Jan O'Sullivan (Limerick City, Labour) | Oireachtas source

We too will be supporting the Bill. It is a welcome opportunity to have this discussion because there are many issues that are very worrying. I refer, for example, to the revaluation process in particular. Other Deputies have raised the matter and the fact that valuation was not done for such a long time. Since the process started, it has caused difficulty for those whose valuations went up and they are the ones who raised the issues. For others, the valuation did not change very much or in some cases it went down. It is a difficulty for many businesses when their rates go up significantly. I accept we are dealing with the Local Government (Rates) Bill rather than the Valuation Act 2001, but it is welcome that both are at least in the same Department as they are interconnected and affect businesses in all cities, towns and villages.

The Minister of State, Deputy Phelan, said that what analysis is available concludes that commercial rates represent a small portion of overall business overheads compared with energy, rents, payroll and other inputs. That said, I wish to argue again for the small towns and villages where businesses might not have a very big turnover and properties are generally owned, which means there is no rent to pay. Most of these businesses have a small number of employees so the payroll bill will not be significant. In such cases, rates can make a major difference in terms of the viability of certain businesses. My colleague, Deputy Penrose, has been making that point about his constituency and small towns and villages around the country where such businesses are the lifeblood. While rates are not significant for a big business in a city, they are significant for those businesses and we must try to be as sensitive as possible.

Rates make up about 35% of the income of local government, so they are really important. We must ensure we maintain that kind of income base for local authorities. On the other hand, we must balance that against keeping businesses viable because they are the lifeblood not only of towns and villages but also of cities. We must try to get the balance right.

Deputy Casey made the case for moderation in terms of how soon the money must be paid in cases where valuations go up significantly. In that context, I welcome the removal of the two moieties in favour of staggered payments over the course of the year. That makes complete sense because it makes it much easier for businesses to meet their payments in a way that works for their turnover and the availability of funds. That change, therefore, is welcome.

While it is not in the Bill, the Minister of State noted that the Department is conducting a periodic critical review of the valuation tribunal. That relates to the valuations that are currently being carried out in various local authorities. Some of us received correspondence from owners of forecourt stations who argue that the system is not being very fair to them. They make the point that they have to take individual cases and are unable to take a class action which would be more helpful. I do not know whether the Minister of State can respond on that point as it is not strictly within the parameters of the Bill, but it is very much related to it.

I also wish to raise the provision whereby one can get a rates alleviation waiver to support specific policies. There is also the abatement of rates for vacant properties. The waiver scheme to support specific policy objectives related to development plans and local area plans, among others, should give scope for town and city centres to be prioritised. Perhaps the Minister of State could address the issue in his response. On many occasions we had debates on businesses in city and town centres having difficulty competing with out-of-town shopping centres where parking is generally free. Is there a way in which that could be addressed because generally in development plans and local area plans one has a provision to emphasise town centres? In the implementation of planning in accordance with development plans local authorities generally favour city and town centres because of the doughnut and other negative effects of out-of-town centres.

In terms of the abatement of rates for vacant properties, the Minister of State said section 8 provides that a local authority may provide a temporary abatement for vacant properties subject to any maximum relief, which may be specified by the Minister to ensure that all property owners other than those whose rates liability would be below a de minimisthreshold would make some level of payment to the local authority. He then referred to the 100% relief versus the 50% relief in some cities. The Minister of State stated later that the lack of any charge on vacant premises might act as a disincentive for the property to be put to best use. He said that there may be a maximum level of refunds to be provided, with the proviso that the amount could be reduced by individual local authorities. I wish to tease out whether the length of time a property is vacant can determine how the abatement is done. I am thinking of large supermarket chains – I will not name any – that leave premises empty for years in the middle of a town or city for commercial purposes. There is one in my city at the moment that is the subject of public debate. These companies deliberately leave the premises vacant. I am all for the abatement of rates where a property is vacant because the person who owns it cannot run a viable business, sell it or deal with it in a way that works for him or her, but where it has a detrimental effect on the area and where there is a commercial interest involved in keeping out competition, abatement of rates should not be available. Is there flexibility for a local authority to address the issue and not to incentivise premises being left vacant for a long period?

I also wish to raise the exemption of Government offices. Until the 1980s, rates were paid by Government offices. It can cause financial loss to local authorities when a State building, often a large one, is not subject to rates. Does the Minister of State have any intention of addressing that matter? I am not sure if it comes under the competence of the Bill but it is again one that should be addressed because it has a negative effect on the amount of money that comes in to local authorities, particularly in Dublin. Perhaps the Minister of State could address that issue as well.

Overall, the Bill is positive. The Minister of State said he would table amendments, which seem to be largely related to enforcement. The helpful document from the Library and Research Service indicates that while the explanatory memorandum states the Bill will form the basis for greater enforcement powers by local authorities in their collection of rates, it does not contain any specific enforcement provisions other than those relating to the appointment of authorised officers under section 15. From what the Minister of State said, the amendments he will bring forward will strengthen the powers, including recourse to certificates for collection by the court appointed sheriff. We look forward to debating that issue with the Minister of State.

A table in the Library and Research Service document shows the collection percentage for various local authorities. Some of them are a good bit lower than others. I am not too sure if there is any good reason for that, apart perhaps from the willingness of the local authority concerned to go after those who are not paying.

It is not fair on those who do pay and struggle to do so if others get away without paying. I refer to those who face no huge difficulty but simply do not pay. That is something that needs to be addressed. I have the table here. There is a 96% collection rate in Fingal, and that figure ranges down to 68% in Donegal and Louth. There is a big variation in between. Maybe there are good reasons for that, but there may also be situations where local authorities are just not collecting although it is possible to do so. As I said, this is very unfair on the businesses which struggle to pay the rates but still pay them. We look forward to further debate and to hearing the Minister of State's response.

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