakage detection and reduction in leaks in the local authority water distribution systems and in households' internal pipes. That is why I want a stronger emphasis to be placed on conservation works by local authorities under the new water services investment programme. My Department will now put in place arrangements for the procurement and the installation of meters to commence as soon as possible. We will also be examining the scope to apply smart metering technology in delivering this commitment.

Severe flooding occurred in many parts of the country recently and the damage and distress this has caused has been widespread. I saw the impact on people when I visited various locations. The House will agree that all of the agencies at local level - local authorities, An Garda Síochána, the Health Service Executive, voluntary agencies and the Defence Forces - collaborated very well to limit the effects on individuals whose lives may have been put at risk or who might have been exposed to serious hardship. Local authorities have been using the procedures set out in A Framework for Major Emergency Management, which enables the relevant agencies to initiate and co-ordinate the response to the flooding. We must consider if there are improvements to be made. In that context, I am arranging for a review of the operation of the framework to see if any such improvements are necessary.

Local authorities have incurred exceptional additional and unforeseen costs as a result of their response to the flooding. As a result, I have decided to make some additional financial assistance available to affected authorities this year. My Department is in contact with those authorities and we will be making funding contributions this year. I expect that a sum in excess of €10 million will be available for this purpose. This money will be additional to that announced by the Minister for Finance when introducing the budget. As regards flood impacts on water services infrastructure, my Department has contacted the relevant authorities to ascertain the damage ensuing from the severe flooding, including damage to water services infrastructure.

We may have to examine the need for capital works and we will have regard to this in the new water services programme to be finalised early next year. The Government appreciates the prompt and constructive response to the recent flooding by the local authorities and other agencies. The challenge is to ensure that we take steps to minimise flood risk in future development. We have issued guidelines to local authorities on flood risk management aimed at ensuring a more consistent, rigorous and systematic approach to flood risk identification, assessment and management within the planning system. These guidelines provide that development in areas at risk of flooding, particularly flood plains, should generally be avoided. We will invest extra money in flood protection. These are necessary capital works.

In terms of housing, my Department's capital resources are being scaled back for 2010 but we are overcoming this with innovative restructuring of the social housing investment programme. This restructuring has been under way for more than a year and it involves a progressive shift from acquisition and construction towards more market based delivery mechanisms, foremost among which is the long-term leasing initiative announced by the Minister of State, Deputy Finneran.

While it is fair to say that the shift in emphasis is being accelerated by the current economic and financial climate, it is a shift my Department has been developing for some time on the basis that it is the right approach from a policy perspective. For some time we have been working towards the development of a system of graduated and flexible housing supports to meet the varying needs at the different stages of the life cycle. If we are to achieve this, a homogenous social housing stock, where the response to housing need automatically means a house for life, will not fit the bill. Through expanded roll-out of long-term leasing arrangements, as well as a total Exchequer provision for housing of more than €1.1 billion in current and capital finance - a substantial amount in the circumstances - I anticipate we will deliver 9,000 new social housing units in 2010.

The year 2010 will also see the beginning of a major series of changes to local government. A new mayor of Dublin will be directly elected in 2010. The mayor will bring about tangible beneficial changes across the spectrum of local government activity in Dublin, including for the region's competitiveness and overall economic wellbeing. Local government is an important shaper of the economic environment. Just as better leadership, accountability and decision-making will improve the performance of a business entity, the same dynamics will apply to the governance of the Dublin region. The result will be a stronger economy in Dublin and a positive spill-over effect for the whole country. I will present my legislative proposals in the coming weeks to provide for the election of the mayor.

Beyond Dublin, I will publish the White Paper on local government early in the New Year. The White Paper will complement the changes in Dublin by setting out Government policy on local government across the country. Again, better leadership and improved accountability are fundamental concepts that have informed the policies that will be set out in the White Paper. I look forward to its publication and to implementing the Government's policies.

There are significant financial challenges facing central and local government over the coming years resulting from the downturn in the economic cycle. Our goal must be to ensure that we work together to deal with the current economic challenges and ensure that we are in a good position to take advantage of the opportunities presented by the economy as it recovers during the period ahead. For 2010, however, the local government sector must play its part by curtailing expenditure to the highest priorities in common with the approach of central Government.

While I will continue to support local authorities next year through significant general purpose grants from the local government fund towards the cost of providing day to day services, it must be recognised that the financial pressures we face at the centre will have an impact on the grant allocations I will make to individual authorities. The Government must make savings in its expenditure programmes and the Exchequer contribution to the fund is not immune. Notwithstanding this, I am confident that local authorities will have the necessary resources to continue to provide the essential services for householders and the business community alike.

In light of the current challenging environment for business, I have urged local authorities to continue to exercise the necessary restraint in setting increases in commercial rates and local charges. It is important that every opportunity be given to the business sector to remain competitive as a sound business sector is vital as part of the life blood of local communities. Local authorities have responded positively in 2009 in moderating rate increases on commercial ratepayers and next year will be no less challenging for the business sector. Local authorities will demonstrate the same restraint in 2010.

Local government plays a key role in the social, economic and environmental development of this country. It provides a range of services critical to communities and business at local level and is responsible for an overall spend of some €11 billion. Half of this funding comes from Exchequer sources with the remainder being financed from a variety of local charges including the rates paid by commercial business. Given the difficulties faced by the Exchequer and local businesses as well as the need to minimise charges generally, it is essential that local authorities provide the very best value for money possible and continuing to contribute to economic recovery. To further this efficiency objective, I have decided to establish a special group to undertake a new independent efficiency review of local authorities. The group will examine the cost base of local authorities and advance a new efficiency drive to achieve greater value for money, best use of resources, eliminate inefficiencies and contribute to the national requirement to address the imbalance in the public finances. The group will take account of Government policy on local government reform and measures already in train in the context of the transforming public service agenda. The group will be asked to complete its work by mid-2010.

The group will be chaired by Mr. Pat McLoughlin, who was a member of the special group on public service numbers and expenditure programmes. Mr. McLoughlin is a health sector business consultant with a range of business interests in the sector. Until early 2006 Mr. McLoughlin served as the deputy chief executive of the HSE and national director. Mr. McLoughlin is currently CEO of Irish Payment Services Organisation.

I have acknowledged that this is a tough budget but I insist that, under the circumstances, it is fair. My colleagues in the Green Party and my colleagues in the Department of the Environment, Heritage and Local Government, are determined that we will face the upcoming challenges and we will not try to under state them. We will continue to work for a better and more prosperous, more sustainable Ireland. The harsh actions in this budget will bear fruit. It will bring a signal of hope to our young people that they have a future in Ireland. It will send our EU counterparts and international investors a strong signal that we are open for business. We have important work to do and we will get on with it.

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