Olivia Mitchell (Dublin South, Fine Gael)

I move amendment No. 40:

In page 153, between lines 18 and 19, to insert the following:

104. - The provisions of section 134(15) of the Finance Act 1992 shall be suspended pending a review to be carried out by the Minister on the impact section 134(15) will have on the car rental industry.".

We discussed this amendment briefly on Committee Stage and I hoped the Minister would introduce an amendment to deal with the problems which are being encountered by the car rental industry. It has been hit by a number of challenges in addition to the recession and the difficulty of getting finance. The recently introduced scrappage scheme makes ex-rental cars almost impossible to sell because the resale value has diminished, changes to the VRT and road tax rates have made cars with automatic transmission less economical and the VRT rebate enjoyed by the industry since 1992 has been withdrawn. Interestingly, the latter rebate was introduced to increase the supply of cars to the rental industry. The combination of these factors has fundamentally changed the relationship between finance houses, car dealers and rental companies.

The supply of cars to the industry has decreased dramatically. It was almost impossible to get a car last year largely because of financing but companies face additional tax problems this year. Between 10,000 and 12,000 cars will be available this year, compared to 27,000 two years ago. As an estimated 20,000 cars will be needed, we will at best have one half of the required fleet. This is an urgent matter because if cars are not ordered soon they will not be available for the summer season. Car hire prices are already twice or more those of comparable countries such as Scotland and elsewhere in Europe.

Approximately one third of all visitors to Ireland, and 45% of Americans, hire cars. If cars are not available people will not visit because they will have no way of travelling around the country. The Minister may be aware that Bus Éireann has just announced a further reduction in its bus services. This is an important issue not only for the car rental industry but also the entire tourism sector. People are anxious that something would be done as a matter of urgency.

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