John McGuinness (Carlow-Kilkenny, Fianna Fail) | Oireachtas source

I move: "That the Bill be now read a Second Time."

We now live in a country in which the Government is at war with its citizens. It continues to reflect on the various problems people face. We talk about them here in the House but there is very little action. Out of austerity has come the need to review all the old certainties of income that the Government would have had. We need to question ourselves as to where that income comes from, particularly when we are talking about businesses and entrepreneurs. In the past, the economy, with its entrepreneurial spirit, created 800,000 jobs, leading on to 1 million if the various sectors are taken into consideration. Apart from the job creation itself, this gives life to local communities and ensures the sustainability of jobs in various towns and villages. There is enjoyment in rural and urban areas that we are progressing together.

However, there is now a serious imbalance in what is going on. On one hand, various rates and taxes are being levied against those in business, while on the other there is the rhetoric that we are supportive of business. In fact, small businesses, particularly family businesses, get very little support from Government. Fine Gael in government does not recognise the enormous layers of bureaucracy placed on the shoulders of those families and individuals who are entrepreneurs and who are keeping local villages and towns alive.

In opposition, Fine Gael raised the issues of upward-only rent reviews and the burden of rates. Yet in government there is a reluctance to do anything. The Minister of State should not tell me that it is impossible to deal with upward-only rent reviews through legislation. It is of course possible. The Quinn legislation should be built upon. It should be enhanced and enforced and we should give breathing space to those caught in that cycle of upward-only rents.

In a similar way, the Government needs to examine the rates structure. It needs to examine why 28% of a local authority's income comes from rates. I believe €1.4 billion in rates is collected and spent every year. We need to ask how well that money is being spent. What value do local communities get for that money? Is there real value for money or is this just another way of collecting taxes? I suggest that it is another way of collecting taxes from the very same tax base that is paying significant amounts in terms of enterprise and employment, which is not as it should be. The future in this country depends on entrepreneurs and those in local communities creating sustainable jobs.

The Minister of State will know that the single big issue raised in our clinics is as follows. Having adjusted every other cost within their businesses, the one single cost business owners cannot reduce is the local authority rate. There are many anomalies in the current rates system, for which there 15 different statutes. There is an ad hocarrangement throughout the country as to how local authorities are dealing with rates. There is a 75% rate of collection for local authority rates, which indicates the growing number of businesspeople who cannot simply afford the rates being imposed on their properties. It is shocking to think that the Government refused to acknowledge or understand that in starting a business, when one is watching one's costs, the only single cost one cannot touch is a Government cost, that of rates. The Government has shown no sympathy or understanding to those who are starting a business or already in a business when it comes to rates.

I am suggesting a different approach - a value-for-money approach. I challenge the Government to prove to me that the €1.4 billion collected in rates, representing 28% of local authorities' income, is being used effectively and efficiently. I ask the Minister of State to give me the rationale behind imposing a rate on a business without any consideration of the ability of that business to pay. There is no rationale. The Government simply forces the issue with it and insists on payment. It gets the officers to call to the premises to bring pressure to bear on those who are already under pressure because of taxes and everything else. It makes it known in the local community that the business can pay. What is going on is appalling. The Government has no real intention of reforming the system.

The owners of local shops and pubs that have closed down will say that the imposition of rates and the continuing increase in those rates, even though they have been held at one level in recent years, is having a detrimental effect on their businesses. If we are really serious about business, this is one simple action we could take to show the entrepreneurs and businesspeople that we are serious about understanding their problems.

For some reason, the reluctance on the part of the Government in this matter persists.

Let us consider the position of those who own crèches - I am not even going to mention publicans, those who run small shops, etc. - and who provide care for children in order to allow both parents to go to work. They will inform the Minister of State that they cannot afford to pay rates. The services these facilities offer mean that, in effect, they are almost educational establishments. If they are educational establishments, they should not be obliged to pay rates. Why is it not possible for the Government to single out certain sectors and ensure those involved in them will either not be liable for rates or will have them reduced? Why can those in government not understand the closure of banks and post offices and other entities which provide Government services in local communities not only has an impact on those communities but also reduces the footfall and makes it impossible for businesses to perform? If the Minister of State walks up and down high streets throughout the country, he will see shops closed. If he considers the rates bills paid by businesses, he will discover that there is a major issue in respect of the subsequent occupier clause, which clause must be removed. If he examines the position of sports clubs which are obliged to pay rates on their entire properties, he will understand this issue must be dealt with. However, the Government is not prepared to put in place the legislation necessary to resolve the matter.

Emergency legislation has been introduced in the House on many issues. In the context of those entrepreneurs who are doing very well and whose businesses are performing in the export market, however, we are not taking action. If one speaks to representatives of Chambers of Commerce Ireland, the Small Firms Association and many of the other relevant bodies and groups, one will discover that their priority is to have a reconsideration of the rates structure. Then there are the businesses which are anxious to develop, expand and create employment. After such businesses pay various local charges, including those for planning applications and so on, all of which are taxes, they are then faced with the prospect of their properties being revalued. When such revaluations are carried out, the owners of the businesses in question end up paying significantly higher rates just because they are entrepreneurs who wanted to take a risk and create jobs and who wanted to obtain loans in order to ensure their operations might become profitable. The one matter over which they have no control and which impedes both their decision making and their ability to progress is that of local authority rates.

The Minister of State may be of the opinion that this is a small burden for businesses to carry. In that context, he should ask pub owners who no longer have the incomes they used to have how they are faring in paying their rates. Is it not incumbent on the Government to examine the books and level turnover of such businesses and state - taking into account the position on the economy in general - that it realises they simply do not have the money to pay? The Government will not introduce the legislation which would enable this to happen. I return to the argument about crèches and the fact that the subsequent occupier clause has remained in place for years. Both arguments are essentially the same.

There is then the position on the Valuation Office, representatives of which have informed the Committee of Public Accounts that it simply does not possess the resources necessary to revalue properties throughout the country in a speedy and efficient manner. As a result, only pockets of properties have been revalued. There are no winners in the revaluation process because the same amount overall must still be paid in rates. Those who lose out are the ones who previously paid reasonable amounts but who have been obliged to pay increased rates. There may be businesses which enjoy a slight reduction, but the overall take will remain the same. That should not be the case. This matter must be about value for money, efficiency and an acknowledgement that the people to whom I refer are making a contribution to the overall economy., but the Government does not recognise that contribution. The Taoiseach continually says this is the best small country in the world in which to do business.

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