Martin Brady (Fianna Fail)

I am delighted to have the opportunity to speak on the Motor Vehicle (Duties and Licences) Bill. I congratulate the Minister for the Environment, Heritage and Local Government, Deputy Gormley, on the initiative he took to change the VRT regulations for greener and more fuel efficient cars.

I always seem to agree with Senator Coffey and I agree with his point on the lack of public transport. I witnessed this yesterday when I saw two parents spend the whole day driving children to St. Patrick's Day celebrations and bringing them to football matches. It brought home the necessity of having a car in a rural area. There are no bus services from town to town.

I met another man and I will give Members a flavour of what people think. He told me that people are shagged altogether, so to speak, because they cannot have a smoke in a pub, they cannot get a bus or a taxi and if they get a hackney to go five miles they have to go 25 miles and are brought all over the world. They have no option but to walk everywhere. It is a fair point.

We must be conscious not to penalise motorists for playing their part in society in respect of climate change. Motorists feel they are penalised. We should justly reward them because a car is a necessity in many parts of the country, not a luxury. In cities such as Dublin, Limerick and Cork one can get a taxi in five minutes or a bus every ten minutes. We must be conscious that this is a different ball game.

The Minister's initiative will, over time, bring about a considerable change in the public attitude toward energy efficient motoring and will have an impact on a much larger scale. The Minister's intention is to influence the future buying habits of Irish motorists. All cars registered after 1 July will be taxed under the new regime. As Senator Coffey mentioned, an individual who bought a fuel efficient car before now or who buys one between now and 1 July will still be taxed under the old system. Effectively, we will penalise those who cared for the environment before the Government decided to reward people for it, a point adequately made.

In contrast, I received information from the Society of the Irish Motor Industry, SIMI, that someone who imports a used car from England and registers it after 1 July will be taxed under the new system. This means that the same make, model and year of car will be taxed at two separate rates depending on whether it was originally bought in Ireland or imported from England and registered in Ireland after 1 July 2008. For example, an individual who purchased a new Volkswagen Golf diesel car in Ireland in 2006 will pay annual road tax of €560. However, someone who imports the same car from England after 1 July will pay only €150 per annum.

Unfortunately, the people who will be penalised under this anomaly will be those Irish motorists who cared enough for the environment to buy a lower emissions car before the introduction of this new standard. Regarding the measurements of emissions, with which I am not very familiar, are we dependent on information given to us by motor manufacturers or do we have a way of measuring emissions ourselves? The understanding from the industry is that not all the measurements are accurate as there are different ways of testing emission levels. This is an area that could be examined.

While I recognise the intentions behind the Minister's proposals and commend him on taking this initiative, I hope he will consider the impact this anomaly will have on both environmentally responsible motorists and on the motor industry. The most efficient way to overcome this anomaly would be to allow cars to be taxed at the new environmental rates on renewal provided these rates are lower than the current rates and that the CO2 data were recorded by the State at the time of registration. A recent study undertaken on behalf of the SIMI has shown the cost of making this change would come to €26.8 million. However, the study also showed that a decline of 1.5% in new car sales this year as a result of this anomaly could cost the Exchequer €27.8 million in lost VRT and VAT. These figures show the cost of implementing this proposal. We must rectify the loophole.

The Minister has proposed a 9.5% increase for cars below 2.3 litre engine size and 11% for cars with an average size above this threshold. When communities see the benefit of the revenue generated by the local government fund, most reasonable people will understand it is worth paying the extra money. Recently, the Minister for Transport announced the regional and local roads programme for 2008, setting out an overall expenditure of €618 million. Funding for this will come from the local government fund. Motor tax proceeds in 2008 are anticipated to be €1.08 billion, a significant figure which will directly finance improvements to local government services and investment in roads.

There has been some criticism of the Minister's decision to apply the new motor taxation system to new and pre-owned imported cars registered on 1 July 2008 linking VRT to CO2 emissions from that date and the potential impact on motor vehicle sales in 2008. We may well see a reduction in sales in the first half of the year compared with last year, but it is to be hoped that the second half of the year will compensate for this. There is a fear that some people will hold off on buying a new car until 2009, but when a fundamental change such as this is introduced, some anomalies will always be created which will be washed out through the system over a period.

The important thing is that we subscribe to the principle of what the Minister, Deputy Gormley, is seeking to achieve, namely, that as a country we play a leading role in tackling climate change, especially by linking motor taxation and VRT to carbon emissions rather than engine size. From 1 July motor tax for the most efficient new cars registered will start at €100, while under the current system the lowest motor tax rate is €165. There is a direct incentive for people who want to act responsibly and play their parts in tackling climate change. By buying a vehicle that is carbon efficient, people will earn a direct financial benefit.

I also welcome the new labelling system being introduced from 1 July. It is particularly important that consumer-friendly information is available and is presented in a uniform and consistent manner to enable people to make conscious and informed decisions on the implications of this Bill for their buying patterns.

I refer to a number of side issues that have come to my notice. I have come across many used cars lying dormant from two years to ten years. I see them in driveways. People ask the owners about them and the owners pay approximately €150 to have the cars taken away. These cars are sold again and there seems to be no proper tracking system. An example I raised previously is that of the Malahide Road on which I live and where it is advertised blatantly on exclusive signage that one can buy a used car for €49.95. This is from where the used cars come. We must examine this matter closely.

Parents buy small motorcycles for young children who drive them up and down footpaths. It is only a matter of time before someone is killed, as the motorcycles can do up to 30 mph. The situation with quad-bikes or quads is the same. When I was travelling through the country yesterday, I saw quads being driven on roads where there were no crash barriers or safety barriers and where there was a serious crash recently. It is only a matter of time before the situation gets out of hand because parents are buying quads as presents for children. The quads do not need tax or insurance. When I inquired of the Garda, it was unsure as to whether anything was required. Children of ten or 12 years of age can get up on the quads and do 40 mph.