Brendan Griffin (Kerry South, Fine Gael) | Oireachtas source

I welcome the opportunity to speak on this Bill and commend Deputy Cowen on bringing it forward. Its sentiments are very positive. We need to reward volunteerism and community involvement and should not put anything in the way of that activity. We need to tackle anything that would stand in the way of volunteerism and the work of community groups. If it cannot be done through this Bill, Government needs to make it a priority to try to find a way to get around the problems that exist. If all sides of the House could work together on it, that would be a positive step.

Since 2011 I have been calling for reform of rates valuations. The system of commercial rates calculation is archaic and needs to be updated. The idea of basing rates for a business on the rental value of a property stands in the way of enterprise and is a barrier to entrepreneurship. A business might need a large floor area, for example, where someone is fixing bicycles, and may pay a couple of thousand euro in rates per annum, even though it has small margins. Upstairs, however, there might be an IT company in a small office, which makes profits of more than €1 million per annum but pays a fraction of the commercial rate paid by the bicycle repair shop. We should consider profitability as distinct from turnover. Some people think rates should be paid on turnover but there is a huge difference between turnover and profitability. Many businesses have large turnovers but small margins. If that was changed, those who could afford to pay more would pay more. There would have to be a cap on the commercial rates a business would pay but that would be a fairer way to do business.

In recent years town centres have come under pressure and some are dying. Many commercial units in town centres are lying empty. A person considering starting a business would see that commercial rates would have to be paid no matter how the business performed. That could be the difference between breaking even and making a loss or between being able to survive or not. In most local authorities there is no flexibility, particularly if it involves an element of displacement. This contributes to the death of many town centres where units remain empty. We need to embrace and implement pro-enterprise policies that encourage people to start up and remain in business. There should be fairness at the heart of the system of commercial rate valuation, which is not there now.

I do not think the current system is something we should continue. We need to find a replacement system that is based on profitability. We should be cognisant of the requirement not to undermine the income base. I think a formula can be struck if the proper research and homework is done. I commend Deputy Cowen on this legislation. Surely a common-sense solution can be found in this area. If we do some research and tweak the Bill a little, we can make a meaningful difference to the clubs in every constituency that are affected by this problem. The Government needs to address this issue seriously to give these clubs the small bit of help they are looking for.

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