Stephen Donnelly (Wicklow, Social Democrats) | Oireachtas source

I propose to share time with Deputy Catherine Murphy. I welcome the fact that the issue of Irish Water has been brought into the Dáil for debate. It is something the Social Democrats called for this week. It is an important issue but it is only one of the important issues facing the country, and we are also dealing with crises in homelessness, housing, distressed mortgages, health care and child poverty, to name but a few. However, it would have been entirely unacceptable for the Thirty-second Dáil to fall because of an inability on the part of Fianna Fáil and Fine Gael to find a compromise solution in talks in which none of the rest of the Dáil is involved.

Most, if not all, Members of the House agree that investment in the water system is required to the tune of an additional several hundred million euro per year for at least the next seven to ten years. Most, though probably not all, Members of the House also agree that the water supply should remain in permanent public ownership in this country. The solution to the second of those points is very straightforward. First, we should hold a referendum seeking to change Article 10 of the Constitution enshrining the water supply in public permanent ownership. Second, we should disband Irish Water as a commercial semi-State and set up a public board, or whatever we might call it. Those two acts would absolutely guarantee that the Irish water system remains in permanent public ownership. Regardless of what happens to domestic charges, those two things should happen and I imagine that a very strong majority of this House would support a referendum and ending the commercial semi-State entity that is Irish Water.

The solution to how to find the funds for investment is a lot more complex. The main argument for domestic charges has been that the money is needed for additional investment but this is a false argument. The economics of the water charge are such that the money raised more or less covers the cost of raising the money so not a single euro paid out by Irish households is being used to invest in the water system, nor is it being used to provide people with water. It covers the cost of taking the money from them. Nevertheless, capital investment is happening. This is much needed and welcome but how is it happening if the domestic water charge is not raising any money to make it happen? It is happening because Irish Water is borrowing.

The second argument put forward by the Government for a domestic water charge is that a domestic water charge allows Irish Water to borrow this money, which means we do not have to shrink the fiscal space to which the Minister for the Environment, Community and Local Government, Deputy Alan Kelly, referred. However, Irish Water is borrowing on balance sheet so the Irish State can borrow on balance sheet, but at a much lower cost, to do exactly the same thing. It costs approximately twice as much money in Ireland per capitato supply water as it does in the UK, including in Northern Ireland where there is a similar geography and population density. Therein lies the answer to finding the several hundred million euro per year required for capital investment in the system. Targets have already been set and agreed by the regulator and a significant cost saving can be found by bringing 34 utilities into one national entity and that money can and should be used to fund the upgrading of the system. There is a short-term cashflow lag between the savings that can be found because, for example, it would have to be done without compulsory redundancies, so it would take time. The investment, however, is required now and Irish Water is bridging that funding gap by borrowing but it is borrowing on balance sheet and the State can do exactly the same thing.

It is a reasonable argument to suggest that everybody be provided with a very generous allowance for free and we would charge people for excess usage. The reason not to do that is that it costs some €100 million a year to charge people for water and it is too expensive just to stop a very small number of people from using too much water. For these reasons, the Social Democrats believes the domestic water charge in Ireland does not make sense. We would like to see a referendum held, the commercial semi-State ended and a national water board constituted.

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