Róisín Shortall (Dublin North West, Independent) | Oireachtas source

I support those who oppose section 3 because it is the key section of the legislation. It provides for the charging for water. I oppose this section because I am of the view that the game is up for water charges. The bottom line is that the public simply does not accept water charges. If the Minister has ever doubted that, he need only recall the hundreds of thousands of people who took to the streets, not only yesterday but on each of the other occasions. People mobilised and came out onto the streets to say to the Government that enough is enough. Regrettably, the Minister has continued to ignore the views being expressed to him. He is doing so at his peril because enormous damage has been caused to both parties in government by their insisting on going ahead with the charges.

There is no public support for the charges, for several reasons. Many oppose water charges in principle but there is a very large number who simply cannot afford to pay them. That might be difficult for Ministers to understand but the fact is that there are some 1 million people in this country who have incomes of €25,000 or less. Yesterday, the Minister for Health, Deputy Varadkar, seemed to have difficulty understanding how some people might not have €3 left at the end of the week. How much does he believe he would have left over at the end of the week if he were trying to live on €25,000 or less per year? There is a need for a reality check in terms of where people are at. A large number of people are in very difficult circumstances and their basic income is very low. This does not take into consideration those who have incomes in excess of €25,000 but who have major debt problems. That is the lot of so many people in the country; they cannot take any more.

Others oppose the charges because they are sick and tired of the cronyism that has existed and which the Government promised it would end. It has not done that. We have seen a continuation of that culture of cronyism in the setting up of Irish Water.

Another group of people opposes the charges because they are so angry about the incompetence the Government has displayed from start to finish in respect of the entire Irish Water shambles. It is an utter shambles in terms of public administration and the ability to go about setting up a new public body that actually functions. It is a complete shambles and many people are sick and tired of the incompetence that has been demonstrated by the Government in this regard.

Most people are sick to the teeth of additional charges at a time when their income is being cut. Over recent years, the cost of running the country, including the cost of repaying bondholders, has been shifted disproportionately onto the shoulders of those who can least afford it. It started after the election in that the Government did a complete volte-faceand decided to pay back the bondholders in full. We are paying an enormous price for that, and future generations will continue to pay that price. However, in the actions the Government has taken since paying back the bondholders, all the changes it has made in terms of additional charges and cuts to secondary benefits and pay have affected disproportionately those people who could least afford it.

We have moved from a situation where many services had been paid for out of the general taxation system, which up until recently has been reasonably progressive, to one where those charges have been shifted onto the shoulders of people without any regard for a person's ability to pay. We have a raft of new regressive charges that the people are expected to pay irrespective of their circumstances. That principle, which the Government has been following in recent years, in terms of everybody having to pay the same irrespective of their circumstances, is continuing with the revised charges that the Minister announced in recent weeks. There was a pensioner on to me in recent days who was aggrieved that, whatever about the previous charging system that the Minister spoke about, this latest charging system is most unfair to those in the circumstances, for example, of a pensioner couple on a low fixed income. Such a pensioner couple will be charged exactly the same as, for example, a company director with an income of €500,000 a year with four grown-up children living in the family home where considerable quantities of water are being used, and there is no recognition of that whatsoever. The original argument in favour of water charges was principally one of conservation. That has now gone out the window. There is no element of conservation in this at all. Shortly, we will talk about the so-called conservation grant and all of the problems associated with that, but this charge continues the trend of the Government in terms of imposing equal charges on people irrespective of their ability to pay or otherwise, and it is a regressive charge. The Government is responsible for introducing a raft of regressive charges and, indeed, making the taxation system less progressive than it was previously. That is not what I would have expected from the Labour Party.

The Minister cannot continue to ignore the will of the people. It seems as though Deputy Kelly is determined to do that, but he will pay a significant price if he insists on going ahead with it. It is time the Government realised that there is no public support whatsoever for these charges. Of course, the public realises that, irrespective of the level of these charges, no doubt they are only the thin end of the wedge. Whatever the charges introduced, they are the thin end of the wedge and they can only go in one direction.

In respect of the Minister's announcement, the back-pedalling, as other Members have referred to it, in which he engaged two weeks ago and the new charging regime that he has announced does not add up and does not stand up to any kind of scrutiny. The Government talks about the need to keep the borrowing off the balance sheet. There are a whole lot of elements contained in these proposals which will result in a situation where we will not have Irish Water operating off the balance sheet. The Minister talks about the ability to issue bonds and to raise loans. It is being talked about in terms of this being a way of raising funding in order that the public does not have to pay for it but, of course, all of those loans must be repaid. The only one who will repay those loans is the public. The public must, sooner or later, repay those loans. People are not stupid. They understand that now more than ever, given what has happened over recent years. In terms of the model the Minister is talking about where significant investment will be made in Irish Water, the point has already been made that we will end up in a situation where the bondholders of Irish Water will dictate terms. That is inevitable and the next step is privatisation, irrespective of any commitments in terms of the future ownership of Irish Water.

One would also have to ask how any investor can have confidence in this model when the funding model for Irish Water keeps changing. Nobody has seen the detailed figures in light of the revised charging regime. I seriously suspect that it does not add up. As we have not had those figures in the public domain and given the significant question marks that hand over that entity, how can the Minister expect investors to have any confidence and to put money into Irish Water? Why would any investor invest in that company when there is such uncertainty about user fees and whether they will be collected? The Minister has gone out of his way in recent weeks to suggest that they will not be collected next year anyway and it will be late in 2016 before any action is likely to be taken. What are the implications of that message from the Minister for potential investors in the company when we could be in a situation where the projected revenue from fees will be drastically reduced? What are the implications of that for the Minister's off-balance sheet model? One would also have to ask why any investor would consider investing in this company when there has been such an extraordinary level of incompetence shown by both the Government and senior management in Irish Water to date. There is a significant problem with lack of leadership in that company and a serious lack of competence.

The penalties the Minister announced in the past couple of weeks will not kick-in for a year and three months after the charges are meant to be paid. That brings us to at least April 2016. I heard on the radio Deputy Kelly stretching that out further stating it would be after April 2015 that the 15 month period would kick in, and he suggested that would bring us to August 2016. Given that, the back-pedalling that has gone on, and the strong messages going out that nobody will be taken to court and no action will be taken, one must ask in terms of the viability of this entity why anybody would pay water charges next year. There are no penalties that come into play next year. The Minister himself has said no penalties will apply until the last quarter of 2016. If that is the case, what are the implications for the revenue of Irish Water?

I would further put it to the Minister in terms of questioning the entire financial viability of what he proposes that if it is the case, as he suggested when he made the announcement of the backing down or back-pedalling, that 50% of people will be able to get a rebate, this in turn will have significant implications for the revenue of Irish Water, and it also raises questions about the user data that are being used. In addition, it is proposed to collect data to assess the new charging regime in 2018. Given the paucity of any solid data that would support the contention that this will be a viable company, we are told that we must wait and see whether it passes the market corporation test. All of the indications from the utterances of Government, particularly the Minister, are that it will not pass the market test, but we have no indication of what plan B will be. What happens if we reach a situation where we realise that the data are not reliable, the charging regime does not operate in any kind of effective way and people have no incentive to pay their charges next year?

What happens when the market corporation test fails? What is plan B?

For the past six months the Minister, and the Taoiseach in particular, in an effort to keep all of this at arm’s length have been saying repeatedly that the charging regime has nothing to do with the Government; that it is set by the Commission for Energy Regulation, CER. Now the CER is no longer relevant to the pricing regulation. It does not have a role in it because politics has kicked in and the political system is now setting the price. The situation is an utter shambles. This is nothing other than a strategy to get the Government through to the other side of the next election. Everybody sees through the ploy. We know that the chickens will come home to roost for the Government parties in the next general election, but more importantly, we know that in terms of the cost of funding Irish Water, the chickens will come home in a very serious way for the public who will be stuck with a hefty bill.

One must ask whether the Government is trying to make the situation unworkable. This is all supposedly being done for the sake of €90 million a year. The politics of that are ridiculous. The Government gave away €1 billion in the recent budget, much of it in tax breaks for the better off. That was not very clever politically if all the Government is getting out of the entire Irish Water debacle is €90 million and all of the grief involved. Of course, that is not the case. We are talking about a maximum of €90 million this side of a general election and then having kicked the can down the road, all of that will mount up for the public after the next election.

The Government has utterly failed in this regard. The public do not accept what it is doing. There is no element of fairness involved. Neither is there any element of the reform the Government once talked about. We continue to have a bonus culture in the new quango and the board has been stuffed. There was a political pay-off to Phil Hogan. More and more people are asking how the person responsible for creating the mess has been rewarded by the Taoiseach and has gone off into the sunset with a plum job at European level. Apart from the question of the lack of fairness and lack of reform the situation gives rise to a significant question about the incompetence of the Government.

The legislation is largely undoing the previous legislation that was brought before the Houses, passed and was signed into law by the President. That again underlines the incompetence of what is happening. The Government introduced a regulatory system based on previous legislation and now it must be undone. People have lost trust in the Government. There is every reason for that – broken promises, the Government saying one thing and doing another, and being really disappointing and letting people down. That is why nobody believes what the Government is saying. Everybody knows this is merely a strategy to get the Government through a difficult political period and past the next election. The Government is kicking the can down the road. Everyone knows that is a serious mistake.

If the Minister had any sense or courage he would have recognised the serious mistakes that have been made and he would have scrapped this hare-brained shambles of a plan. Unfortunately, the Minister has not done that and there will be a big price to pay for it. Could the Minister clarify exactly what the situation is in regard to the exemption to Article 9.4 of the EU directive? Some of us tabled parliamentary questions asking the Minister to clarify the existence of an exemption for this country, and that there is no European requirement to introduce water charges. The Minister denied the existence of an exemption. We do not want to find ourselves in the situation in the new year where the Government is again throwing its hands up in the air and saying we have to do this or that because Europe is insisting. We heard further reports from people who seem to know the situation that if the Minister wants the exemption to continue, he must apply for it to be extended. Could the Minister clarify once and for all what is the situation? Could he confirm whether there is an exemption for Ireland? Will he also confirm whether a deadline is looming at the end of this month and what his intention is in that regard?

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