Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I appreciate the opportunity to speak in this debate following yesterday's announcement by the Minister for the Environment, Community and Local Government, Deputy Alan Kelly. I was surprised to hear a Minister who has been doing his job for only a few months refer to his legacy. His ministerial colleagues were smirking when he made that comment because they have been around the House for long enough to know not to speak about their legacy. The fact that a Minister who is four months in the job is thinking about how he will be perceived by future generations said it all.

What was yesterday all about? It was an announcement of a rescue plan for Irish Water and the Government. I acknowledge that it provided certainty and confirmed that people in single households will pay €160 per annum for water. Given that people pay for water through taxation, the charges will amount to double taxation. Households with two or more occupants will pay €260 per annum through this double tax. It would be easy to put to bed the argument that water charges are a form of double taxation. The Government could simply introduce a reduction in tax commensurate with the amount people will pay in water charges. If that were done, one could accept the argument that the water charges do not amount to double taxation. However, the tax burden has not been reduced as a result of the establishment of Irish Water. While the Government reduced the top rate of tax in the budget, the reduction applies only to high income earners - those earning more than €70,000 or thereabouts - and did not affect the majority of people.

In the next few days, many people will decide to grin and bear the measures announced yesterday on the basis that they will receive a rebate. When the dust settles, however, they will begin to ask what all this was about. Yesterday will go down as one of the biggest raids ever on taxpayers' pockets. I hope people will concentrate on this issue from today, although it may be a week before they do so. The Minister stated that taxpayers would have to pay an additional €180 million by way of payments from the Department of Social Protection to people who register with Irish Water. He then announced that taxpayers would have to stump up an additional €60 million in the form of an increased Local Government Fund grant to local authorities to make up for the commercial rates that Irish Water will not be required to pay. Every other public utility pays rates to local authorities. The payments to be made through the Department and the commercial rates relief programme will cost €240 million, all of which will have to be paid for from general taxation. This means there will be triple taxation, because people who pay for their water supply through the general taxation system will have to pay on the double on the basis of the new water charges, and on the treble by virtue of having to subvent Irish Water to the tune of €240 million. People may not yet have cottoned on to this triple tax, but they will do so as soon as they ask how the finances will operate.

Yesterday was all about getting politicians off the hook. While the Government may have had limited success in that regard, people will see through it by tomorrow morning. The biggest farce is the requirement for off-balance-sheet financing. Those following proceedings and those with an interest in the matter will ask what is Irish Water. It is meant to be a commercial utility but, as I stated, it is not behaving like one. People are not given €100 for registering with the ESB or Bord Gáis or for paying the television licence. In addition, the ESB, Bord Gáis, EirGrid and every other public utility or mobile telephone company must pay commercial rates on their commercial activities. Irish Water is either a commercial utility or it is not, and if it is the former, it must pay rates. The measure on rates copperfastens the view that this is not a commercial utility. For this reason, Irish Water will not satisfy the off-balance-sheet financing requirement.

The figures I have provided have not yet been placed on record. I will now provide figures on what taxpayers will invest in Irish Water in this calendar year. The Department of the Environment, Community and Local Government, through the Local Government Fund, will invest €440 million in Irish Water in 2014, while the taxpayer will inject further equity of €240 million. In addition, the National Pensions Reserve Fund, which consists of pension contributions, will invest a further €90 million this year, giving a total investment in Irish Water by taxpayers of €770 million. It is nonsense, therefore, to claim that this is an off-balance-sheet equation. That argument will not stand up. Every figure I have cited has been provided by the Government. The figures for 2015 are included in the recently published Estimates. They show that the Government will provide €540 million through the Local Government Fund to Irish Water for water services. A further €400 million of taxpayers' money will be allocated from the Central Fund by way of equity investment, as opposed to voted expenditure.

The taxpayer is putting another €180 million in through the Department of Social Protection's payment for 1.8 million houses if they register and thus receive their €100 refund. The taxpayer is putting in an additional €60 million through the local government fund as a result of the rate subsidy for Irish Water. Therefore, taxpayers are putting €1.18 billion into Irish Water next year, which is more than it will spend in the entire year. Not only is it off-balance-sheet, but practically everything it does this year and next year is being funded directly by the taxpayer. I do not believe for a minute that this will satisfy the EUROSTAT rules in terms of the market corporation test. Nor do I believe the Irish people can walk away from the massive investment of wasted taxpayers' money - €500 million for meters and €200 million on set-up costs. That wasted €700 million will go down as one of this Government's biggest legacies.

I have written to EUROSTAT seeking confirmation of whether it accepts these indirect subsidies for Irish Water as the substance of what is happening. Do the Minister for Public Expenditure and Reform, Deputy Howlin, and the Minister for the Environment, Community and Local Government, Deputy Kelly, think they can come up with an accounting trick to get around the substance of what is happening? I have also written to the Comptroller and Auditor General asking him to investigate the money wasted on these meters.

Irish Water intends to invest approximately €500 million per annum on water services in 2014, 2015 and 2016. The taxpayer is putting in €770 million this year and Irish Water will spend €500 million on water services, so where is the other €270 million going? It is going to pay for the super-quango of Irish Water. The taxpayer is putting more money into Irish Water than the company is spending on water services. The country would be better off if Irish Water had never existed. If we had put €750 million through the Department of the Environment, Community and Local Government and other sources, it would be going into water services and not hoovered up by a super-quango.

The figures for 2015 are even more startling. Irish Water has an investment plan in the order of €500 million per annum but the Government is putting €1.18 billion into Irish Water next year. Therefore, we are putting €680 million more into Irish Water next year than the company is spending on its capital investment programme. I want to repeat those figures because people will not be aware of them otherwise. Some €540 million is going in through the local government fund, as announced on budget day. Some €400 million is going in by way of an equity injection from the Central Fund, which is taxpayers' money. Some €180 million is going in through the Department of Social Protection by way of a registration fee for those who register and an additional €60 million is going in as rates support because Irish Water will not be paying rates to the local authority, as every other commercial utility does. Therefore, of the €1.18 billion going in from Irish taxpayers, €500 million is paying for water services, so €680 million is being mopped up by the super-quango.

The country's water services would be better off if Irish Water got off the stage and let taxpayers' money be spent on such services. Under the old regime years ago, money used to come from Europe to the Department of Agriculture. The farmers always complained that half of it was soaked up in administration before it got to them. We now have exactly the same situation with Irish Water because more money is being soaked up in running that quango than is being spent on the services it was established to provide. People might want to have a go at the figures I have cited, but I have taken them all either from the Government Estimates or from a recent report presented by the Comptroller and Auditor General to the Committee of Public Accounts. They are published figures from those sources.

I will now move on to some of the other unfortunate aspects of what happened yesterday. As I said, Irish Water should be closed down because it is a drain on the economy and a hindrance to investing money in water services. More would be spent if the company was not there. Some people say that meters will help with water conservation, but the new charges will do exactly the opposite. I recall a lot of people watering their flower beds and washing their cars during the summer. They said that was the last year it would ever happen due to the future cost of metered water. When people pay €60 or €160 for water next year, however, they will say, "We have paid for it and we are going to use it". This will encourage people to use water less carefully than if they had been metered. Since there will be a cap on the bills, they can water their lawns, wash their cars and fill their swimming pools for free. The proposed system will increase water consumption, rather than conserve it. What the Government has done is perverse.

I will now turn to another perverse position from the Government. Both the Taoiseach and the Minister have said that water meters will help to identify leaks. However, meters will only identify leaks between the meter at the front gate and the house; they will not identify leaks in the mains infrastructure. If the Government was serious about dealing with that issue, Irish Water would be putting a significant amount of money into fixing those leaks.

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