Niall Collins (Limerick, Fianna Fail)
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Question 1: To ask the Minister for the Environment; Community and Local Government if he has undertaken a review of the commercial rate system here; and if he will make a statement on the matter. [30521/11]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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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 local authority. The annual rate on valuation 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.

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 on a county-by-county basis. The purpose of the revaluation process is to update commercial valuations which will assist in providing a more equitable distribution of rates for those liable to pay rates. Local authorities have been asked by my Department to exercise restraint in setting the annual rate on valuation in this and previous years and they have responded positively in this regard. I recognise these are difficult economic times for many businesses. I will continue to keep all matters relating to rates under regular consideration and review and I am determined that every avenue will be pursued to optimise efficiency and contain and reduce costs in the local government sector.

Niall Collins (Limerick, Fianna Fail)
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It is fair to say this is one of the greatest challenges facing commercial Ireland and its small and medium sized businesses, as the Minister is aware. It is also fair to say there has been no statement of substance from the Government that has given any degree of comfort or hope to commercial ratepayers. The Minister has met the new group, Irish Employers for Affordable Rates, which held a lobby last week across the road. Such is the message they have given me.

We realise the system is complex. There are some 170,000 businesses and they pay €1.3 million in rates per annum. At the Committee of Public Accounts this morning, the Valuation Office indicated the current revaluation exercise could take more than ten years and this is of great concern. We must see a degree of action on the matter. The Irish Employers for Affordable Rates pointed out, correctly, that Colm McCarthy was able to undertake an exercise swiftly and the Minister and the Government has accepted and is implementing many of his recommendations. The McCarthy group was able to undertake an exercise that started in late 2008 and finished during the middle of 2009 with the production of a comprehensive document. As the Minister is aware, we need action on this issue.

Will the Minister not consider the United Kingdom model whereby a business's ability to pay is taken into consideration? Has consideration been given to any variation or amendment to the Valuation Act? The household charge has been debated here and the Minister has announced that it will come into effect in January. I understand it will be a self-assessment tax, like the non-principal private residence, NPPR, tax. Could we consider a system of self-assessment for businesses based on another model, one that is perhaps similar to the VAT registration model for businesses above a certain threshold? At the moment small and medium sized businesses are falling flat on their faces. This is a barrier to their survival, a point we cannot emphasise enough. The Minister, the Minister of State, Deputy Penrose, and every elected person in the House understands as much as well as everyone in the business community but nothing appears to be happening about it.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I agree totally with the sentiments expressed by Deputy Niall Collins on the small business sector. Those in the sector are under pressure from a variety of areas and the cost base of surviving in business is a legitimate concern for them. However, given that 29% of local authority income is from the commercial rate base one can understand how important a source of income it is for local authorities as well. In the past two years there has been a reduction in commercial rates of 0.64% across the 88 local authorities. This may be a small reduction but in the context of the times we are in it was important that we did not increase them. That is always the easy options for local authority members. I am pleased that my initiative in this regard has worked well with the leaders of the groups.

I met the Commissioner of Valuation recently and we considered various ways in which we could improve the revaluation process and speed it up. It is totally unacceptable that it could take ten or more years to carry out a revaluation process. Revaluation has been carried out in several local authorities in the Dublin area with mixed success. Some people believe that a revaluation process will be a winner for them but that it not always the case. There are winners and losers in this process. Nevertheless, if a revaluation process is carried out and people believe there is a fair application given the times we are in, then they should be prepared to acknowledge that. I expect the Commissioner on Valuation will come back to Government, the Minister for Finance and myself with proposals in the coming weeks. There is a valuation Bill on the A list to go through the Houses of the Oireachtas this session and that will give us an opportunity to determine what we can do to help.