Eugene Regan (Fine Gael)

This issue is raised in the context of the general economy. It is the issue of the fixing of development levies that apply to residential developments and businesses. Sections 48 and 49 of the Planning and Development Act 2000, which commenced on 11 March 2002, provide for general, special and supplementary development contributions. These levies, which are chargeable by local authorities, were introduced during the Celtic tiger years. In a sense they were introduced at the height of the economic property bubble. Now that there is a significant reduction in property prices, the question arises as to whether the levels of these levies are now sustainable.

In Dún Laoghaire-Rathdown the contributions are €14,933.94 per unit of residential class development and €129.87 per sq. m. for industrial and commercial developments. This has evolved. Local authorities have discretion in the fixing of these levies and their usage. They draw up a development contribution scheme. Without question these levies have transformed the finances of local authorities. The manner in which these levies are used to fund community developments, parks developments, road infrastructure and water drainage infrastructure has been vital.

There is a more general issue that we need to face, which is the sustainability of the costs in the economy. The recent report of the National Competitiveness Council makes it clear that it is Government controlled prices. It can be rates, development levies and utility costs such as gas and electricity that contribute significantly not only to inflation but also to a level of cost in the economy, which has destroyed our competitiveness and, unless arrested, prevents us getting back to once again being a competitive economy. The other example is increasing our VAT rates while other countries are reducing theirs.

There is a general issue of local authority funding. The evolution of the development levies to an unsustainable level at present needs to be reviewed by the Government if we are to provide any stimulus to the economy and the construction sector. We need to restore competitiveness, which must start with the Government taking responsibility for those charges that are within its competence to determine. The purpose of my motion is to request an examination of the framework provided by the legislation and a review of the level of development levies. I want to establish whether the Minister believes they are sustainable. We need to start the process of restoring competitiveness and this is an area in which the Government can make a contribution.