Robert Troy (Longford-Westmeath, Fianna Fail)
Link to this: Individually | In context

I raise this issue which is very important to ratepayers the length and breadth of the country and not just to those of County Westmeath or County Longford. As recently as a number of weeks ago, a group has formed called, Employers for Affordable Rates. This group is initiating a campaign to lobby the Government to introduce new measures. By the time the House returns in September, the debate will have started at a local level when it comes to the setting of the county council annual rates. There is a misconception that a reduction of 1% to 4% in the county council rates would benefit businesses but this will not benefit small businesses. The only people to benefit will be large multinational companies.

The method of funding for local authorities needs to be examined. The business community requires a more fair and equitable system. We all know that local authorities are obliged by law to levy rates on commercial properties which have been entered in the valuation list by the independent Commissioner of Valuation. At present this system is draconian, inequitable and unfair. The valuation list used for almost all of Ireland is based on the Griffith valuation carried out in the 19th century. Maintaining these lists requires the Valuation Office to determine valuations by reference to the values of comparable properties on the same valuation list. The result is a list of valuations that bears no resemblance to modern valuation levels and contains many anomalies.

The Valuation Office is currently revaluing all commercial properties in Ireland based on the rental value in 2005. We all know that today's economic circumstances are substantially different from those of 2005. The figures are totally out of date and the office has only revalued three rating authorities out of a total of 88. Even if it was revaluing to a realistic figure, how long would it take for it to get through the remaining 85 rating authorities?

We are in an awful situation. Businesses are on the brink and if they are not closing they are laying off staff in order just to pay the rates. Even in 2009 local authorities were only able to collect 80% of the rates. Businesses are reducing staff to pay rates which means more people are going on the live register. For our economic recovery we need more competitive businesses to create jobs. When we return after the summer recess the Government should introduce an amendment to the Valuation Act so that businesses that are struggling can appeal the level of rates they are being charged. At the moment the local authority has no facility to negotiate with the ratepayer so it is all or nothing. If a business goes out of business, it does not need to pay any rates. However, it might just need a helping hand to reduce the rates somewhat in order to stay in business.

I am disappointed the Minister for the Environment, Community and Local Government is not here for this debate. We also need to set up a review group to consider how we fund local authorities. It is unfair that the entire burden is placed on businesses. We need more sustainable businesses with more sustainable jobs and more people paying into the Exchequer and fewer people on the dole. In addition, if the high streets are full of cars even the local authorities are benefiting from car parking charges so it is a win-win situation. This is a very important issue for the business community and everybody benefits when we have job creation.

The Minister for the Environment, Community and Local Government needs to consider how we can amend the present system. I have spoken to a number of businesspeople in my constituency who have suggestions to make. We could charge based on a company's turnover and require the company to submit its VAT returns on a bimonthly basis. People are willing to give their advice and the benefit of their expertise. We know a charge needs to be paid but we need to ensure it is fairer and more equitable.

This is the last Adjournment Debate, so we are entering the history books.

Michael Kitt (Galway East, Fianna Fail)
Link to this: Individually | In context

The Deputy can take a bow.

Robert Troy (Longford-Westmeath, Fianna Fail)
Link to this: Individually | In context

I am here along with Deputies Mathews and Durkan - two new Deputies and one long-standing Member.

Dinny McGinley (Donegal South West, Fine Gael)
Link to this: Individually | In context

We might get a footnote in history yet.

I thank the Deputy for raising this matter, which is of interest to so many businesses and commercial interests in every part of the country. Local authorities are under a statutory obligation to levy rates on any property used for commercial purposes in accordance with the details entered in the valuation lists prepared by the independent Commissioner of Valuation under the Valuation Act 2001. The levying and collection of rates are matters for each individual local authority. The annual rate on valuation which is applied to the valuation of each property, determined by the Valuation Office, to obtain the amount payable in rates, is decided by the elected members of each local authority in the annual budget and its determination is a reserved function of a local authority. Rates income is a very important contribution to the cost of services provided by local authorities such as roads, water, public lighting, development control, parks and open spaces.

The factors that influence the decision on the annual rate on valuation include the level of services to be provided by the local authority and the income available to fund these services. The elected members therefore adopt the annual rate on valuation they consider necessary in order to provide the range of services for the communities, including businesses, in their area. In this regard, all rates collected locally are spent exclusively on providing services within that area. This is local democracy in action.

The Government is acutely aware of the pressures on small and medium-sized businesses and the challenging economic environment in which many property and business owners are operating at the present time. Local authorities have responded positively to requests to them by the Minister for the Environment, Community and Local Government to exercise restraint in setting commercial rates to support competitiveness in the economy and to protect the interests of communities. The annual rates on valuation have been reduced by an average of 0.6% in 2010 and by a similar level in 2011.

It is recognised that these are difficult economic times for many businesses and the Minister for the Environment, Community and Local Government, Deputy Hogan, will continue to keep the approach to rates by local authorities under active review. The Commissioner of Valuation, who has sole responsibility for all valuation matters, is conducting a programme of revaluation of all commercial and industrial properties throughout the State. To date revaluations have been completed in the South Dublin, Fingal and Dún Laoghaire-Rathdown County Council areas. A revaluation is currently under way in the Dublin City Council area. It is intended to roll out the programme to further local authority areas later this year.

Following completion of the revaluation programme, there will be a much closer and uniform relationship between rental values of property and their commercial rates liability and this relationship will thereafter be maintained by means of recurring revaluations provided for in the Valuation Act. In this way, the revaluation process will lead to more consistent and up-to-date valuations for rating purposes and will assist in making the rating system fairer and equitable for ratepayers. I understand that the Commissioner of Valuation is actively reviewing options which might facilitate the delivery of the revaluation programme within a shorter timeframe.