Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I am aware of the difficulties that many hotels, restaurants and other tourism businesses face in meeting the cost of local authority charges and have written to the Minister for the Environment, Heritage and Local Government regarding these costs. The issue has also been discussed and considered at the Cabinet Committee on Economic Renewal, of which I and the Minister for Environment, Heritage and Local Government are members.

I understand from the Minister that local authorities have taken a number of steps to reduce their own cost bases in order to minimise the charges they must pass on to customers, including businesses. These include reductions in staff numbers and payroll costs. Further reductions are to be made in the context of the report of the local government efficiency review group and the Government's four year plan.

I also understand that the Commissioner of Valuation is actively reviewing options which might hold potential for delivery of the national revaluation programme in a shorter timeframe than originally intended. Where they have taken place, revaluations have resulted in significant reductions in rates for hotels although other categories of premises have experienced increases. In any event, it is important that valuations are as up to date as possible.

It is vital that local authorities do their best to support jobs in their local area and to avoid putting unnecessary financial pressure on existing businesses through excessive charges. At the same time, I appreciate their funding is under considerable pressure in the current economic environment. I believe it is in everybody's interest that local authorities should have a broader and more sustainable income base from which to fund vital local services. The introduction of water charges, as signalled in last year's budget, will help to ensure that this is the case, as will other local charges.

A broadening of the revenue base at local level, will help to relieve some of the burden on tourism and other businesses. At the same time, given that the Deputy's party has a large proportion of members on the city and county councils I urge him to do everything in his power to ensure that his party councillors consider the needs of employers when setting their annual budgets, with a view to supporting jobs for local people.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I accept it is an important issue and that is why we have put into the plan that we will expedite the revaluation of the whole country. It is quite a heavy burden, particularly on hotels. Where revaluation has taken place hotels' rates have been reduced. I understand rates account for nearly 7.6% of the operating costs for hotels whereas for other retailers it is between 1% and 4%. It seems to be disproportionate and that is why within the plan we have accepted that this is something that needs to be expedited and we will do it.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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That is one issue hotels have raised with me. In other cases, many of them shut down bedrooms and keep a bar open. There are various ways of operating. If there was a more up to date and equitable revaluation then it would be within their power to be able to pay because they would be able to see it was fair. Another issue to which I referred briefly in my answer is that all of the burden falls on businesses. When water rates and additional local contributions - another word for property tax - included in the plan are implemented that will balance out the payments being made to local authorities and should help businesses generally.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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As the Deputy will know I met NAMA and senior officials in my Department and from Fáilte Ireland to discuss the issue of hotels generally. They have assured me that they are not in the business of propping up hotels, but at the same time they have to take an economic valuation to ensure there is not a fire sale because that would not be in the best interests of the industry. They are very open to working with the national policy guidelines which I believe are very helpful. There is speculation about the numbers of hotels held by banks and NAMA. NAMA currently has some 30 hotels based in Ireland and it anticipates that by the end of its dealings it will have 60 or 65 hotels. It is not the huge numbers people thought. It is considering a geographic spread to determine its current position.

What we need, because we have set out a target to increase the number of tourists visiting Ireland to 8 million people over the next four to five years, is to have a range of quality hotels available so that there are three to five star hotels, guest houses and bed and breakfasts. We also we need to ensure that we do not get rid of hotels and then find that we do not have sufficient capacity. I have no doubt that the market will determine that.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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As I informed the House previously, I received a number of representations from the car rental industry throughout 2010 seeking support on the basis that it was required to provide additional car hire capacity for tourists. The matter was also raised with me at meetings with other tourism interests in the early part of the year. The concerns expressed to me related mainly to the availability of automatic transmission cars in the traditional summer peak season, chiefly with the North American market in mind.

From a tourism perspective our main concern is the availability of cars and the price consumers have to pay. In that regard, my Department and the tourism agencies monitored the situation closely with regard to its possible impact on visitors from overseas. Although I received representations urging Government intervention during 2010, I also received a number of approaches, both from within the car hire industry and the wider tourism sector, against such a course of action. In these cases, the view was that the potential shortages would not be as extensive as suggested and the market should take its course.

As part of our monitoring exercise, my Department conducted a number of web-based surveys of car hire throughout the year. Our conclusion and that of the tourism agencies was that the availability of cars in 2010 was such that it did not warrant a Government intervention to ensure an adequate supply for tourists and I am happy to advise the House that this proved to be the case. The tourism agencies have since advised me that there were very few shortages in 2010. There was some pressure during the peak two weeks of the 2010 season leading to increased prices but these were not enough to cause major concern and intervention during the year could not have been justified.

I am planning to meet the Car Rental Council of Ireland to discuss the sector and its budget submission to the Minister for Finance in the near future. I will continue to consult the Minister for Finance regarding the options open to Government if State intervention is considered necessary. For State intervention to be warranted there would have to be clear evidence of market failure and the prospect that any intervention would result in incremental hire vehicles coming on to the market, and remaining in place, to deal with potential peak demand in 2011 and later years. It is too early yet to say if shortages might arise in 2011 but I will continue to engage with the sector and monitor developments closely.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I accept that over the next few years with the aim to increase tourism there will obviously be increased demand. It is interesting that the Irish Tourism Industry Confederation, of which the Car Rental Council is a member, did not look for support for the car rental sector for next year in the budget. It did last year.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The car rental industry should look to see what works well in other countries. I accept car hire is an important part of the rural tourism trade. It is the means people use to get around the country. When the industry looked to have the scrappage scheme extended, the Department of Finance was anxious not to do so because by extending it to used cars, which is effectively what the rental car would be at the end of a few months, the scheme would cost much more and there would be no corresponding increase in VRT or VAT coming back to the State. The millions of euro required for it were simply not there. We anticipate an increase in tourists next year. I have no evidence to suggest there will be major pressure for car rentals. I was due to meet the Car Rental Council of Ireland last week but unfortunately I had to cancel due to a Cabinet meeting. However, I will reschedule that meeting to hear its views.