Brian Stanley (Laois-Offaly, Sinn Fein) | Oireachtas source

To continue where I left off, section 6 proposes the appointment of a person who is not an officer of the Commissioner of Valuation or attached to the valuation tribunal to carry out valuations. It needs to be made clearer what the intention is in the Bill. The concern my party has relates to the possible outsourcing of that to a company involved in the property sector. This poses considerable risks. Many things were outsourced by the previous Government, and we saw the problems that caused in terms of the influence the contracted party can have over the public sector and how things can be manipulated by consultants and others.

Sometimes, people criticise the Civil Service but large parts of it work very well. Of course there is always need for improvement and to update, upgrade and make things more efficient. However, we must not throw out what is good nor lose sight of it. The one thing the Civil Service is good at is keeping things in a straight line. Civil servants are very cautious and careful. Some whom I have met are overly cautious and too careful for my liking but that is the nature of things. That is the tension between elected representatives and civil servants. What the Minister of State has outlined poses considerable risks. Self-assessment is one suggestion that was previously made and it should be seriously considered.

The proposal in section 7 to publish a list of properties prior to rates being imposed would be a good move, as it would allow for a more transparent process, and for the case to be made on new valuations. That would perhaps help to address the situation I referred to earlier where businesses claim that they are being subjected to rates that bear no relation to the climate in which they are attempting to operate.

Section 10 also touches on the area of appeals regarding valuations. Similarly, section 14 allows an occupier a period of 40 days in which to make an appeal in a case where the commissioner has decided that there should not be a downward revision of rates due to changed circumstances. It has been argued that there should be a longer period than 40 days in which such appeals can be made to allow people more time to make a proper case.

It has been argued that the definition of "material change in circumstances" needs to be widened. A broader definition would allow a ratepayer to seek a revision of a rateable valuation where there has been a significant fall in a property’s net value or rental value since the rateable valuation was last entered in the valuation list. Footfall and the location of a property are considerations for staff of the Valuation Office when they make a determination on the rateable valuation of a property. If premises in a town centre have only 30% to 40% occupancy that must be factored into the process.

One could ask whether there is a case to be made for mandatory revaluations on a more regular basis. I was made aware this week of a good example of the consequences of the failure to re-assess rates in the context of the changed economic climate. It relates to a premises in south Dublin which has been mostly vacant since 2007. The main reason given for the failure to rent the premises to a new occupier is the difficulty of sustaining a business because the valuation and rates on which the rent is based bear no relation to the radically changed economic climate in the past ten years. When the premises was first valued, the rent and rate assessment took place in the 2000s and the economic situation and everything else is completely different now. The current rates bill is based on a rateable value of €56,400. That was based on an assessment made in September 2005 by South Dublin County Council. That was at a time when retail income levels even for the smallest units had rocketed. At the time rents were at an all-time, historic high. The rate was not sustainable since the downturn in 2008. That proves we need more regular revaluations based on changed economic circumstances.

The case I have outlined is very graphic but it is not uncommon. I have heard of other such cases. It has been argued that not only the current regulations, but also the provisions in the Bill, provide a definition of changed circumstances that would make it very difficult for current occupiers to secure an assessment based on changed circumstances as they relate to income levels and rent. If the Government is serious about maximising the potential of the improved economic conditions, it must do more to address the situation.

I am aware of the importance of rates, in particular as an income source for local authorities. We spoke many times about the narrow basis of local authorities to generate funding. The local property tax should go to the Minister for the Environment, Community and Local Government. I accept the point does not relate to the matter under discussion but a minimum of 80% of local property tax should go to the local authority where it is collected. It should not be sucked out and brought into general Exchequer funding and siphoned off to bodies such as Irish Water. We must maintain the rateable base but we must do so in as fair a way as possible.

Getting businesses to return to vacant properties would encourage an upturn in local economies through increased employment and local spending, which would benefit the wider community. Such activity might appear to be small and insignificant but local spending makes an incremental difference when it happens in hundreds or thousands of places throughout the country. In turn, that will benefit local authorities because towns such as those I mentioned which get nothing currently would get rates paid. Instead of having a row of empty shops there is a benefit if two or three premises are occupied, even if they are paying half the specified rate.

When determining the rateable valuation of a premises, consideration must be given to the type of business in operation. Currently, a bank next door to a greengrocer with the same size of premises pays the same rate even though the businesses are different. Banks operate on a completely different basis. Banks and greengrocers must have different rates. The income level must be factored into the valuation. Revenue knows the income level. One cannot fiddle such details even if the system is based on self-assessment because the figures are on Revenue's books. The income from a business must have some bearing on the rateable valuation.

There are a number of ways in which the Bill could be improved, some of which can be addressed on Committee Stage through relevant amendments. I refer to provisions to take account of the radically changed circumstances which have pertained since the onset of the economic downturn six to seven years ago. While it might be argued that we are now in the early stages of an economic upturn, and I hope we are, it is clear that rates and rent still present an obstacle, in some cases on a huge scale. It can be a tipping point in terms of survival for new businesses when they start up.

The Bill does not properly address many of the issues I have outlined. I welcome the update of the previous system. The system was due to be overhauled in 2012 but this is the here and now. Tomorrow is the first day of the future. We should try to make the Bill as good and fair as we can in order to have a good, transparent system of rates that will help small businesses and employment and also help to fund local authorities in a sustainable way. I urge the Government to be open to the amendments. We do not table them in an attempt to head butt the Government or to have a go at it. We are not always right either, but we table the amendments sincerely in an attempt to ensure we have the best possible legislation for small businesses, local authorities and the economy.

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