Enda Kenny (Mayo, Fine Gael) | Oireachtas source

The ability of local authorities to borrow for investment was severely restricted and investment decisions have been slow, bureaucratic and uncoordinated. Every Deputy in the House knows that. Why should we continue with this? Would we try to plan and run our electricity and rail networks on a county basis? It seems that is what the Opposition wants.

Our population is increasing, our economy is now the fastest growing in the euro zone and our climate is changing. We have to change Ireland's public water supply system to meet these new and growing demands. There is no good time to take decisions that have a financial implication for households, least of all as we are emerging from one of the worst recessions this country has endured. The last recession was caused by economic mismanagement and by choosing the politically expedient over the difficult reform. As Taoiseach and head of Government, we have to take decisions in the long term interest of our country.

By 2030, the world is expected to have 40% more water demand than supply, which will be a critical problem for many countries. According to the World Economic Forum, water crises are already the third global risk about which countries are most concerned. We have a responsibility to ensure that Ireland is not a victim of water deficit, by investing sustainably in our water system after decades of under-investment so that it is resilient enough to face the new demands. In today's announcement the Government is bringing clarity, certainty and predictability to the pricing regime that will apply to domestic water services.

We have listened carefully to the concerns of families and vulnerable people all over the country. I commend those who have done this in a peaceful and respectful manner. Their voices have been heard and listened to. Today we have outlined a comprehensive package that will provide long-term certainty for everyone. Single adult households will have a capped charge of €160, which will amount to an effective charge of €60 after registering with Irish Water to receive an annual water conversation grant of €100 from the Government. That is a cap of €1.25 per week. All other households will have a capped charge of €260, which will also amount to an effective charge of €160 once the annual water conversation grant is also taken into consideration. That is a cap of €3 per week.

It is important to note that this is a capped charge, not a flat charge. Water conservation is still central to this package of reform. There are real incentives for households to manage their water use. All households with a meter can still use their water carefully in order to reduce their bills even further. If metered households can reduce their water consumption by between 10% and 15%, then approximately half of Irish households will be able to beat the cap and have bills lower than the capped amounts set out. Even households without a meter today still have an incentive. If their metered use in the future shows less use than the capped charge they will be entitled to a rebate. Meters are also an essential tool in detecting leaks on the customer side. This represents 10% of the overall leaks nationwide. The first free fix scheme that will be rolled out by Irish Water will address these wasteful leaks. This will save money through treated water not being lost.

The capped charges will be in place until 2019. The volumetric charge of €3.70 per 1,000 litres remains low by European standards. Some parts of Britain pay as high as €6.63. People do not know what the price of gas or electricity will be in three years' time, but what they do know from today is the maximum bill for water for the next four years. People will rightfully ask what happens from 2019 onwards. This Government is determined that water charges will always remain affordable. That is why the Minister will legislate so that domestic charges from 2019 onwards can continue to be subject to caps and allowances set by the Minister for the Environment, Community and Local Government. That is to ensure that water will be always affordable for families.

There will be no change in charges until the metering programme is near completion and the public is confident that its contributions are being used widely by Irish Water to address the many defects in our network, and for those purposes only. Average charges will also continue to be kept low through reductions in operating costs by Irish Water. The regulator has instructed that there be a 7% reduction in operational costs to be delivered each year between now and the end of 2016, and €1 billion in revenue efficiencies by 2021. Irish Water will come forward in early 2015 with a plan in respect of those operating costs to significantly reduce headcount up to the end of 2018 by steadily eliminating the inefficiencies inherent in the current fragmented water system.

I understand the daily challenges being faced by low and middle income households across the country to make ends meet. This Government is determined that the economic recovery now underway is felt right across the country and in every household. That is why I can confirm today that this is the last new national charge to be introduced by this Government. I can also confirm that the combined budgetary measures, such as tax cuts, improvements in child benefit and the water conservation grant, will more than off-set water charges for every household in the country with somebody in full-time work.

As a result of the tax cuts announced in the budget by the Minister, Deputy Noonan, a single worker on the average wage of €35,000 will get tax cuts of €400 in 2015, almost seven times the net water bill of €60. A married couple with two children, earning €55,000 and €50,000, respectively, will be more than €1,040 better off next year after paying the maximum net water charge of €160. A single person on the minimum wage will get a tax cut of €173, almost three times the maximum net water charge for a single adult household. This is only the first instalment of a plan to progressively reduce the tax rate on low and average earners, because we can now afford to do so. I confirmed during my budget speech that the intention of the Government is for the tax rate on middle income families to be lowered further in budget 2016 to, at most, 50%. This is all possible because Ireland is now in recovery.

We have moved from a situation in 2011 where the very future of the economy was in doubt to one where we now are the fastest growing economy in Europe. We have created 70,000 new jobs since we launched our action plan for jobs and are on course to exceed our 100,000 new jobs target next year. An unemployment rate of 11% is unacceptable and that it why we must push on with our reforms to help create more jobs and investment. The Government is also hitting its deficit reduction targets, a prerequisite for jobs and investment.

I have not heard one constructive suggestion from anyone on the Opposition benches except the term "abolition." The alternative being offered by Opposition parties is to undo the progress we have made, increase taxes on income and employment and retain a broken and wasteful water system. They want less work and less investment, and more waste.

They thrive on fear and misinformation. They only offer protest, slogans and dead ends; they are not offering solutions to the complex problems facing society and the economy.

See this speech in context