Fergus O'Dowd (Louth, Fine Gael)

The household charge is an interim measure and will be replaced by a full valuation-based property tax in due course. However, time is required for that and the household charge was necessary as an immediate measure to meet the troika's timeframe. This was the context in which the legislation was introduced.

In terms of the full property tax, an independently chaired interdepartmental group was established in February to consider the structures and modalities for a full property tax. Recently, the group completed its work and submitted its report to the Minister for the Environment, Community and Local Government. The approach to the report will be considered by the Government in due course.

The Government is concerned by the equity of any charge. For this reason, the household charge was introduced as an interim measure, thereby providing the time to consider a property tax fully and to ensure that the issue of fairness and the implications for personal income levels, employment circumstances and property values are given full consideration. The household charge is also necessary to ensure that local authorities will not need to curtail local service to their communities next year. However, I accept that the charge is an additional cost on households. I do not underestimate the daily financial pressures on families. The charge has been set at the lowest possible level that is consistent with raising the required amount of funding in 2012. Many of the most vulnerable groups are exempted or entitled to a waiver. Provision has also been made for payment by instalment.

The introduction of the €100 household charge on residential property is one of the measures that must be taken, reflecting the support programme, to close the gap between expenditure and revenue. However, it should be seen as more than simply a measure to raise revenue. It is a structural change to the State's revenue-raising system and provides an alternative revenue stream that will not be subject to the volatility associated with transaction-based property taxes. The household charge represents a new local source of funding for local authorities and reduces their dependence on central government.

The Local Government (Household Charge) Act 2011 is crucial, not only to local government financing at present, but to the successful implementation of a future property tax. The change it represents in terms of how we finance local authorities is essential to the future sustainability of local government and the future well-being of our communities. If we care at all about the continuing provision of local services and the shaping of local communities, we must vote against this Bill.

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