Dáil debates

Friday, 4 July 2014

Valuation Bill 2014: Second Stage [Private Members]

 

11:00 am

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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I move: "That the Bill be now read a Second Time."

Throughout Ireland every day of every week of the year, hundreds if not thousands of men, women and children dust off their boots, grab their jerseys and make for their local sports club. Countless training sessions and matches are played in various sports in every county and they are a vital part of the fabric of Irish life. The clubs are the lifeblood of our communities. They are kept alive and kicking by the volunteer heartbeat that sustains so much of what we take for granted. Without these men and women willing to give their time, energy and commitment, the clubs would disappear.

Over the years, thanks to the hard work and enterprise of committed volunteers, these clubs have grown from being just half-grazed fields rented off a friendly local farmer into state-of-the-art sports facilities. Part of this process has been the establishment of licensed bars to provide a social element to the clubs. These bars help to raise funds for the club and give members, particularly non-playing and older members, a social focal point. It is a safe controlled environment for members of a club to come together. Whether GAA, rugby or soccer, these clubs form the backbone of their communities, and their bars are a part of this. However, the commercial rates system hits these clubs with deeply unfair bills, and this Bill is a simple measure to help ease the financial pressure on these clubs.

The existing commercial rates system unfairly penalises clubs with a licensed premises. The current rules ensure the entire complex, rather than just the bar, is hit with charges, leaving clubs with massive commercial rates costs. Clubs with a sports hall, dressing rooms, meeting rooms and gyms are hit with commercial rates on the entire premises because they also have a licensed bar. The Bill aims to ensure clubs only pay rates on the commercial bar and not on the actual sports facility. Clubs should not be penalised for developing top-class facilities just because they have a bar.

Rates can, and are, pushing over the edge many clubs struggling to make ends meet. Bars are generally used for social events and as a fund-raising mechanism, which the hefty commercial rates bill seriously undermines. Clubs' rates charges form a minuscule part of the €1.7 billion total raised in commercial rates per annum by local authorities. It is minuscule even as a percentage of the €550 million property tax, €500 million of which is due to go back into local authorities this year, contrary to what happened last year, but that is a debate for another day. Essentially, the money raised from clubs is a small part of local government finances but a big slice of the costs for hundreds of clubs.

I call on the Government to fully adopt the Bill on its own, or add it as an amendment to the Valuation (Amendment) (No. 2) Bill 2012 which is before the Seanad. It cannot, like a number of other pieces of legislation accepted in principle, be allowed to languish on the shelves of a Department going nowhere fast. The Bill is a simple change that would ensure clubs pay rates only on the licensed bar section of their facilities. Therefore, no other bar in the locality would be at a competitive disadvantage as a result of the change because rates would still be paid on the club's bar. On a broader level, it would also help ensure alcohol is consumed in a safe controlled environment rather than through dangerous binge drinking.

Fianna Fáil believes the Valuation Act should be revisited. In particular, the definition of "community hall " in the Act should be clarified to include sports and recreational facilities provided by registered clubs. The crux of this short Bill is that only the licensed premises is to be rated and not the entire facility which is used for sporting purposes. I draw to the attention of the House the specific changes the Bill will introduce if it is accepted by the Government. The interpretation of "community hall" in Part 1 of the Valuation Act 2001 should be changed to include the facility of a registered club not forming part of the licensed premises of the club. This would give relief from rates to the non-licensed sports and leisure facilities of clubs. The legislation would achieve this through making a small change to the definition of "community hall" in the Valuation Act 2001. At present the Valuation Act states "community hall" means a hall or similar building, other than the premises of a club for the time being registered under the Registration of Clubs (Ireland) Act 1904 which is not used primarily for profit and gain, and is occupied by a person who ordinarily uses it, or ordinarily permits it to be used, for purposes which involve participation by inhabitants of the locality generally and which are recreational or otherwise of a social nature. The simple change put forward in the Bill to change the interpretation involves the insertion of just one word. This change would allow clubs to seek a review from the Valuation Office to have the non-licensed section of their premises derated. The changed definition would state "community hall" means a hall or similar building, other than the licensed premises of a club for the time being registered under the Registration of Clubs (Ireland) Act 1904. This minor amendment to the Act would make a major difference to the finances of ordinary clubs run by volunteers the length and breadth of Ireland.

I wish to clarify an additional point about the Bill in case Deputies have concerns. The legislation is not about supporting bars; it is about supporting volunteer sports clubs struggling to make ends meet. Fianna Fáil is fully committed to fighting the disastrous consequences alcohol abuse has wrought on society. We support minimum alcohol pricing and taxing off-licence sales to discourage binge drinking and ensure people consume alcohol in a controlled environment. This is an integral part of an holistic strategy to combat alcohol abuse. Supporting local clubs which provide an active social outlet for all ages and which raise funds are an important part of enabling alcohol to be consumed in a safe, controlled and responsible environment. These clubs should not be punished for developing a vibrant local organisation with a strong sporting infrastructure.

The Bill is about supporting voluntary organisations which play a vital role in our community and which are being hit with an unfair tax. Rates will still be paid on the licensed premises section of the facility. This will not leave other licensed premises at a competitive disadvantage. It will help ensure alcohol is consumed in a controlled fashion and not contribute to the dangerous binge drinking we have witnessed in recent years which is scarring younger generations.

I hope the Government appreciates the role that sports clubs play in our communities. We can take pride in the volunteer ethos that has built up small fledgling teams into strong active hubs for an entire area, with ordinary men and women coming together for common purpose and transforming their towns and villages and specific parts of our large cities and urban centres.

These clubs form the fabric of Irish community life. However, the existing commercial rates system unfairly penalises clubs that have worked hard to set up facilities for all their members. The Bill proposes to help ease the burden on these clubs. It is a small part of the finances raised by local authorities through commercial rates but a major part of the outgoings of many of these clubs. This small change to the law will make a vast difference to them.

I hope the Government will take this small but constructive step for clubs across the country. The Government can either accept the Bill and the amendments it proposes to previous Acts or it may wish to insert the provisions contained in the Bill in the Valuation (Amendment) No. 2 Bill which is going through the Seanad at present. That would be commendable on the Government's part and would reflect many of the comments that have come to me from many Members opposite who also feel this amendment is necessary in order to alleviate the great strain that has been placed on many clubs which have developed their facilities and services to their members over recent years and which form a vibrant part of the fabric of local communities.

It is also very evident in large urban centres. I have visited many clubs in Dublin and throughout the country which find themselves in a bind in this regard. Many of them have had to close facilities and not offer those services to their members, and are not able to generate the revenue to warrant the sort of investment they are making in facilities for the youth and even beyond. In many city clubs, including Parnell's GAA Club here in Dublin, I have witnessed considerable co-operation with local community centres and organisations whereby they share many of their facilities for use by the elderly, for example. Any measure that helps to alleviate the strains on those clubs in order to provide such extra facilities and services would be a positive step. It would be a recognition on the part of the Government of the anomaly in the present system. I look forward to the Government accepting the Bill or at least giving a commitment to amend the Bill that is before the Seanad.

11:10 am

Photo of Paul KehoePaul Kehoe (Minister of State and Government Chief Whip, Department of An Taoiseach; Minister of State, Department of Defence; Wexford, Fine Gael)
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I thank the Deputy for introducing this Private Members' Bill, which proposes a solution to a recurring issue on the valuation of club premises where the club is a registered club under the Registration of Clubs (Ireland) Act 1904 and allowed to sell alcoholic beverages. This issue mainly relates to sports clubs. Like the Deputy, I recognise the work sports clubs do throughout the community and the important contribution they make.

A number of categories of properties are exempted from rates by Schedule 4 of the Valuation Act 2001. These include educational and health-care institutions that are not operated for profit, art galleries, museums and property used by charitable organisations for charitable purposes. All land developed for sport is exempted from rates. This would include the outdoor surfaces of the playing pitches, tennis courts, golf courses etc., but not the club's buildings and structures. Also exempted is any building used exclusively as a community hall.

A community hall is defined in the Act and means a hall or similar building which is not used primarily for profit or gain and is ordinarily used for recreational or social purposes involving participation by inhabitants of the general locality. The definition of a community hall specifically excludes the premises of a club that is registered under the Registration of Clubs (Ireland) Act 1904. Registration of a club under this Act allows the club to sell alcoholic beverages.

I am sympathetic to the intent of the Bill regarding its attempt to address the needs of small, local, voluntary, community sports clubs and will not oppose it at this stage. It appears unfair that it is not just, the bar, function room or kitchen area of a sports club, that is valued for rates purposes, but also the non-commercial buildings and structures, including changing rooms, meeting rooms and gyms. If the club had no bar area it might have no rates liability, so the inclusion of a bar brings everything except the outdoor playing surface into the rates net. Valuing changing facilities or other ancillary buildings that are far removed from the bar could be seen as unfair and resulting in a higher rates bill than might be the case if the valuation were restricted to the bar area.

The argument is that this higher rates bill puts an undue burden on many sports clubs that are working on small budgets to promote sports and leisure for the benefit of their local community. I am also aware that there are clubs with premises in more than one location. Where these clubs are registered they might in practice only operate a bar in one of their locations but the buildings in all of their locations are valued for rates purposes.

There are, however, many problems with the proposed Bill. There are technical, practical and competition issues that need to be addressed which I will expand on here. I would like the Joint Committee on Finance, Public Expenditure and Reform to take submissions on these issues and consider them on Committee Stage. The Bill as proposed will not achieve what the Deputy intends. There may be unintended consequences for clubs that do not have a bar facility and there are competition issues to consider.

I wish to address a technical issue that makes the Bill unworkable in its current state. The proposed amendment in the Bill to the definition of a community hall is very minor. It is just the addition of one word "licensed" before "premises" and on the surface it might seem to solve the problem. It appears to keep clubs with a bar within the rates system, but restricts the valuation for rates purposes to that part of the club's premises that are used for the bar.

There are, however, a number of reasons this amendment is unworkable. First, clubs are not licensed, but are registered. It is their registration under the Registration of Clubs (Ireland) Act 1904 that allows them to have a bar in their facility. While this may seem to be a very technical point, changing the word to be included in the definition from "licensed" to "registered" will not improve the proposal. When a club is registered it is registered as an entity. It is the club in its entirety that is registered rather than different locations or parts of the club. When a club is registered under the 1904 Act, there is no delineation of what is the bar area or areas where alcohol can be sold. There are no maps or plans that the Valuation Office could use that describe the area or limits of the bar. Even where a club has premises in one location it is not possible to say that one set of premises is registered and another set is not registered.

If the word "registered" was used and the Bill was enacted, all the club's premises would be excluded from the definition of "community hall" and registered clubs would be in exactly the same position as they are now. If an exemption from valuation were granted on the physical description of the bar part of clubhouse premises how could this distinction be made and sustained in a way that would not be open to possible abuse by seeking to narrowly define the bar or that would blur the lines between truly community-based sports club facilities and those of professional sports clubs and commercial stadiums and other commercial entities.

Local government funding is dependent on having a sustainable and fair valuation and rating system. Any widening of the definition of exempted premises, no matter how well motivated, that might lead to others which could afford to pay commercial rates being exempted or partially exempted, would be unfair to genuine community-based clubs and ratepayers generally, and unsustainable as regards local government funding.

I also want to ensure that our current treatment of sports clubs from a rateability point of view is not endangered in any attempt to improve it a little further. The existing definition, as interpreted by the Valuation Office, allows many sports clubs, local GAA clubs, etc., to be exempted completely from rates. As their facilities are often made available for use by people in their locality for social and recreational purposes, the premises of these clubs are deemed to fit within the definition of a community hall. The current definition therefore works for many sports clubs that do not have a bar. This contrasts with, for example, the situation in Northern Ireland where the entire club facility, whether licensed or not, is rateable including the outdoor playing surfaces.

The purely sporting parts of the facility can get an 80% reduction. This regime would not be welcomed by those clubs that do not have a bar facility. It is important for the sports clubs that enjoy the current exemption that nothing be done that could jeopardise their position. Were the amendment proposed technically feasible, it would make a mockery of the definition of "community hall" as what Members would be trying to exempt as community halls would be the ancillary club facilities, the changing rooms etc. Where might this leave those clubs that benefit from the interpretation, were its general use challenged? I would not wish to see endangered the current interpretation, as it is working for the benefit of many sports clubs.

It is worth noting again that the land developed for sport such as playing pitches, tennis courts and golf courses is exempt from valuation regardless of whether the club is registered. I also understand the manner in which clubs are valued for rates purposes differs from the valuation of licensed premises. This is based partly on the Registration of Clubs (Ireland) Act, which is more restrictive on who can be served alcohol. While I am not an expert on valuation, were sports clubs with a bar to be valued in the same way as licensed premises, many then would have a much higher valuation, regardless of whether the non-commercial premises were included in the valuation. Very few clubs pay more in rates than the bars in their own locality. The regime that currently is in place favours sports clubs as a rule. It recognises that voluntary community-based sports clubs, with or without a bar facility, seek to promote and fund social activity on a not-for-profit basis for their members. It strikes a balance between the needs of community sports clubs and those of commercial sporting facilities and licensed commercial premises, while contributing to a sustainable source of funding for local authorities that must provide essential local services. Any effort made to improve that position must be considered carefully to ensure it does not have the opposite effect to that intended. Each club must consider its rates bill from a commercial standpoint. If a club has a bar, it is aware the bar will not be exempted, as this would clearly be inequitable to licenceholders operating public houses and to other parts of the hospitality sector. If the business the club transacts in its bar is limited, it may not be worth maintaining a bar when all costs, including rates, are taken into account. If it reaches this conclusion it can choose not to renew its registration under the Registration of Clubs (Ireland) Act and seek to qualify for an exemption under the definition of a community hall.

The third issue I wish to have addressed on Committee Stage is the impact any change will have on licensed competitors. The exclusion of clubs that have a bar from the definition of a community hall makes sense, as many clubs run their bar and function facilities in as professional a manner as licensed pubs or hotels. It would not be fair to licenceholders were these clubs fully exempted from rates. I note the Private Members' Bill is not proposing that clubs with a bar should get a complete exemption from rates. I believe the Deputy appreciates that his amendment sits in a middle ground between equity with the licensed trade on the one side and the position of clubs without a bar that are completely exempt on the other. He is trying to improve marginally the position of those clubs with a bar without upsetting the position of commercial licenceholders. This is a difficult task that is complicated by the other legislation in this area. The licensed trade should be given an opportunity to make its position known to the aforementioned committee on any proposed changes.

The argument will be and has been made that the Government should be supporting sports clubs and not penalising them by imposing commercial rates. However, the Government provides significant support for sport locally and nationally. Using rates exemptions to support any category of organisation is neither transparent nor targeted and better policy interventions are available and used to support sport. As outlined above, the Valuation Act 2001 provides a range of exemptions for sport including the exemption of land developed for sport and the exemption that is there for clubs that do not have a bar. The exemptions that are provided for currently are close to what is desired under the current licensing and club registration laws but I am interested in ascertaining whether alternative workable and sustainable solutions can be brought forward on Committee Stage that would respect the benefits of the current regime and the licensed trade with which many clubs compete.

In conclusion, I wish to inform Members that the Valuation Amendment (No. 2) Bill 2012 will return on Committee Stage to the Seanad shortly, probably after rather than before the summer break. The Committee Stage amendments have been drafted and at present, there are no proposed Committee Stage changes to the definition of "community hall" in the Bill for the reasons outlined earlier.

11:20 am

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael)
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While I thank Deputy Cowen for introducing this Bill, the irony is not lost on Members that this is something that should have been included as part of the 2001 Act and that the current position has existed for 14 years.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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I was not here 14 years ago.

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael)
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Nevertheless, I thank the Deputy for bringing it forward. I also thank my home town club of Ratoath for mounting its campaign a number of weeks ago, together with my county board. They obviously are passionate about the GAA, sport and its development, as well as the integral role it plays in communities. Arising from my husband's involvement in my own GAA club, I am aware of the countless hours and the commitment that are involved, as well as the hard work involved in fund-raising to keep alive those clubs. This is not limited to GAA clubs because this Bill obviously affects other clubs, such as the rugby club located in the village up the road from me. Money is hard earned and is spent extremely well by an entirely voluntary organisation for the betterment of communities. The position of my club is that the current valuation system charges rates on its dressing rooms, its gym and what I will loosely call an indoor pitch, that is, an indoor area the club has upstairs above its commercial space. It is an area the kids use when it is raining and that the more senior members, by which I am talking about the old farts like my husband and his pals, use on Saturday or Wednesday nights to have a kick around. The club is charged commercial rates for that area, which is wrong. While I understand there are various technical issues associated with the Bill, the intention of Deputy Cowen, everybody else who is speaking today and all those who have been supporting their own clubs throughout the country, is that the current situation is wrong. It is unfair and must be changed and while there may be technical difficulties, there are very clever people within Fine Gael and I am quite sure we can get around them.

I urge the Minister of State to make use of the opportunity afforded by the Valuation Amendment (No. 2) Bill 2012 that is before the Seanad at present. I agree with Deputy Cowen that Members should not get bogged down in parking this Bill or in discussing the technical issues pertaining to it. Members should make use of their opportunity with regard to amendments to the current Valuation Amendment (No. 2) Bill 2012 and should find a resolution to this issue. Long before I ever arrived in this House, Members of my party were raising this issue with the then Fianna Fáil Minister. The matter either was ignored or perhaps the technical issues were so difficult that it could not be fixed. However, the time now is right as Members all are in agreement that the current position is unfair and unjust. People, who are all volunteers who are trying to drive the development of sport, as well as a bit of crack in and the development of communities, should not be penalised. I genuinely ask the Minister of State to find a way to get around this issue through amendments to the current Valuation Amendment (No. 2) Bill 2012. The Government, its predecessor and its successors undoubtedly are, were and will be supportive of sporting facilities and their development throughout the country. Only yesterday, the Government handed out €40 million of taxpayers' funds back to those taxpayers for the development of more than 800 projects throughout the country. All Members recognise the really good work that is being done by volunteers nationwide. They all recognise that the current situation is wrong and must be changed and they all recognise that the will exists to do it. Therefore, let us please do so this year.

Photo of Jerry ButtimerJerry Buttimer (Cork South Central, Fine Gael)
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First, I commend Deputy Cowen on introducing the Bill in the House. The Deputy may not believe it but I wish to support him in this regard. I do so as a former GAA club chairman of six years' standing and as a current member of a club that has a bar and a licensed premises and Deputy Cowen is correct.

My local club is paying an unfair price for having a bar area and the unfair rate it pays is causing great angst among its members. Sports club complexes, irrespective of which organisation is involved, generally feature dressing rooms, a sports hall, a meeting room and a function room. The facilities are frequently used by residents' associations, senior citizens, bridge clubs and other groups. Sports clubs do not operate to make money but because sporting organisations of all codes, whether soccer, rugby or GAA, are the heartbeat and core of communities. It is, therefore, unfair to impose a higher commercial rate on them.

I recall my local club treasurer, Jim Collins, bringing the annual bill from Cork City Council to executive committee meetings, which were held on Monday nights, and asking what could be done. The current approach penalises clubs because it creates and unfair burden and requires them to transfer to local authorities some of the funds they raise.

The technical difficulties the Minister of State outlined can be overcome on Committee Stage. I hope a way will be found to support clubs because their purpose is not to compete with local bars, hotels or restaurants but to raise revenue for club development and upgrading facilities. I accept, however, that the scale of activities may differ between clubs. My local GAA club in Bishopstown has a licensed premises on the complex and uses funds to provide state-of-the-art playing fields, all-weather pitches, astro-turf pitches, dressing rooms, a gym for club use and an indoor sports hall for club members. We do not seek to make vast profits from the premises for use elsewhere but to raise money for ongoing coaching and games development. We want to win a county championship and ensure the club makes progress. Sports clubs must generate revenue to maximise their potential and all such revenue remains within the club. Their ethos is one of pride, immersion in the community and promoting a sense of unity that binds together a parish or community, whether urban or rural.

Many club bars do not make substantial profits. Since the recession started, many people have stopped consuming alcohol mid-week and only go out once at the weekend. Many will not even visit the bar of their local sports club. While I do not propose to reveal commercially sensitive information, many club bars do not make the profits their competitors believe they are making. The bar is a social focal point for club members and a means of raising funds.

Sports clubs with a bar on the premises also pay excise duty and tax and PRSI for staff. While those who argue that people who are involved in sport should not promote alcohol are correct in theory, an amateur organisation that is trying to win a county championship needs money for coaching and games development and the provision of gear in local schools. There are only so many draw tickets one can sell and fund-raising events one can hold. My club takes a responsible approach to the sale and use of alcohol on the premises and runs a very good shop.

The technical issues the Minister of State raised can be addressed. I share the hope expressed by Deputy Regina Doherty that the Bill will not be parked for 14 years. I was struck by comments made during a debate on a previous Valuation Bill in May 2001, during which the then Minister of State at the Department of Finance, Mr. Martin Cullen, stated the following:

I am satisfied that the definition of "community hall" in the Bill allows for the exemption from rates of a building comprising dressing rooms, changing rooms used in connection with a playing field... The same would apply to a community recreation facility. However, if the sporting or recreation complex is licensed, the entire property will be rateable. I consider that this should be the position. Consequently, I do not accept that the amendments are necessary.
I hope the Government will not do as the former Minister of State did and penalise sports clubs of all codes that raise money to fund their activities. These clubs do not pass on profits to a large entity but use them to develop the sport.

This legislation has been introduced at an opportune time given the current farce surrounding the Garth Brooks concerts at Croke Park. Cumann Lúthchleas Gael, the best sports organisation in the world, is raising money through Croke Park to fund the development of hurling and Gaelic football, the best games in the world. It is a pity that all those involved, specifically Dublin City Council, local residents and the GAA, are not engaging more. This episode highlights for all those involved in sport and politics the need for constant engagement and dialogue. I hope the matter can be resolved. The demand made by Garth Brooks for five concerts or nothing is wrong. If, as he says, Ireland is dear to his heart, he should not penalise all those who bought tickets for his concerts or the supporters of Cumann Lúthchleas Gael who will use some of the proceeds to fund games development. I hope the problem can be resolved and I am sure Páirc Uí Chaoimh in Cork, which is a great venue, will be available to host two of his concerts.

This is an important Bill which addresses issues such as community, fund-raising for clubs, the playing of our native games and the use by sports clubs of all the profits they make. As Deputy Barry Cowen noted, the Bill does not propose to exclude entire sports complexes from a liability to pay rates. The bar area will continue to be included but we must not penalise sports clubs. We must give those who promote sport at local level an incentive to continue doing so, rather than penalising them through high rate bills. Many clubs do not make the profits people believe they make.

11:30 am

Photo of Brian StanleyBrian Stanley (Laois-Offaly, Sinn Fein)
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I welcome the Bill and compliment Deputy Barry Cowen on introducing it in the House. Having listened to the Minister of State's comments on the technical difficulties and the nuances involved, I hope the Government will accept the legislation and allow it to proceed to the next Stage. A significant number of representations have been received from sports clubs, especially GAA clubs, requesting cross-party support for the Bill. Given the value of sports clubs and community organisations, this is a valid request.

As Deputy Regina Doherty noted, Ireland is fortunate to have so many people making a voluntary contribution to their communities. All of us will be able to identify people in our local areas, including family members, who do great work in voluntary organisations, including sports clubs.

Rates should only be paid on premises and parts of buildings that have a commercial purpose and generate profit. This is clearly not the case in respect of a large number of community halls and sports premises. The Bill provides for an exception where such premises also contain a bar selling alcohol. It is appropriate that parts of premises used as a bar be subject to rates given that bars generate profit, have a commercial purpose and compete with private bars which frequently have a liability for high commercial rates. We must remember, however, the onerous task facing clubs, including many clubs in County Laois. Trumra, for example, is an area with only 27 families.

Even larger clubs such as Portlaoise are obliged to shoulder a huge burden each year in the context of trying to raise funds. Their efforts in this regard include holding lotteries and there is an annual draw run by the county board. A percentage of the funding from the latter is allocated to local clubs. The fund-raising in question is onerous and is done on a weekly basis by volunteers. I lived in both England and Scotland and I am aware that there are no comparable organisations or similar voluntary efforts in those countries. I do not mean that in a negative but we are lucky that volunteers make an exceptional contribution in carrying out the work to which I refer, be it for the GAA or soccer clubs such as Portlaoise FC, whose grounds are located close to my home. The volunteers to whom I refer make a huge effort every day and night of the week.

I take this opportunity to recognise the contribution sports clubs and community organisations make to society. Implementing the legislative changes proposed in the Bill would be a practical recognition to that contribution. The changes in question would go some way towards redressing the effect of the cuts in funding that have been implemented across the community sector. Those cuts have obliged many sporting and community organisations to severely curtail their activities. In addition, the collapse in people's incomes must be taken into consideration. Many individuals are earning a third or a half of what they earned seven or eight years ago. This means that they cannot buy a €100 ticket for an annual draw as they did in the past. This has added to the impact of the cuts made in respect of the community sector. I acknowledge yesterday's allocation of sports capital grants by the Minister of State at the Department of Transport, Tourism and Sport, Deputy Ring. At first glance, I can see that he looked after a number of clubs and organisations in my county that were in need of funding. It appears the Minister of State and his officials seemed to take into consideration those clubs which were badly in need of funding and a hand-up rather than a handout.

The cuts resulting from the economic downturn have had a detrimental impact on young people in particular. On Tuesday evening last, I made a contribution to my party's Private Members' Bill relating to mental health and suicide. The rate of suicide among young people is alarming. This is a major issue in rural areas and also in some urban working class ones. Ireland has the highest rate of suicide rate among young men in the EU. I wish to highlight the importance of sports clubs in countering suicide and providing young people with both a focus, a connection to their communities and an opportunity to socialise. Numerous studies have illustrated the beneficial impact of participation in sporting and other activities in the context of social adjustment and mental well-being, especially in the case of young people. The Bill does not seek to address this matter. By easing the financial burden imposed, via rates, on community and sporting organisations' premises, however, it would allow the organisations in question to continue to provide services and facilities and to expand their operations in order that more members of communities might be included.

Radical changes in respect of the funding of local organisations and community development groups are to be introduced in January. Those organisations and groups have created a great deal of employment and provided many services over the years. The changes the Minister for the Environment, Community and Local Government, Deputy Hogan, proposes to introduce under the so-called realignment will completely alter existing structures and also the way in which the organisations and groups to which I refer operate. Some of them may even be forced to cease operations. This is particularly ironic in view of the fact that the European Court of Auditors identified Ireland's way of funding the entities in question through Leader and other programmes as being the best model.

There are other issues relating to rates and many people have highlighted the excessive burden they impose on struggling businesses. Something of a catch-22 situation exists in this regard. High rates can force people out of business and when this happens, the income and rate bases of local authorities shrink. Local authorities need the money they get from rates. The matter of legacy rates also arises. I refer to a situation where one business closes down and vacates a premises and where that which replaces it is obliged to pay the same rates. Perhaps the Minister of State's officials might take note of the fact that this issue must be addressed. New businesses which move into premises previously occupied by other concerns must pay the same rates and no account is taken of their potential profitability. This makes little sense. There is a small window of opportunity in this regard in the context of the new local government legislation, which contains a provision whereby elected council members can make alterations, if they so wish, to try to ease the burden on businesses in their municipal districts. The Department must make local authorities aware of this provision by means of a circular. I previously served as a councillor and I am aware that circulars are always issued to management but that they do not always find their way to local authority members. Councillors might only become aware of the existence of particular circulars when they attend local authority meetings. It is important that the power to make alterations be made known to local authority members.

In the context of the Bill before us, the issue of profitability must be taken into consideration. Imposing rates in respect of the total area of the property of GAA and other clubs does not make any sense and is unfair. Those properties are often used for bingo and other recreational activities, community meetings, etc. It is important that we should differentiate in this regard. I recognise that it will be difficult to find a way to deal with this matter and I accept that there are technical difficulties involved. If, however, the Government has the will, then a way will be found. Anyone can state that previous Administrations did not take action in respect of this issue but today we are all calling for it to be addressed. We are also calling for local clubs with bars on their premises to be given fair treatment and only charged for the areas on their properties that are being used for commercial purposes. We need to relieve the pressure under which such clubs are operating.

I support this very positive Bill put forward by the Fianna Fáil Deputies. I hope the Government will allow it to proceed to Committee Stage.

11:40 am

Photo of Thomas PringleThomas Pringle (Donegal South West, Independent)
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I welcome the opportunity to contribute to the debate on Valuation Bill 2014 and I commend Deputy Cowen on bringing it forward. As previous speakers indicated, the Bill is designed to amend the Valuation Act 2001 in order that only the licensed premises portion of sporting clubs' properties will be valued for rates purposes.

The work done by sports clubs throughout the country is well documented, as is their importance and value to local communities. The operation of a bar on the premises of a sports club is not always with the purpose of generating profit for profits sake. Rather, it is to generate funds in order to allow such clubs to continue their work in respect of under-age teams and to buy sports equipment and to ease the burden on local communities with regard to maintaining such clubs. This is an important aspect which must be recognised.

It is interesting that so many barriers are being placed in front of this Bill, which is seeking to achieve something quite simple. Reference was made to technical difficulties and unintended consequences. I wonder whether there is a real will to deal with this issue and amend the Valuation Act in order to allow the Bill to achieve its purpose. While the Government has indicated it is accepting the Bill, I am obliged to ask how long it will be before it proceeds to Committee Stage and whether the Department will actually facilitate the latter taking place in order that the issues we are highlighting might be teased out and possibly addressed. It will be interesting to see how long we will be obliged to wait for Committee Stage and how the Government will deal with the issues that have been identified and offer solutions in respect of them.

I wish to comment on the Valuation Act in general terms.

While there may be many difficulties as has been outlined by the Minister as to how licensed premises are valued in clubhouses, local authorities should be given a greater role in how valuations are administered. This could be teased out for sporting clubs, as a way of recognising the contribution they make to their counties. Local authorities could be provided with a legal mechanism whereby they would not have to collect the full valuation rates from the clubs. This might be a way of overcoming the technical issues as outlined earlier by the Minister of State. He stated the exemption system which operates in the Six Counties would not be welcomed here but my suggestion could provide a way to overcome these technical and legal difficulties for the Valuation Office.

Once a building is valued, the local authority is legally obliged to collect the amount of the valuation. There is no legal mechanism to allow it to waive any portion of it. Even if a business is in difficulty and cannot afford to pay the full amount, it still accrues as a debt against the business. On a wider basis, local authorities should be able to stimulate business activity in their areas by being allowed to reduce the amounts they can collect while the valuations would not change for businesses that are having difficulties. It would also enable local authorities to improve their enticements in getting new businesses to open up in their areas.

I support this Bill. I hope it does not languish on Committee Stage, however, and runs out of time as the Government’s tenure comes to an end. The technical difficulties can be dealt with and teased out on Committee Stage if there is a will within the Department to make that happen.

11:50 am

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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I am glad to contribute to this Bill and thank Deputy Cowen for bringing it forward. As a lifelong member of the GAA and a former secretary of my local GAA club, I know this issue has raised its head over many years. Even though my club did not have a bar, negotiations on rates could be problematic. Whether it is GAA, soccer or rugby clubs, they provide a wonderful spirit and service to our communities. Last weekend, I was reminded of the sense of volunteerism at the Connacht GAA Centre of Excellence where the all-Ireland féiles were being held with thousands of children and their parents from all over the country participating. It was inspirational. Last night, I was reminded of it again, when I was out in Whitehall Colmcille GAA Club where a lifelong Leitrim and Drumkeerin fan, Sean Flynn, was honoured, a fan who never missed a match for the past 40 years. Two busloads from Drumkeerin attended the event which was full of a sense of community, unity of purpose and a sense of family. This is the essence and thrust of this Bill.

Last October, along with some of my colleagues, I raised the issue of the fivefold increase in the rates being sought from Croke Park and the Aviva Stadium. My main point on that occasion was the threat of a knock-on effect for other club premises across the country which might not be able to meet a similar demand. Obviously rates need to be paid. If a club has a bar, it cannot have an unfair advantage over other licensed premises in its area. However, rates need to be fair and commiserate. I would hope the problem can be solved by consensus.

Deputy Buttimer already raised the issue of the danger that all of the five proposed Garth Brooks concerts will be cancelled. As someone who has been going to Croke Park for 40 years, I have had some of the happiest days of my life, as well as a few sad ones, there. I was even there the day Séamus Darby scored the famous goal against Kerry in the 1982 All-Ireland football final. I appeal that some solution be found to allow for the five concerts to go ahead in Croke Park. I am not taking any sides on this or the side of the GAA. I would acknowledge looking in from outside that mistakes have been made on all sides in this but I would hope these concerts would go ahead even if it meant there would be no concerts next year or for a couple of years. At the function I was at last night, I met a couple whose son and wife are coming home from Australia soon. As a surprise, this couple have tickets for one of the concerts for their son and daughter-in-law. I am not concerned about the GAA on this but the 70,000 tickets sold outside of the country, the hit the country will take because of the decision on the concerts, as well as the disappointment and chaos it will cause. If there is a willingness to find a solution, the concerts should go ahead. I am speaking also as someone who had an aunt living beside Croke Park for 40 years. She always looked forward to the country cousins coming up on big match days. I have had cups of tea in houses on the way down Jones' Road and the banter is magnificent. I even have tickets for the Garth Brooks concert myself, even though I am not a music buff in any sense. I am prepared to put my money that there will be no trouble.

Photo of Anthony LawlorAnthony Lawlor (Kildare North, Fine Gael)
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What about Punchestown?

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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It would be crucial to find a solution to this problem. In an era when there are more divides, there should be a little more consensus to solve the rates issues raised in this Bill and the issue around the Garth Brooks concerts at the end of July.

Photo of John BrowneJohn Browne (Wexford, Fianna Fail)
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I welcome and support this long overdue legislation. We all value the importance of GAA, rugby, golf and other clubs across the country that provide a worthwhile service to their communities.

The existing commercial rates system unfairly penalises clubs that have a licensed premises by charging rates on the entire complex rather than just on the bar area. I am involved with a club in Enniscorthy that pays rates of approximately €15,000 per year and I am told that in other parts of the country rates can be up to €40,000 for sporting clubs that have a bar licence. This creates a very unfair burden on clubs that are trying to provide facilities. During the boom, builders and developers used to pour huge amounts of sponsorship money into GAA clubs in particular and that has dried up. Clubs are running revenue raising initiatives such as lotteries and bingo to survive.

The Minister mentioned technical difficulties. Having been in a few Departments when we were in government, I know officials always raise technical difficulties. However, the Attorney General and senior officials in the Department are well able to overcome the technical difficulties, including those the Minister outlined in his speech, and provide a solution to the issue. Deputy Cowen has called for an amendment to the Valuation (Amendment) (No. 2) Bill 2012, which is before the Seanad. That is the most appropriate place to deal with this in an urgent manner. The Minister said the Bill will come before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform. How long will it remain before the committee before a decision is taken? Clubs cannot wait much longer.

The club with which I have been involved, and of which I have been chairperson at different times over the years, provides a facility for 30 teams from under sixes to seniors, including women playing camogie and ladies' football. The club is at the heart of the community and hosts other organisations such as clubs for bridge, senior citizens, art, music, men's sheds and the Delightful Dollies women's club, free of charge. It is becoming more and more expensive to run such a club, and it is unfair that the rates are based on the entire area rather than just the bar and lounge area. We are not seeking unfair competition with other pubs but requesting a fair and equitable system and for clubs not to have to pay huge amounts of money to local authorities every year in rates.

I ask the Minister and the Government to accept the Bill and move it on to the next Stage. There is nothing sinister or underhanded in the Bill. It is a response to GAA and other clubs throughout the country, which have been seeking to have it changed for many years. As some Deputies have pointed out, it probably should have happened when we were in government. It did not, and we are where we are. With the Valuation (Amendment) (No. 2) Bill before the Seanad, there is an opportunity to make the amendment to implement the change for which Deputy Cowen has called. If this happens, it will be fully supported by all sides of the House. More importantly, it will enable struggling clubs to pay their rates and survive into the future. Although my local club pays its rates on a monthly basis, which the local authority is accepting, the rates are a major burden on clubs. The Bill is worthwhile and the Government should accept it, move on to the next Stage, get around the technical difficulties, and have it included in the Valuation (Amendment) (No. 2) Bill that is before the Seanad.

12:00 pm

Photo of Helen McEnteeHelen McEntee (Meath East, Fine Gael)
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I welcome the opportunity to speak on the Bill, and I thank Deputy Cowen for bringing it forward. It has been needed for some time. While there are technical issues, which the Minister addressed, I agree with the objective of the Bill. Sports clubs with bar facilities should be liable for rates only on the part of the premises that has the licence to sell alcoholic beverages. For sports clubs to pay rates on the entire premises, including changing rooms, showers, kitchens, meeting rooms or indoor sports halls, is ridiculous. I recently met the Meath County Board of the GAA and a number of representative of local clubs, and it was brought to my attention that rates are also charged on signs. There is not much point in a company contributing to a club in this way it if is going to be charged rates on it.

A number of years ago I was told a particular club in Meath paid rates of over €20,000. At the time, I assumed it was just that particular club and I did not realise it was an issue throughout the county. Only recently has it come to my attention that at least ten clubs in Meath are in arrears. While it has been an problem for some time, it is only coming to the forefront now because of the economic downturn. The clubs are run on a voluntary basis and make their money through fund-raising. While we in Ireland are all very generous and still give something when we have nothing, when one has nothing to give, it is very hard to give. Fund-raising is not bringing in as much money as previously, and that is why the problem is becoming apparent now.

The issue was brought before a Fianna Fáil Minister in 2001 and was rejected. Had it been dealt with then, clubs could have saved 13 years of rates. For our club in Meath, paying over €20,000 in each of those 13 years, that is a hell of a lot of money. Clubs are in tens of thousands of euro of debt because of it. Nobody wants to go to court, and we need to resolve the issue as soon as possible. While some people would prefer if clubs paid no rates, we must consider the fact that some clubs run their bars on a commercial basis while others open them only when there is a match or an event on. We must be careful not to create discrimination, for example, in a situation where a club is in a village or next to a local pub which pays rates.

It is extremely unfair to impose this burden on clubs, where people work on a voluntary basis, to pay rates on premises that are clearly sports facilities. Local sports clubs are always the life and soul of a community. I grew up in an extremely dedicated GAA family. We went to all the matches; my father trained football teams, my uncles played, and all my cousins play. From an early age I saw the dedication on the part of not just the players, but the committees and volunteers who work around them. An entire community is involved in the GAA and other sporting facilities. Athletics, tennis and other clubs are appearing, and they should also benefit from this. Nobody wants them to disappear.

The cost to implement the Bill would be small in comparison to other issues. While I am happy we are allowing the Bill to pass today, notwithstanding the technical issues I do not want it to be passed and then for nothing to happen for a long time. It must be addressed now and I urge the Minister to see that it is implemented as soon as possible or included by way of amendment to the Valuation (Amendment) (No. 2) Bill that is with the Department and will, hopefully, come before the Seanad shortly.

Photo of Anthony LawlorAnthony Lawlor (Kildare North, Fine Gael)
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I thank Deputy Cowen for bringing forward the issue, which many of us have been fighting at local level through our clubs. When I was secretary of my local rugby club, this issue arose continually. Other speakers have highlighted the fact that club members work voluntarily to pay a tax on their premises. A brother of mine runs a pub. The nature of the two businesses must be classified properly. While I support the thrust of the Bill, each case, and each clubhouse, is individual. In some clubhouses, the whole area is used as a function area, while in others the area includes dressing rooms, showers and an indoor training area.

It is difficult to put legislation or regulation in place for such cases, although I have some suggestions in that regard.

It is sad that in 2001, as Deputy McEntee noted, there was an opportunity for us to deal with the issue and Deputy Cowen's party failed to do that. I welcome his bringing forward the Bill today as a number of us have raised similar issues concerning the rates for Croke Park and the Aviva stadium, as well as the clubs in our communities. I would like to see a direction from the Department of the Environment, Community and Local Government about local issues, and perhaps the best way to deal with the matter is locally. County managers can make decisions about how to collect rates on various premises, for example. In my county when Intel was refurbishing its building, there was a derogation on rates. Some places have rates applied when they are occupied but when they are unoccupied, there is no charge, and such an arrangement is allowable within the local remit. Perhaps something could be done for club premises with a bar facility and a large function area that has multiple purposes, such as use for indoor bowls or training children. When the function area is used commercially, a specific licence could be purchased instead of rates being paid all the time. At least in that case, the commercial premises down the road, whether it is a pub or hotel, could see fairness in an application. When the club is using a facility for a sporting or community project, there would be no charge, but when it is used for a commercial purpose, some licence fee would be paid.

I implore all clubs to actively engage with local county managers so as to formulate some type of solution. If a clubhouse just has a bar and the premises for training, togging out and showering are in a different building, rates should be applied appropriately. If clubs engage with local county managers, a solution can be reached. I support the thrust of the Bill but I would find it very difficult to put something into legislation that could cover all issues on the ground. Perhaps local council members could have much more input into how this could be done, and it can be difficult for us as the national Parliament to legislate in a way that covers all aspects.

There is an ongoing matter concerning Croke Park and the Garth Brooks concerts. I have two tickets for one of the days for which no licence was granted. Punchestown is an exceptional venue that would be available to host all five concerts, should Mr. Brooks decide to pull out of Croke Park. It is wrong that a person can purchase a ticket for an event subject to a licence. Many people have planned holidays, flights and hotel accommodation, so if an event is planned, it should be fully licensed before tickets go on sale.

12:10 pm

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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Thank you.

Photo of Anthony LawlorAnthony Lawlor (Kildare North, Fine Gael)
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In this case Croke Park had permission for three concerts per annum and it may have pushed the boundary a little.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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The Deputy is pushing a boundary a little as well. I sympathise with his plight but we are talking about a valuation Bill.

Photo of Anthony LawlorAnthony Lawlor (Kildare North, Fine Gael)
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I am trying to ensure I can use my two tickets. In Kildare we have a super venue that has hosted many concerts, including Witnness and Oxegen. Deputy Cowen probably attended some of them.

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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Was that where Fine Gael had its tent?

Photo of Anthony LawlorAnthony Lawlor (Kildare North, Fine Gael)
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I offer the venue for those five concerts if required.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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I call Deputy Durkan, who should speak to the Bill.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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My heart goes out to my poor colleague stuck with those two tickets. I am sure we would find many takers to relieve him of his burden and responsibility. I hope the issue works out well for all concerned.

Like other speakers I am generally supportive of the principle behind this Bill but the matter is not as easy to solve as it looks. It is far from easy because there are many issues that will emerge as time goes by. As we all know, every bar and pub in the country is under financial pressure. They are competing with a voluntary sector that is also under pressure, which leads to problems. We must also consider the constitutional aspect of any legislation. If it is perceived that legislation may disadvantage commercial premises through unfair competition, competition legislation and European law comes into play. The issue is not as simple as it looks.

I am very sympathetic to the various clubs throughout the country which are in financial difficulty and because they have a bar on the premises they find the entire premises rated commercially. Perhaps some concession could be given according to how community facilities are used by an organisation and comparison with total use throughout a year. The same logic can apply to privately owned commercial premises, as many such premises also provide a certain services for community events. In many cases, these are free. In the interest of fairness, it may be possible to examine the Valuation Act with a view to determining whether it is possible to amend the Act in order to meet the requirements of clubs and voluntary bodies throughout the country who provide a valuable community service, keeping community spirit alive. That is an important aspect in the climate we currently experience. The degree to which people are prepared to give of their time and energy freely is something we consider from time to time, and recognition should be given to those who make such efforts. We should also keep in mind the other kinds of relevant premises. Local hotels are also in the business of providing facilities to the community at a concessionary rate and sometimes free as well.

This matter is not simple, although I fully understand the motives behind Deputy Cowen's Bill. I know he means well but this is not an easy issue to resolve. No matter what is done, if we come down on the side of all the voluntary or community-based groups in the group, a fairly big slice will be taken from the revenue to local authorities. If all local or community groups are not included as beneficiaries under legislation, there is an element of unfairness. If we do as proposed in this Bill, there will also be concern from commercial entities such as hotels and bar owners who may feel under pressure because of the economic position which has prevailed over the past number of years. We must be fair to them as well.

There are a number of issues that must be brought into focus in considering this Bill and especially if it were accepted by this House. As I suggested, we must examine aspects of equality, competition and valuations under the appropriate Act.

There is the question of whether we can determine and define the full extent of voluntary contribution, as opposed to the purely commercial contribution made in all the circumstances likely to arise. I agree with the concept of this Bill but I do not know how it can be put into place because there is nothing easy about it. I hope that as a result of this discussion it might be possible for the Minister of State, in consultation with the Opposition, to come to some arrangement which would recognise, on the one hand, the commercial and, on the other, the voluntary and community sides of this situation.

12:20 pm

Photo of John Paul PhelanJohn Paul Phelan (Carlow-Kilkenny, Fine Gael)
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In all my time here I do not think I have seen Deputy Durkan finishing four and a half minutes before his allotted time is up.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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He is going for one of those tickets.

Photo of John Paul PhelanJohn Paul Phelan (Carlow-Kilkenny, Fine Gael)
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We should mark the occasion. I too support and echo Deputy Durkan’s sentiments on this Bill. I have been involved with the GAA all my life, albeit in a club that does not have a bar on its premises. There are many sporting clubs throughout the country, not only GAA clubs but all sorts of clubs, that have bar facilities which are open, at least some of the time, to the public. It is reasonable to ask that such clubs not be rated on the full extent of their premises. There are many aspects of those clubhouses that do not generate an income and it is unfair that rates apply to those aspects. This Bill seeks to change that rating.

Deputy Durkan is right to say that if the Bill is accepted as it is, it could have many knock-on effects, including on other commercial entities. In rural Ireland there are many villages and towns that do not have much in the way of community facilities and quite often the local public house or hotel is the de facto community centre. We do not want a change in legislation that would have a negative impact on such facilities. There must be a means by which the valuation legislation could be changed that would allow for a more realistic rating system for voluntary and sporting organisations.

I know the Minister of State at the Department of the Environment, Community and Local Government is not directly responsible for the licensing laws. I hold no torch for anybody in the licensed trade but I recognise that throughout the country public houses are important community facilities and that they are under severe pressure. We have a crazy licensing system under which public houses pay their licences based on turnover, whereas the large multiples pay flat rate fees for beer, spirits and wine, regardless of how much they sell. I said this to the previous Minister for Justice and Equality but have not yet spoken about it to the new Minister. If we want to do something useful to protect a crucial part of the fabric of Irish community life, the public house, we have to change the way the licensing laws operate to ensure a level playing field. I speak as one who does not frequent many public houses.

I broadly support Deputy Cowen’s proposal that there be some recognition of voluntary sporting and community organisations, part of whose buildings generate funds while the rest of the premises do not. A suitable mechanism should be found to change the valuation laws to ensure these groups are not penalised as they are now.

Photo of Brendan GriffinBrendan Griffin (Kerry South, Fine Gael)
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I welcome the opportunity to speak on this Bill and commend Deputy Cowen on bringing it forward. Its sentiments are very positive. We need to reward volunteerism and community involvement and should not put anything in the way of that activity. We need to tackle anything that would stand in the way of volunteerism and the work of community groups. If it cannot be done through this Bill, Government needs to make it a priority to try to find a way to get around the problems that exist. If all sides of the House could work together on it, that would be a positive step.

Since 2011 I have been calling for reform of rates valuations. The system of commercial rates calculation is archaic and needs to be updated. The idea of basing rates for a business on the rental value of a property stands in the way of enterprise and is a barrier to entrepreneurship. A business might need a large floor area, for example, where someone is fixing bicycles, and may pay a couple of thousand euro in rates per annum, even though it has small margins. Upstairs, however, there might be an IT company in a small office, which makes profits of more than €1 million per annum but pays a fraction of the commercial rate paid by the bicycle repair shop. We should consider profitability as distinct from turnover. Some people think rates should be paid on turnover but there is a huge difference between turnover and profitability. Many businesses have large turnovers but small margins. If that was changed, those who could afford to pay more would pay more. There would have to be a cap on the commercial rates a business would pay but that would be a fairer way to do business.

In recent years town centres have come under pressure and some are dying. Many commercial units in town centres are lying empty. A person considering starting a business would see that commercial rates would have to be paid no matter how the business performed. That could be the difference between breaking even and making a loss or between being able to survive or not. In most local authorities there is no flexibility, particularly if it involves an element of displacement. This contributes to the death of many town centres where units remain empty. We need to embrace and implement pro-enterprise policies that encourage people to start up and remain in business. There should be fairness at the heart of the system of commercial rate valuation, which is not there now.

I do not think the current system is something we should continue. We need to find a replacement system that is based on profitability. We should be cognisant of the requirement not to undermine the income base. I think a formula can be struck if the proper research and homework is done. I commend Deputy Cowen on this legislation. Surely a common-sense solution can be found in this area. If we do some research and tweak the Bill a little, we can make a meaningful difference to the clubs in every constituency that are affected by this problem. The Government needs to address this issue seriously to give these clubs the small bit of help they are looking for.

12:30 pm

Photo of Noel HarringtonNoel Harrington (Cork South West, Fine Gael)
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I welcome Deputy Cowen's Bill which results from the frustration of many people about the inflexible and hard regime that the existing rates legislation imposes on many voluntary organisations, clubs and social structures. During the more than 12 years I spent as a member of a local authority, not a week went by without a debate about how rates were being imposed and dealt with in each of the local areas. I do not think the experience has been different in any local authority in the country. I have a particular issue with the manner in which sports clubs are pitted against each other. Affluent clubs that are involved in commercial activity are able to steal a march on clubs that are not involved in such activity. In many towns and villages, clubs are competing against businesses that have to pay high rates and view the commercial side of GAA clubs and other sports clubs as a potential and reasonable threat. Many people are quite willing to go to clubs for different social events and thereby avoid going to commercial facilities that pay rates in villages and towns. It might be interesting to get the views of the head offices of large sporting organisations like the GAA, the FAI and the IRFU, which gave an interesting presentation to Members of the Oireachtas some time ago, on the imposition of rates on those organisation's larger structures. It is worth noting how they were dealt with under the rates revaluation process.

I would like any future legislation in this area to provide for all rates decisions to be referred back to local authorities. I suggest that this should happen as part of the restructuring of local government. I am not saying one sector or another should have an exemption from rates, as that is really not the way to go. There is a reasonable expectation that community groups and businesses will be treated equally, at national or local level, under the rates legislation. If the members of a local authority want to give some assistance to a particular group in the sporting or community sectors - I refer to a child care facility, for example - on the basis that it deserves some support, rather than giving the group an exemption by means of a behind-the-scenes arrangement under legislation, I would prefer if they were required to argue in favour of such a decision in public at a local authority meeting. If the members of the local authority had to debate the loss of revenue that might result from such a decision, or indeed the additional revenue that might accrue from it, we would have a far more open process. I feel much more strongly about this bigger issue. Fundamentally, I do not like the current system which allows the Valuation Office to dictate the rates infrastructure to businesses and local authorities. It would be far more transparent and democratic and for more predictable for businesses if each local authority had full decision-making powers regarding how rates are imposed. If such a system were in place, we could let the cards fall where they may.

Photo of Andrew DoyleAndrew Doyle (Wicklow, Fine Gael)
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A couple of things occurred to me as I was listening to the contributions of Deputies on this legislation while waiting for the debate on the Electoral (Amendment) (Hours of Polling) Bill 2013, in my name, to begin. Deputy Cowen's Bill, which is very welcome, has opened a discussion that we need to have. It raises fundamental issues with regard to valuation legislation and licensing legislation. It is said that there is more than one way to skin a cat. Maybe we should look at the licensing laws because, in most cases, the licences that apply to clubs are the same as the licences held by the owners of commercial premises whose incomes depend fully on their businesses. Such people have to pay staff and commercial rates, as everyone has said, whereas clubs generally have voluntary staff and shared overheads. To be fair, Martin Cullen raised a valid point when he tried to contend with this dilemma on behalf of a previous Government in 2001.

I appreciate the opportunity to speak on this Bill. The main point I want to make is that we should look at licensing laws in general. Perhaps an alternative type of limited licence should be given to not-for-profit groups that have facilities that are not designed to be in competition with local licensed premises. It could be like the system that prevailed when the courts were allowed to grant a limited number of pub licence extensions each year to facilitate late opening during festivals and other events. I suggest that an amendment could be made to the licensing laws rather than the valuation law to resolve this difficulty. Valuation law could be examined thereafter, when there would be no suggestion that licences granted to community sporting organisations could be used over time to allow them to compete with local commercial premises.

I am aware of some clubs that removed the bar licences they used to have in their clubhouses because they were losing money. This happened some years ago before the serious financial and economic downturn we experienced more recently. They had to give up their licences, even though they had voluntary staff, because their turnover was not justifying the extra costs on the premises. I am aware there are arrangements that allow local licensed premises to transfer their licences to clubs occasionally. I am arguing that we should put as much focus on licensing legislation as on valuation legislation. Deputy Cowen's Bill has started an interesting debate. I do not think there is a Member of the House who is unsympathetic to the rationale and the motives behind it. I think we should re-examine this matter. Perhaps the Joint Committee on Justice, Defence and Equality or the Joint Committee on Environment, Culture and the Gaeltacht or a combined sub-committee could do so. I thank Deputy Cowen again. I also thank the Acting Chairman for allowing me to speak.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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I thank Deputy Cowen again for bringing this Bill before the House. We have had a very useful debate with contributions from all sides. The agreement we have reached in principle is very welcome. An outcome like this shows it can be useful to have debates on these issues on a Friday. I look forward to the Committee Stage debate. Having attended many matches over the years, I am aware that the comfort of a bar in a community organisation like a GAA, rugby or soccer club can be very helpful, particularly on a cold Sunday afternoon after the voluntary activity outside has concluded. Many of these places cannot be described as commercial operations in any real sense because they are quite small and are only used during the game and shortly thereafter.

At the heart of this, what people want is to ensure there is no additional financial penalty imposed on a club because it provides the types of facilities we have discussed at certain times. There is an understanding that whatever goes on in these clubs does not compete with the full-time and entirely separate service delivered by a commercial operation. The issues that have been raised will be teased out on Committee Stage and, no doubt, a wise, sensible and fair result will be found. We look forward to that engagement. As the Minister of State, Deputy Paul Kehoe, outlined, we hope the difficulties will be teased out in a practical and realistic manner to ensure no unfair burden is placed on clubs in the voluntary sector, which we agree are not commercial operations in the true sense.

12:40 pm

Photo of Barry CowenBarry Cowen (Laois-Offaly, Fianna Fail)
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I acknowledge the Government's support for the thrust of the Bill and its willingness to let it go to Committee Stage for further discussion. However, that must be set against the statement by the Minister of State, Deputy Paul Kehoe, that based on the advice from his officials, what is contained in the Bill cannot be done. More accurately, of course, it will not be done. His contribution reminded me of some of the commentary I have heard from members of Government outside the House in recent weeks in response to the local and European elections. The problem, they tell us, is that their communications system is broken and their message is not getting across. I agree there is an issue with the Government's communications system, but it is really to do with its ability to receive the messages coming from the Opposition and some of its own backbenchers.

Were the Government to have more regard for those avenues of communication, there might be greater success awaiting it. Ministers should, for their own sake, be mindful of what they are being told. Issues arising from the so-called review and scoping exercise in regard to medical cards, for example, were flagged two years before a solution was proposed, and the warnings in that regard did not come only from this side of the House. The Ministers for Health and Finance should bear collective responsibility for initiating that exercise rather than fingers being pointed at one person in particular, who might well be made the fall guy next week. However, that is for another day.

I will now respond to the specific points made by the Minister of State, Deputy Kehoe, in his response. He said that because of the Registration of Clubs (Ireland) Act 1904, it would be very difficult to subdivide clubs in terms of the different activities taking place within their facilities. Where the premises is licensed to sell alcohol, for instance, he claimed there would have to be a mapping exercise, limits would supply and so forth. In fact, all of that is catered for in the licensing legislation, which is under the aegis of the Department of Justice and Equality and applies where an application is made to the courts for a licence or renewal of a licence.

It comes down to the question of whether or not there is a willingness and commitment on the part of those with responsibility to amend existing legislation based on evolving circumstances in our communities. The Government either wants to do make those changes or it does not. Ministers either want to instruct their officials or they do not. They either want to take heed of representations from fellow Members on behalf of constituents or they do not. As I often say, we in this House have the privilege of exercising the rights of citizens on their behalf. To hide behind legislation is just not acceptable. Deputy Bernard Durkan, in what Deputy John Paul Phelan observed was an uncharacteristically limited contribution, said that we must come to some sort of solution while being careful not to offend such and such a group. In fact, it is up to Government to take its responsibilities at face value, either enact amendments or not and suffer or enjoy the consequences thereafter. Deputy Anthony Lawlor spoke about how there must be local solutions and advised that clubs and organisations should sit down with county managers to reach an agreement based on local knowledge and whatnot. He emphasised, however, that legislation cannot be amended. That is gobbledegook. A county manager or whomever is charged with responsibility to act on behalf of a Department or the State must be guided by enabling legislation.

The Minister of State, Deputy Kehoe, claimed that these proposals would have a grave impact on local authority funding. Many Deputies have alluded to the problems that exist in regard to the rates system as we know it. We all accept it is archaic, suited to a different era and must be overhauled radically and completely, being cognisant, as Deputy Brendan Griffin said, of the role the current system has played in damaging the vibrancy of towns and villages throughout the country. It goes without saying that all of this must be addressed. Local government revenues have been destroyed in recent times in large part as a consequence of the lack of income coming into local authorities by way of rates. The system must be overhauled in such a way that less will give us more, and my party and I have made recommendations to the relevant Departments in this regard.

Again, the Government must take responsibility to address this issue or not address it. If it does not want to do so, it should be honest about it. However, members of this Government made certain commitments in this regard and in respect of upward-only rent reviews when they were in opposition and in the mouth of the last election. The Taoiseach told us this week that, unfortunately, the legal advice precludes him from carrying out those duties. I ask again what legal advice was available to him before the election that is not available to him after it? Has the advice changed? The bottom line is that rates will have to be altered to take account of turnover and, by extension, profitability. They will have to be better aligned to commercial reality and commercial rents than they currently are.

The Minister of State, Deputy Kehoe, also referred to the remaining part of the facilities, premises and services offered by clubs and the potential for exemptions being put under threat where a section of a premises is exempt. I cannot comprehend the point he is trying to make here. If the issue is addressed in the first part of the Bill, it is automatically catered for in the latter part. Again, we are back to the point that where there is a will there is a way.

Several Deputies referred to the competition element and the impact on licensed premises in towns, villages and rural areas. Nobody knows better than I do the difficulties that exist for the licensed trade. I was reared in a pub and was glad to have the opportunities I had by virtue of the income that derived from it. What we are proposing can be done while insulating local pubs from any impact on their trade. It is not about poaching business; it is about freeing up local sports clubs. There is a separate and more serious issue in regard to the pub trade. If Government Deputies wish to address that issue in the way it should be done, they must examine the problems with the licensing laws and the below-cost selling taking place in multiples throughout the country which is leading to a spate of binge drinking and the social problems deriving from it. The Government must examine the issue of the controlled and managed environment in which alcohol can be consumed in a licensed premises. It must separate the revenue it is deriving from liquor sales from its social obligation to prevent the abuse of alcohol in our society from running out of control, which it is doing in many instances.

Deputy Durkan and others expressed concerns about the impact of what is proposed on that trade. If he and others are serious about helping or assisting that trade, they are the issues they need to address. As regards clubs and sporting organisations which have licensed premises attached to their facilities, it is mainly in large urban centres and mainly over the past 20 years that these have sprung up but the legislation on the registration of clubs was enacted in 1904. It was never envisaged that those same clubs could be as vibrant and as important, from a commercial perspective, in providing the services and the facilities to their communities which are needed. That is the point and to hide behind that Act is an abdication of responsibility.

Deputies from Meath, Kildare, areas surrounding Dublin, Cork and elsewhere talked of support for the thrust of this legislation. If they really support the thrust of it, they need to insist on the Government possessing a will to change. I take with a pinch of salt the cheap jibes about the legislation in 2001 and the failure of the previous governments. I do not carry a candle for previous governments, ten, 15 or 30 years ago. I do not carry a candle for those who had the wherewithal to bring in a 1904 Act. We all have a responsibility to be cognisant of the changing situation in our communities.

As I said in my initial statement, I would ask that this Bill is not put on the shelf, that is it brought to committee and that the Minister with responsibility in this area engages with his officials with a will to amend the existing Act to accommodate the thrust of this proposal.

Question put and agreed to.

12:50 pm

Photo of Frank FeighanFrank Feighan (Roscommon-South Leitrim, Fine Gael)
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As this is a Private Members' Bill, it must, under Standing Orders 82A and 118, be referred to a select or special committee. The relevant committee is the Select sub-Committee on Public Expenditure and Reform.