Dáil debates

Friday, 21 November 2014

Local Government (Rates and Miscellaneous Provisions) Bill 2014: Second Stage [Private Members]

 

12:30 pm

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

Yes. I welcome the opportunity to speak on this rates Bill in substitution for my colleague. I am sharing my time with Deputy McConalogue who will speak subsequently and there will be no disruption to the next speaker.

I thank my colleague, Deputy McGuinness, from Kilkenny who is very familiar with the issues affecting small businesses and fully understands all the issues affecting their viability. He has given long, detailed and careful consideration to this Private Members' Bill entitled the Local Government (Rates and Miscellaneous Provisions) Bill 2014, that he has published, for which I thank him. There are outstanding excellent ideas in this Bill and the Government would be well advised to take on board what he is saying.

I had intended to speak about the contents of the Bill specifically in the first instance but I was so shocked by the Minister of State's opening statement that I must address that first. His reply demonstrates that his Department is living in a parallel universe separate from the rest of the Government, of which he is supposed to be a part. He said the Government is opposing the Bill on a number of grounds. He stated in the second paragraph of his reply that Deputies will appreciate that:

the rates income constitutes a very important contribution to the cost of services provided by local authorities such as road maintenance, public lighting, development control, parks and open spaces and libraries. In fact, commercial rates income represented ... 33% of the €1.5 billion to the sector in 2012.
What happened this week to that valuable rates resource? As part of the Government's package to rescue Irish Water and save face, it announced here two days ago that the largest utility in Ireland will be exempt from commercial rates. Has the Minister of State got that point? The Government is exempting the largest super-quango in Ireland from commercial rates that everybody, including Irish Water, the regulator and the Minister, knew Irish Water was obliged to pay.

The bill for the rates is €66 million but the Minister has written off at the stroke of a pen the commercial rates bill Irish Water was to pay local authorities. The sum of €66 million out of the €1.5 billion to which I just referred, represents 4% of the income local authorities were expecting to receive from commercial rates next year. One could ask what the Government has done. It has said the bill will be written off for Irish Water but the Irish taxpayer will pick up the bill. The Irish taxpayer has now been handed the bill, a direct subsidy for Irish Water, and is now going to pay the additional €66 million to local authorities through the increased local government fund, in lieu of the rates that are being written off for Irish Water. That will not stand up to the EUROSTAT test. It is a direct operational subsidy. That is typical of what is going on with the Government. It is looking after the super-quangos, the big people and the State monopolies but it has no regard for ordinary people, small businesses and those who are trying to keep employment in the country. Once again, the actions this week in terms of rates for Irish Water run counter to the attitude being shown today.

I wish to refer to the contribution of the Minister of State, Deputy Paudie Coffey. I genuinely feel sorry for him having to read out the guff someone wrote for him because whoever wrote it did not tune in to what was happening in Parliament in the past 48 hours. He said the approach to providing joint liability in this case is unworkable. However, let us look at what the Government did this week. The Government said the occupier will pay the bill for water but it went on to say that in the case of a rented property a charge would be put on the property owner if the occupier does not pay. That is the ultimate in joint liability in terms of the occupier and the landlord. The Government has no problem having joint liability for water bills but it says it is unworkable in another context. Does the Minister of State have any idea of what the Government has been doing in the past 48 hours? Whoever wrote the script could not have made such a statement if he or she was tuned in to what the Government said.

The Minister of State then said Deputy McGuinness’s proposal to exempt occupiers of rateable property who commence in commercial activity for the first time from 25% of rates in their first year of operation was unworkable. One could ask whether he has any idea of what happens in the real world. The people who wrote the script clearly do not. In the town of Portlaoise, in an effort to regenerate the main street, Laois County Council introduced a scheme whereby occupiers of buildings that commence commercial activity where a building has been vacant for more than one year will get a reduction of not 25% but 75%. The local authority will take 25% because it is 25% more than it is getting at the moment. It said that in year two, a 50% reduction will be provided and a 25% reduction will be available in year three. That is an outstanding initiative by Laois County Council. The scheme should be repeated in every small town in County Laois – Portarlington, Mountmellick, Stradbally, Mountrath, Abbeyleix, Rathdowney and Graiguecullen. It should be repeated in every town in the country. The scheme is workable and local authorities are doing it. They are giving a discount. Shame on a Department that would have a Minister come to the House and say a 25% reduction is unworkable.

The Department is out of touch with what is happening in the country and with the local authorities under its own remit. One could ask how such a thing could be outlined in a script. It is outrageous. I apologise for having to point out the discrepancy but I have never seen such a thing. Perhaps it is a reflection on the Friday sittings; that one can give out any old guff in a script on a Friday afternoon that bears no relation to what happened in the House on Tuesday, Wednesday or Thursday. Everything to which I referred in the script in terms of dealing with rates and local authorities is in absolute direct contradiction to everything the Government has done. It has exempted Irish Water from rates but it will not give a little help to a small business. It was said that it could not contemplate an initiative to reduce rates for a new business but it is being done by Laois County Council. Does the Department not know what is happening in the real world?

The Minister of State said it is not possible to have joint liability for rates but that is happening in the case of Irish Water. The occupier is liable but a charge will also be put on the property owner. That is the ultimate in joint liability. Does the Minister of State have any idea of what is happening? When he responds to the debate he should have the dignity to apologise for what he read out and withdraw his script. What Deputy McGuinness said is the only bit of commonsense we heard in the House.

I accept I have only two minutes remaining but I had to deal with the nonsense in the Government’s script before I got as far as the Bill. I am aware the Minister of State, Deputy Simon Harris, made some changes to the Valuation (Amendment) Bill in the Seanad yesterday, which will come back to the Dáil. We will support the good aspects of the Bill, but we will not accept anything that does not help small businesses.

I wish to refer further to matters that should be addressed under the rates valuation system. Reference was made to sporting organisations but again there is a sting in the tail in the final paragraph. The reference is to where a building or part of a building is used for a commercial sport, but which is not used for the sale or consumption of alcohol or in the generation of income, apart from club membership fees. Everyone agreed that if there is a pub in a sporting facility it should pay rates, but that rates should not be paid on the rest of the property. However, there is a rider to the effect that if the rest of the property generates any income other than membership fees it will not be exempt. That is not good enough and we will vote against it when the Bill comes to the Dáil because, for example, if a hall is rented out to a local badminton club or for another purpose it would be considered to be generating income other than membership fees and therefore rates would be charged.

The Minister of State, Deputy Harris, agreed to make an exemption for the payment of rates by community child care facilities. There are 87 child care facilities in County Laois, the majority of which are privately run and provide the same service as the community child care facilities and they must be listed in the schedule to the Bill as exempt from rates in line with the community child care facilities because otherwise they will not operate on an equal playing field. The issue must be addressed.

A self-assessment situation must be developed similar to that for income tax with proper penalties. There has been talk of revamping the Valuation Office. It will take it two decades to get around the country. We must have action now, not in 20 years’ time.

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