Barry Cowen (Laois-Offaly, Fianna Fail) | Oireachtas source

We believe this proposal will be made in response to the Minister of State's decision, which was difficult to understand, to place a full producer responsibility initiative on waste tyres and thereby give an effective monopoly on waste tyre disposal to Repak. The effect of the introduction of such a convoluted scheme would be to create a very large indirect tyre tax for hauliers, farmers and private motorists. Under the current self-compliance scheme, the cost of disposing of a tyre is €1. This will increase significantly under the Government's proposal to introduce a full producer responsibility initiative for waste tyres, which will cause the cost per tyre to increase by €3 for cars, by €15 for trucks and by €20 for agricultural vehicles. It is most likely that hauliers will have to absorb this increase in costs directly. This will add significantly to the cost of doing business.

We also feel that the proposed scheme will fuel evasion and lead to a surge in black market activity. It will send all buyers of truck and tractor tyres across the Border to Northern Ireland. The costs in the UK mean that if this new tax is introduced, tyre purchasers will be able to save themselves €100 or more on a single set of tyres by crossing the Border. This proposal will give external sellers a huge unfair advantage over domestic sellers. It will lead to massive distortions in the market for tyres. We are sure that this destruction will unfortunately result in job losses in the industry.

Furthermore, the proposed system is not necessary. We believe the review on which it is based rests on shaky evidence. The RPS report contended that there was 50% non-compliance in the industry. This is questionable, however, because we are informed that the reporting group engaged with the retailers in an inadequate manner and made a number of rudimentary mistakes in its report.

While there may be compliance problems with the system in place, these arise from the lack of enforcement of current legislation rather than with the system itself. Monitoring of waste tyres can be improved without giving a market monopoly to any one industry, such as Repak. As opposed to the proposed full PRI system, we propose measures to strengthen the current system while allowing competition among licence collectors, imposing stronger sanctions for non-compliance and introducing mandatory registration to monitor compliance of waste collected. This is a similar type of system to those in place in the UK and Germany and we believe it functions most effectively. While protecting the environment, these proposals would keep hidden taxes on truck tyres at their current levels and would not impose further tax burdens on the sector or on the farming sector and motorists. Having recognised difficulties that arose by virtue of the discrepancy in costs between the UK, Northern Ireland and ourselves, it is very disappointing that the imposition of the tyre tax is fast approaching, doing down any positives that are contained in this Bill from the proposals to reduce the motor tax applying to the industry. I await the Minister's response.

See this speech in context