Patrick Nulty (Dublin West, Labour)

I accept the assurances given this morning by the Tánaiste that it is his and the Labour Party's intention to retain the new water company that is due to be established in public ownership. However, we must be conscious that after the new company is established, at some point in the future, God forbid, Fianna Fáil might be back in power or Fine Gael might be governing alone and the option of privatising it will still exist.

I commend the Minister of State, Deputy Jan O'Sullivan, on the excellent work she is doing in the area of planning and housing. She is driving a very positive and strong reform agenda.

Wherever water charges have been introduced they have been regressive. That is evident from the statistics provided by the OECD. In England, 3.7% of the incomes of the bottom 10% of the population goes on water charges, whereas for the top 10% it is only 0.4% of their income. The same applies in France, Holland and Mexico. In the 1990s, KPMG assessed the economic rationale for installing water meters and found it to be uneconomic. It will cost approximately €800 million to install water meters. I ask the Government to review that expenditure and consider using that €800 million to invest in water infrastructure. That was done by Dublin City Council over the last few years and leakages have been reduced from 43% in the late 1990s to 28% now. It would also create jobs.

We should shift the balance in our approach to taxation. Unlike the Minister of State, Deputy John Perry, I believe indirect taxation is the most unfair form of taxation. It takes no account of people's incomes. We must move to a progressive taxation system, which means introducing a higher rate of tax for those earning more than €100,000 per annum and introducing the wealth tax which the Minister for Finance, Deputy Michael Noonan, told the House could bring in between €450 million and €500 million per year. There must also be recognition that, unlike what some people suggest, the citizens of Ireland are very responsible. They do not leave taps on left, right and centre.

We should use the funds in the National Pensions Reserve Fund to invest in water infrastructure and, where necessary, progressively increase taxation on incomes to pay for services. There must be a change of policy and direction, and that would be a progressive step. We should not introduce water charges.

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