John Paul Phelan (Fine Gael)

I welcome the Minister's presence in the Chamber for this debate. I wish to make a few points and will be as brief as possible. I refer to Senator Boyle's comments in respect of the current motor taxation system and its grossly inequitable nature. However, on foot of the Minister's proposals, there will be two motor taxation systems. While an argument could be made that the new system must be phased in over time, we are not getting rid of our grossly inequitable system but are making an attempt to phase it out. However, it will remain with us for a number of years to come. Senator Boyle also stated that Ireland has a high ownership rate of cars. However, compared with our international neighbours, we do not have a particularly high rate. Irish car ownership levels are approximately average when compared with our European counterparts.

I wish to make some points that have not been made earlier. Previous speakers have noted that the transport sector contributes 21% to our CO2 emissions. This is a highly significant amount, which has been growing rapidly in the past 15 years. A total of 97% of such transport emissions emanate from road transport and serious measures must be taken to tackle this issue. While I do not believe the introduction of the proposed new motor tax system will be the be all and end all in this regard, it is a step in the right direction. I agree that taxing cars based on their CO2 emissions constitutes a progressive step and I support it.

However, I refer to the point made by previous speakers regarding the widespread lack of alternatives to car use. In rural Ireland, such as the part of County Kilkenny in which I live, those who wish to work or go to school, college or a hurling match depend on cars. During the Celtic tiger years, the Government placed insufficient emphasis on trying to provide realistic alternatives to car use nationwide. I read the programme for Government and did not find a reference in it to rail freight. Perhaps the Minister can enlighten me otherwise.

As someone who, by the nature of my job, spends much time in cars, as do all politicians, a particular bugbear of mine concerns the juggernauts one encounters on the roads. They do untold damage to the road structure and block up and clog the country's arteries. However, this new Government, which has been in office for nearly a year, does not appear to have placed an emphasis on the importance of the significant role that rail freight could play in reducing the volume of freight transport on our road network. There has been an explosion in this regard in the past ten years and it has become uneconomic for many businesses to use the rail transport option. Were the Government serious about identifying an area in which some progress could be made, the issue of rail freight would appear obvious to me.

I urge the Minister, during his term of office, to make a serious attempt in this regard despite its apparent absence from the programme of Government. Approximately €60 million will be spent on carbon credits next year and the realisation has dawned on everyone that we must reduce our carbon emissions, regardless of their source.

I agree with previous speakers that the 9.5% increase in motor tax on engines smaller than 2.5 litres is not the most progressive of steps. People who make a genuine effort to purchase cars with smaller engines should be looked after in terms of the motor tax they pay. By all means increase the tax on people who drive gas guzzlers. I have no problem with retrospection in respect of those who drive 3 litre vehicles.

The Minister should have agreed to the request made by Opposition Members in the other House to backdate these measures to 2004, especially given the availability of records from that time. I understand an amendment was proposed which sought to backdate the measures to an earlier date.

Previous speakers have spoken about the anomaly with regard to the purchase in Britain and elsewhere of second-hand vehicles. Under the new regime, a car bought five years ago in Ireland will fall under a different motor tax system to one of a similar age bought second-hand in Northern Ireland. That is neither fair nor equitable.

This legislation seems to encourage people to purchase new cars. I do not know the carbon footprint of building a car but it seems to me that car production requires considerable amounts of energy. Rather than encouraging people to purchase new cars, perhaps we should ask them to re-use existing vehicles. That idea seems to have got lost in the debate but I may be wrong in terms of the carbon dioxide emissions from building cars. The Minister might enlighten me in that regard.

I welcome in principle that motor taxation will be based on the emissions made by a car. While that is a progressive step, it is a step in the wrong direction, however, to penalise those who drive cars with smaller engines rather than reward them for making a special effort to purchase vehicles which are friendlier towards the environment.