Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 33: To ask the Minister for the Environment, Heritage and Local Government if his Department is drawing up proposals for revenue-raising measures or reductions in expenditure arising from the review of financial measures recently announced by the Department of Finance; and if he will make a statement on the matter. [10330/09]

John Gormley (Dublin South East, Green Party)
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My Department is advancing the preparation of necessary legislation to give effect to a new charge to be levied by local authorities on non-principal private residences, as announced in budget 2009. It is expected the new Bill setting out the necessary legislative provisions will be introduced shortly and the Government's intention is to have it enacted as soon as possible thereafter. I expect this charge to make a significant contribution to local authority income in 2009.

The Government has already indicated, in light of the further deterioration in the public finances, that public expenditure provisions and revenue-increasing measures will be reviewed in the coming weeks with a view to adhering to the planned budget strategy for the current year. I am at present reviewing all my Department's expenditure programmes in consultation with the Minister for Finance. Pending the conclusion of these deliberations, it would be premature to anticipate the outcome of the review or the detail of any potential proposals that may emerge from it. However, there will of course be reductions. My intention is to rigorously assess all areas of current and capital spending with a view to prioritising those that support the maintenance of jobs, position the economy for recovery, address essential social objectives and support the achievement of key environmental compliance requirements.

The Minister for Finance has already indicated the timeframe within which the Government intends to complete the review now under way. It is open to the Opposition parties to respond to the recent invitation to put forward their own suggestions for addressing the critical economic and fiscal difficulties we face and we will give full consideration to any such proposals. In the meantime, as outlined, I will be assessing all expenditure and seeking greater efficiencies, and my Department will be consulting local authorities and the bodies under the aegis of the Department.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I assure the Minister that he has always received constructive suggestions from this side of the House. The leader of our party asked this morning for additional assistance and information regarding these matters before we can come to any conclusion. We will not have responsibility without power, and we will not have an input without information. The Minister cannot expect us to participate on that basis.

Would this not be a good time to dispose of the e-voting machines? This would result in a substantial saving. Nobody can understand why it is taking the Minister so long, after almost two years in office, to bite the bullet in this regard.

There has been a massive increase in applications for schemes such as housing aid for the elderly and housing adaptation grants since their introduction. Is it sustainable for the Department to continue these schemes without clearing the backlog? What proposals are there to clear that backlog? Finally, is the Minister in favour of introducing a property tax on principal private residences in the context of his proposals for the budget?

John Gormley (Dublin South East, Green Party)
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The concept of a property tax is being examined, as the Deputy knows, by the Commission on Taxation, which is due to report in September. We will consider all its proposals. It is investigating a range of proposals including a carbon tax and some form of property tax. We have been assured by the Minister for Finance that the carbon tax will be introduced but, again, it is premature to talk about the sort of property taxes, if any, that are being considered or that will be recommended. That does not preclude us, however, from going ahead with the €200 levy to which I referred in my reply. The legislation will be introduced and it will be a significant step forward in terms of broadening the revenue base for local authorities.

Applications for schemes such as housing aid for the elderly have increased, but, in terms of what local authorities can and cannot do, we are also looking at a substantial decrease in the number of planning applications, for example. Thus, I do not think there will be a problem with a backlog. The only problem will be whether we can sustain the investment from my Department over the current period or will need to make substantial cutbacks. In essence, the Deputy's question is about sustaining such services through capital investment. The frank answer is that under the current circumstances, of course we will have to make adjustments. There is no question about that. We will consider all aspects, including the question of the voting machines, which I am considering in detail. As I have said many times, I will be in a position to make a judgment on that as soon as I get the progress report.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister is spending so much time considering this that the e-voting machines will have rotted away by the time the Minister has come to a conclusion. I do not know what the Minister is looking at——

Terence Flanagan (Dublin North East, Fine Gael)
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Dust.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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——but it beggars belief that it has taken so long.

The motor trade is going through a difficult period and that will have implications for funding. Has the Minister carried out an evaluation of the impact on the local government fund of the massive deterioration in the number of motor vehicles sold in 2009? How will we make up the shortfall?

John Gormley (Dublin South East, Green Party)
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The Deputy is right to point this out. A total of 85% of new vehicles purchased this year are in the low-CO2 category, which shows the success of that scheme and that it is having the desired effect. However, there has been a reduction in new car sales this year. Two thirds of the money going to local government comes from motor taxation, while one third comes from the Exchequer. My officials are investigating this. They are aware there is a shortfall due to the reduction in car sales and we are mindful that local government funding will be reduced as a result. That is simply a fact of life and we will have to consider alternatives. The way we fund local government, by relying on motor tax, is not sustainable either environmentally or economically. We must consider more sustainable forms of revenue, including the possibility of moving away from reliance on motor taxes and commercial rates. Instead we must consider possibilities such as those mentioned, including a tax on second properties. This should prove to be an enormous success and will, I hope, be the beginning of a new way of funding local government.

Brendan Howlin (Wexford, Labour)
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We will move on to Question No. 35 as Deputy Tuffy is not here.