Billy Timmins (Wicklow, Fine Gael)
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Question 108: To ask the Minister for Enterprise, Trade and Employment his concerns regarding the impact of levies being imposed by local authorities on the development of small to medium-sized enterprises; and if he will make a statement on the matter. [31529/05]

Micheál Martin (Cork South Central, Fianna Fail)
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The framework for development contribution schemes was agreed under the Planning and Development Act 2000 to update the long-standing development levy system. That system had applied since 1963 and is a means of funding capital projects to service land for new development. The operation of these schemes is primarily a matter for my colleague, the Minister for the Environment, Heritage and Local Government.

Nevertheless, from an enterprise development and an employment perspective I am concerned about issues that affect the competitiveness of companies operating in this country and the jobs they sustain. I am aware that some enterprises have voiced concern about their experience regarding development contributions and the manner in which they are applied. This is of particular concern to manufacturing companies and those facing international competition.

Consequently my Department recently wrote to the Department of the Environment, Heritage and Local Government to explore how these issues can be considered. As a result, the Department of the Environment, Heritage and Local Government has agreed to chair an interdepartmental group to examine the matter.

This examination is particularly timely as all local authorities have indicated they will review their schemes in the next year or so. If the Deputy or others in the House wish to contact me about the operation of development contributions from an enterprise perspective, I will ensure that these views will be taken into account in the context of this review.

Billy Timmins (Wicklow, Fine Gael)
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I thank the Minister for his reply. All local authorities were obliged to have adopted these levies by March 2004. I have recently become a fan of the Minister and read his Ard-Fheis speech in which he criticised what I believe he referred to as the alternative Government when he expressed concerns about the councils and the high level of levies they had imposed. Does he agree that these high levels were imposed when the councils were, in the main, controlled by his party colleagues?

Can the Minister indicate what might be a reasonable levy for these councils to impose on potential development? Does he agree that the reason we have these development levies, be they residential or commercial, is because the Government does not fund local authority projects as it did in the past?

Micheál Martin (Cork South Central, Fianna Fail)
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I do not accept the Deputy's points because a range of new revenue opportunities have emerged for local authorities in recent times, not least these development levies. The economic growth and buoyancy of recent years must have added significantly to the revenue generating capacity of local authorities.

I have been around the country meeting the various——

Brendan Howlin (Wexford, Labour)
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Fianna Fáil Deputies.

Micheál Martin (Cork South Central, Fianna Fail)
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——sectors involved in the productive side of the economy, particularly on the manufacturing side as well as the chambers of commerce and so on. The variation between local authorities emerged as a factor. There can be quite sharp differences between the levies imposed by some local authorities as opposed to others, which illustrates the strong local control over the schemes adopted by any particular local authority.

We must be careful, particularly in respect of export-oriented manufacturing companies, to examine the overall picture in terms of retaining indigenous companies' manufacturing capabilities in this country to avoid the inadvertent creation of disincentives to their expansion here, given the global cost bases involved.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Was the Minister in Government at all during the last two years?

Micheál Martin (Cork South Central, Fianna Fail)
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Local authorities must take due note of this in future and I hope they will examine their schemes in that respect. I understand there is no differentiation between the commercial, manufacturing and retail sectors in many of the schemes. That is another factor which should be taken on board.

While these levies have been in force since 1963, updating them has been taken as an opportunity to ramp up some of them. The Deputy has asked a simple question and I have a concern about this matter from an enterprise perspective. I have articulated that concern to a number of managers.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister was very disingenuous when he said we always had these levies. A total of €250 million has been collected in levies arising from the Planning and Development Act 2000, at which time the Minister sat at the Cabinet table and allowed the 20% cut in capital expenditure of local authorities to be funded by another stealth charge to communities in the form of development levies. The Minister is crying crocodile tears if he talks about the threat to the manufacturing sector imposed by these levies and other costs when he presided over stealth charges and taxes set by his Government in order to make up the shortfall in local authority funding. He should ask the Minister for the Environment, Heritage and Local Government to review these levies, the related legislation and the state of capital funding to local authorities in light of this imposition.

Brendan Howlin (Wexford, Labour)
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Hear, hear.

Micheál Martin (Cork South Central, Fianna Fail)
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First, I object to the Deputy's comments. It is about time we accept responsibility at local level.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Government must accept it.

Micheál Martin (Cork South Central, Fianna Fail)
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With the greatest respect, Deputy Hogan's party made a big song and dance about gaining control of local authorities the length and breadth of the country. We will now see how——

Billy Timmins (Wicklow, Fine Gael)
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The Government complained.

Micheál Martin (Cork South Central, Fianna Fail)
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——pro-enterprise and responsible it is in terms of managing these levies at local level.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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If the Minister read the legislation, he would see the levies cannot be reviewed for two years.

Micheál Martin (Cork South Central, Fianna Fail)
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The legislation is no excuse for the wide differentiation between local authorities vis-À-vis these particular levies. Why is it that in one county it can be at a certain level and at a much higher level in another county? The Deputy cannot keep blaming the centre.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Government imposed the levies.

Micheál Martin (Cork South Central, Fianna Fail)
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When we give enabling powers and authority to local authorities, we in this House should accept that the responsibility then lies——

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Will the Minister accept that the Government imposed the levies?

Brendan Howlin (Wexford, Labour)
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It took away capital funding.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Government took away the authorities' capital funding.

Micheál Martin (Cork South Central, Fianna Fail)
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——with that particular body. The amount of funding allocated to local authorities has been increased year by year by consecutive Ministers.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister is out of touch. He should survey the country again.

Micheál Martin (Cork South Central, Fianna Fail)
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I am not out of touch and am very insulted.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister is totally out of touch.

Micheál Martin (Cork South Central, Fianna Fail)
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I hope that, from Fine Gael's latter day control of local authorities, we will witness some response to these types of issues.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister should not worry about that happening.

Billy Timmins (Wicklow, Fine Gael)
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What about stamp duty on commercial properties?

Micheál Martin (Cork South Central, Fianna Fail)
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I look forward to engaging with that party. I hope the matter rates enough of Fine Gael's attention in the forthcoming election at local authority level.

Billy Timmins (Wicklow, Fine Gael)
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We are not afraid.