Wednesday, 4 March 2015
Ceisteanna - Questions - Priority Questions
2. To ask the Minister for Environment, Community and Local Government the amount collected through local property tax in 2014; the amount that was placed in the local government fund under his Department; and the amount provided to local authorities, or to other public bodies and agencies. [9326/15]
My question relates to the amount collected in local property tax, the amount of it which went into the local government fund, where it is supposed to be going, and the amount which was provided to local authorities. This is a key issue for people. People were promised many times in this House and elsewhere by senior Ministers and Ministers of State that the money would be used to provide for footpaths, public lighting, libraries, and parks etc. The Minister might outline the figures for me.
The Minister for Finance, in the Exchequer Statement for 2014, reported that €491 million was collected in local property tax in 2014. Some €483.5 million from the local property tax was paid into the local government fund during 2014. A further €7.7 million was paid into the fund in January 2015. This related to the local property tax collected in the last week of 2014. The annual accounts of the local government fund for 2014 are in the process of being finalised and the Comptroller and Auditor General will commence the audit of these accounts this month. The accounts are prepared on an accruals basis and expenses are, therefore, matched with the related revenues and are reported when expenses occur and not when the cash is paid.
Estimated 2014 figures show the following payments from the local government fund for 2014: general purpose payments of €281 million; recoupment of local authority water services capital loans of €47. 4 million; payments in respect of group water schemes of €21. 7 million; local government innovation and reform payments of €6.6 million; payment to the Department of Transport, Tourism and Sport of €372.4 million; payment to the Exchequer of €520 million; subvention to Irish Water of €439.1 million; and miscellaneous payments of just more than €1.6 million.
I thank the Minister for his reply. The figures he has given outline the problem with the local property tax. It is not what people thought it was and what it was for. The Minister has outlined that €281 million was disbursed from the local government fund in respect of general purpose payments while a further €359 million was also disbursed from the fund. As we all know, the fund is made up motor tax, direct Exchequer funding from other sources and the local property tax. In 2014, the fund totalled €1.626 billion. For that year some €281 million was disbursed from the fund in respect of general purpose payments while miscellaneous provisions amounting to €47 million, €21 million and another €6 million, totalling €74 million, were also disbursed from the fund. This means that approximately €350 million was disbursed from the fund. However, this shows a huge discrepancy, not just in respect of the local property tax money, which shows there is €100 million which did not go into the fund. It also shows that more than €1 billion from the fund was disbursed in other ways.
This is the issue. We were told in the mid-1990s that the local government fund would be made up of the road tax. The road tax was increased and we now pay higher road tax than our neighbouring states. It is much higher here than in the North, which the Government often references. We do not have any control over this as the tax in the North is set by the British Government.
If the Minister has any influence on this and other taxation measures, I would like to hear from him on it. We know the Government supported the Tory cuts last year because it wanted us to implement them in the North.
There is no intention to misrepresent the payments of the local government fund. The fund has made a payment back to the Exchequer for a number of years. The details are published in the Estimates each year. Local property tax for 2014 is €491 million. As I have previously stated, it is unaudited and the process of auditing will now proceed. The estimated figure for 2015 is €440 million.
I need to nail a myth here. Every cent of the local property tax goes to local authorities. Some 80% of it is retained locally. The remaining 20% is used in an equalisation scheme to ensure that local authorities do not go below the level of the previous year. I am sure the Deputy, coming from one of the smaller counties, in the midlands, will respect the fact that it is necessary to have such an equalisation fund and to manage the property tax in this way to ensure counties, with their various different issues, are dealt with in a fair way.
A sum of €491 million came in through the local property tax and €282 million made its way to the general purpose payment. Some €359 million made its way from the overall local government fund, which in the current year is more than €1.839 billion. This shows that a large part of it is not being disbursed. There is a further €520 million payment in the current year made to the general Exchequer. This leaves a lot of room for manoeuvre. Some €93 million is provided for under the miscellaneous heading. The provision for direct subvention to Irish Water, the bit that is actually named, is €439 million. This shows that people are not getting what they were told they would get. The Minister and Commissioner Phil Hogan told us in this Chamber that Irish Water was going to be a stand-alone commercial semi-State company. For how long will we shore it up? Some €59 million in rates is being carried. The Government speaks about keeping money off the balance sheet. It moved €500 million in one section of the Bill enacted just before Christmas back onto the balance sheet from Irish Water. This is €500 million that is owed to the housing finance agencies.
This clearly shows is that there is no clear accountability. The funding is not directly linked. A smoke and mirrors job is going on here with funding being moved around and not ending up where it was intended.
We are satisfied that there is transparency here in regard to 2014.
The local property tax, LPT, was paid into the local government fund along with motor tax receipts, which was always done. A total of €281 million went directly to local authorities; €260 million was paid to the Department of Transport, Tourism and Sport for essential non-national roads; €12.5 million went to the Department of Transport, Tourism and Sport for the vehicle and computer services division for the operation of that essential service; and €439 million was paid to Irish Water, which is consistent with the way in which it was done previously. A total of €520 million was paid to the Exchequer.
Let me restate that 100% of all local property tax will be retained by local authorities in 2015. That is an absolute fact. If Deputy Stanley disagrees with the manner in which it is being done he can make alternative proposals, but I would like to see him stand over a situation where he disagrees with an equalisation fund that helps weaker local authorities and weaker areas of the country to maintain what they had in the previous year.