Frank O'Rourke (Kildare North, Fianna Fail) | Oireachtas source

I am delighted to speak on this topic. The current water charges system has failed. It has failed because, when considered in the context of overall taxation policy, it has failed the fairness test. Like many other policies the Fine Gael–Labour Party Government implemented when correcting the public finances or sharing financial gains, its policy in this regard was to prioritise the well-off instead of the less well-off. All of its budgets were adjudicated on by the ESRI as being regressive in nature, as distinct from the fairer progressive approach needed. The ESRI's report on budget 2015 which confirmed Social Justice Ireland's analysis of that budget stated it had been the fourth regressive budget in a row introduced by the Fine Gael–Labour Party Government and a budget that widened the gap between rich and poor. The ESRI's analysis of the previous year's budget, budget 2014, showed that it had had its greatest impact - a reduction of 2% - on low-income groups.

For taxation measures to be accepted by the people, they must be fair, but the way in which the Fine Gael–Labour Party Government went about implementing the water charges regime lacked fairness. A quick analysis of the income and expenditure figures for water charges demonstrates what a total fiasco the former Government made of the implementation of the charges regime. Let us consider last year's figures. In 2015 only 53% of water bills were paid. This level of payment secured annual revenue to the State of €144 million. However, €100 million was spent by the Government on the water grant which was promoted as some kind of a water conservation incentive. However, this payment was not linked with any conservation measure; it was only to get the people to pay their water charges. It was an indirect admission by the Government that its approach to water charges had failed. In 2015, €41 million was due in interest repayments over the year, while another €25 million was paid in administration costs. On this basis, taking costs and revenue into account, the State actually lost €22 million in total on its water charges regime in 2015. Some €46 million a year is being spent on wages in Irish Water, while more will be spent on bonuses. This is on top of the €172 million in set-up costs. I am not aware of any other tax introduced in recent memory in the collection of which money was lost. We need to end this failed regime and move on from this issue.

When all costs are factored in, namely, the €540 million spent on water meters, the €172 million spent in the setting up of Irish Water and the €46 million spent in running it and paying wages and bonuses, the Government's creation of Irish Water will leave the taxpayer €759 million worse off this year than if it had not been set up. Taking this in the context of the local authorities already having in place many specialised and dedicated staff dealing with water-related issues, was there a need to create such a monster as Irish Water? The staff in local authorities are carrying out the works at the request of Irish Water.

One of the reasons for setting up Irish Water was related to its ability to borrow money off balance sheet. Private borrowing by Irish Water is now effectively impossible owing to its growing reliance on Government payments. It will be more expensive for Irish Water to borrow on the markets than the Government. Why would we set up this body, facilitate it to borrow money at more expensive rates than are available to the Government and then effectively ask the people to meet the increased cost of borrowing through their water charges?

Water charges were introduced following the introduction of the universal social charge, the property tax and the removal of many social protection benefits, including benefits that were taken from older people. When the Fine Gael–Labour Party Government made a decision to adjust universal social charge levels in its last budget, it decided to reward the well-off disproportionately, which was another example of its regressive and unfair approach to taxation policies.

The Government will introduce further amendments to the Bill to ensure the suspension period runs in tandem with the timeframe for the work of the expert commission and the Oireachtas on the issue. Our support for the Bill is subject to this happening. No new bills will be liable for payment until the end of March 2017, by which time the Dáil is due to have voted on the future of water charges having considered the expert commission’s report and the recommendations of the special Oireachtas committee. In effect, water charges are gone until the Dáil votes on the matter.

In the European Parliament in September 2015 Sinn Féin MEPs voted in favour of "providing for the application of a progressive charge that is proportional to the amount of water used", It is clear that the official Sinn Féin position on this issue abroad is quite different from that at home. From 2007 to 2011 the then Northern Ireland Minister for Regional Development, Mr. Conor Murphy of Sinn Féin, had the opportunity to reverse the policy on water metering, but he made no attempt to do so. Under his watch, a comprehensive water metering programme took place across domestic properties in Northern Ireland. In the recent Brexit referendum campaign I watched with interest as Sinn Féin campaigned for a "Remain" vote. In every EU referendum that took place in this jurisdiction in recent memory it campaigned against the European Union. Which is the real Sinn Féin? Again, we find its approach is completely inconsistent.

Ireland faces a range of issues, not simply the argument on water charges. Dáil Éireann is obliged to confront these matters. The health service, housing, the future of education, including special needs education, supports for older people and crime prevention all require a major political commitment. We need to resolve the water charges issue and move on and the Bill gives us an opportunity to do so. It gives us a window of opportunity to end water charges, solve the problem of Irish Water and move on to the serious political issues, while still enabling stable government at a time when stable government is most needed. The Bill reflects the first part of the Fianna Fáil agreement in facilitating a minority Government that will see water charges immediately suspended and their future decided by the Dáil.

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